Asset or Liability: Portfolio Strategy for Your Life

I have been on a Howard Marks kick these last few months. The legendary investor and founder of Oaktree Capital he has documented his intellectual journey through decades of writing. His letters are a must for any investor. 

So why should everyone read his letters? Well, at the end of the day we are all investors. Some of us invest our money. All of us invest our time and energy, all in hopes of some return at some period of time. We invest in our hobbies, our health, our relationships, our family, our education, our reputations and our career. For me, it’s an interesting way to think about your life. A valuable framework. 

If you use a portfolio strategy, when looking at your life there are questions you need to ask and honestly answer here:  

Are we investing in the long term or short term? 

Are you presently holding assets or liabilities? 

This is especially relevant not just in investments. The truth is most of your relationships are probably liabilities, not assets. This is why you have to really curate your circle and find the location of a maximum number of high ambition, smart & competent people. You also really need to be careful of what you read and listen to aka your media diet. 

Most people listen to mainstream media and it’s why they are NGMI. If you listen to and read what everyone else is, you will do whatever one else is doing. The crowd is usually wrong or at least always too late. 

The unfiltered reality when I reflect on my life so far, is that I’ve over-invested into my career & underinvested in my health, family and true friendships. I wasted too much time on limited upside opportunities and tolerating incompetent and bad people.

So basically on my “life balance sheet”, I find I have far too many liabilities. Something I’ve spent a considerable time this year trimming & fixing. Just like selling off money-losing stocks in your portfolio, you should do the same for energy sucking relationships or time wasting situations. Time is of the essence and none of us are getting any younger.