By 2009 it had dropped roughly 50% at its worst. Then it slowly started climbing. All the while, many investors were still expecting the worst.

I graduated in 2010 and it truly was one of the worst job markets you can imagine. The global economy was contracting, companies were shedding workers, and no new hiring was happening. Things were so bad that I couldn’t get a job I wanted, so I started a business with my dad.

I was so negative on the economy that I also sold the stocks that I had bought in 2007, right before the collapse.

I was convinced the worst was yet to come. We entered 2011 with that same kind of dread. In April that year, the market slid about 19% through September.

I was out of the market, so I felt good and thought, here we go again! But instead, we started rising. Slowly at first. Then faster. I stayed out of the market until 2015.

The Market Never Does What You Expect

Here’s one big lesson. It often costs you more not being invested than being wrong about timing.

Between September 2011, when the S&P 500 was around 1,173, and September 2015, when it hit about 1,961, the market gained almost 70% over four years. 

This year has had its own wild ride:

• In April 2025, markets tumbled. Tariffs, trade war talk, recession fears—all piled on. The S&P 500 dropped roughly 20% from its earlier record highs. 
• Then something shifted. Portions of tariffs were paused. Inflation data came in cooler. The market clawed its way back. By May 2025, the S&P had erased its losses for the year. It went from deep red to green. 
• As of September 15, the S&P500 is up 12% year to date.

So people who bailed in April thinking things were only going to get worse missed out.

I got a text from a friend in April: “It’s bad.” My reply was something like, “Might get worse. But that’s more reason to buy more.” Did I expect the market to recover so fast?

No. To be honest, I was in the recession camp. But sometimes you see opportunity in panic.

Emotions, Hormones, & Market Behavior

I’m currently reading The Hour Between Dog and Wolf: How Risk-Taking Transforms Us, Body and Mind by John Coates. He lays out some of the hormonal mechanics behind market behavior:

“The research I encountered on steroid hormones thus suggested to me the following hypothesis: testosterone, as predicted by the winner effect, is likely to rise in a bull market, increase risk-taking, and exaggerate the rally, morphing it into a bubble. Cortisol, on the other hand, is likely to rise in a bear market, make traders dramatically and perhaps irrationally risk-averse, and exaggerate the sell-off, morphing it into a crash.”

We’re seeing both now. The fear from April, the anxiety, but also rising enthusiasm, especially around AI, and most importantly, rising earnings.

Are we in a bubble? Possibly. But as long as companies keep growing their earnings, investors will keep buying stocks.

There is a lot of excitement. But this isn’t new. These cycles of greed and fear have been happening for a long time.

My Psychology This Year

I’ve noticed my own stance shifting, partly because of my life situation. Buying a house with my wife. Baby on the way. So I’m more cautious/bearish on the economy than I might otherwise have been. I’m leaning more towards protecting capital than aggressively trying to compound it.

Compare that to a year ago, when I was more aggressive with my trading account. Now I’m more cautious, staying away from margin, but also more aware of what I can lose, but also what I can miss.

Here’s what I think matters, especially in times like this:

1. Don’t try to time the market. Missing recoveries often hurts more than riding out drops.
2. Stay invested if your time horizon allows. The long-game tends to work out better than trying to guess highs and lows.
3. Manage risk wisely. Don’t bet more than you’re comfortable losing. Position sizes, diversification, quality companies matter.
4. Lean into opportunities in dips. When markets fall 10-20%, I personally feel more comfortable deploying capital. Because those drops often precede strong recoveries.
5. Know your emotions. Fear, greed, cortisol, testosterone—all of it influences decisions. Recognizing when you’re being driven by fear or euphoria helps you make better choices.

And there’s one very important thing to remember. The legendary trader, Jesse Livermore, once said:

“A body in motion tends to stay in motion until a force or obstacle stops or changes that motion.”

When stocks are climbing, they often keep climbing—longer and faster than most expect—until something truly significant knocks them off course.

The mistake many investors make is assuming every dip or scary headline is that “force” that will stop the trend. More often than not, it isn’t.

Momentum can carry prices far past what feels rational. The smarter move is to respect that momentum, manage your risk, and wait for genuine shifts in fundamentals before betting against a trend.

Being Wrong Versus Being Late

The market may be making new highs now, but that doesn’t mean things are free of risk. Inflation, tariffs, recession fears, all of that’s real.

On the other hand, past behavior shows that markets tend to climb from fear and uncertainty.

I’m staying invested and staying disciplined. Be contrarian when logic supports it, but don’t fight the trend for its own sake.

Because the biggest losses often come not from being wrong, but from being late.

The post What’s Going On With the Stock Market? appeared first on Darius Foroux.

“No one can become rich merely by saving. Mere saving is closely akin to the socialist policy of dividing and, likewise, runs up against the same objection that there’s not enough around to save.” 

I always thought that saving money was the way to riches. The platitudes about saving can be found everywhere in society. 

Pay yourself first. Build a little nest egg. Save for a rainy day. A penny saved is a penny earned. Money doesn’t grow on trees.

All these sayings tell you that you should be saving and avoid taking risks. After all, you don’t have a money tree, and you never know what will happen in the future.

If you’re not investing, you’re missing out

No matter how hard you save, you’re always limited by your earnings. While it sounds nice in theory to earn more, it’s not so easy.

This is what Raskob meant when he said you can’t get rich by merely saving.

I agree with that 100%.

If you save diligently for 40 years, you will end up with a lot of money. But you were never really rich. 

Being rich means that you have way more money than you actually need. It means an abundance of money.

To become rich, you must have investments.

As you go through life, your investments grow with you, and so is your net worth.

You’ve got to experience the power of capital gains

My net worth has doubled during the past two years. Is it because I sold more books or made more money with writing? No. 

In fact, my income from writing has been pretty much the same over the past four years.

If I relied on saving my money, I would not have a 7-figure net worth. More than half of my worth comes from capital gains on my stock and real estate portfolio.

Before I experienced these types of gains, I knew that investing was the way to riches, but I never really felt it until a few years ago. 

And as the years go by, I feel it more and more. This is something I hope you will experience, too.

When your investments do well, you no longer feel the pressure to do work so that you can make money. 

You can move freely and think about how you can actually make a contribution.

So invest more! Your future self will thank you for it.

The post You Can’t Get Rich by Saving Money appeared first on Darius Foroux.

The core idea of Stoicism is simple: Focus on what you control and ignore everything else. But as investors, we tend to focus on the latter, which harms our future returns.

If you always focus on the factors you don’t control, like the state of the economy, inflation, or what the Fed does next, you will lose money. No one can predict macro factors or what the stock market does in the short term.

As investors, we should focus on what we control, and that’s a very limited area. Essentially, we only control our own decisions about what to invest in.

So, what would a Stoic invest in? Quality. As Seneca, one of the most famous Stoic philosophers, once said:

“It is quality rather than quantity that matters.”

Seneca, a very wealthy person in his own time, stressed that a life well-lived, even if short, is far superior to a long life spent poorly. This wisdom can be directly applied to investing.

Instead of spreading our investments thin across numerous mediocre opportunities, a Stoic investor would focus on fewer, high-quality investments. This means thoroughly researching and selecting companies with strong fundamentals, ethical practices, and sustainable growth potential.

This is also in line with Warren Buffett’s strategy. Buffett, who has demonstrated Stoic tendencies throughout his lifetime, illustrated this with an analogy involving LeBron James, one of the greatest basketball players of all time. He said:

“If you have LeBron James on your team, don’t take him out of the game just to make room for someone else. … It’s crazy to put money into your 20th choice rather than your first choice.”

This means that if you have a good investment strategy, stick with it rather than diversifying just for the sake of diversification.

How to construct a Stoic stock portfolio

Investing in an S&P 500 index fund should always follow the basis of every Stoic investor. After all, the index as a whole is the LeBron James option of investing.

A Stoic investor keeps an emergency fund of 6 months’ worth of expenses in their savings account. But other than that, a Stoic will invest 100% of their capital in an S&P 500 ETF to keep investing simple.

A Stoic invests in the best and ignores the rest.

The S&P 500 has historically outperformed other asset classes over the long term. Here’s a comparison of the average annual returns for different asset classes over the past several decades:

The outperformance of the S&P 500 makes it a solid foundation for every person’s portfolio. As a Stoic investor, simply invest a set amount of money in the S&P 500 every month. When you make investing a habit, you take your emotions out of the game.

If you have an appetite for picking stocks, you could invest in quality stocks with what I call the 90/10 rule. That means you invest 90% in the S&P 500 and 10% in a handful of individual stocks. This ratio can also be 85/15 or 80/20 if you’re a more seasoned investor, but I would never push it beyond 80/20. Otherwise, you risk becoming a stock picker.

For example, my current portfolio looks like this:

• 85% in S&P 500 (VOO)
• 8% in Adyen (ADYEN.AS)
• 7% in Tesla (TSLA)

I started buying Tesla stock in April 2024 because I wanted to have additional exposure to the stock. My view was that it was undervalued. I averaged into the position at $163. I talk about why I started investing in $TSLA in this video:

While my other picks are not part of the S&P 500, Tesla is, but has underperformed the market for the past two years.

I’m bullish on Tesla because it is not only the best EV maker in the world but also one of the largest AI companies. If that’s not enough, it is also building the most practical robot, Optimus, and wants to take on Uber with its self-driving taxis.

Adyen has one of the simplest and most solid business models in tech: Payment processing for large corporations. Their product is safe, margins are great, and their customer base has a huge hurdle to switch to competitors.

As a Stoic investor, your goal is to set yourself up to win financially and in life. You can accomplish that in the best way possible by dedicating the majority of your portfolio to the best-performing asset class. The rest is outside of your control.

How to pick quality stocks like a Stoic

Investing like a Stoic means being a contrarian. While most people pursued pleasure and fun, the Stoics focused on improving themselves. As Epictetus once said, you will always receive criticism when you choose to do hard things:

“If you want to improve, be content to be thought foolish and stupid.”

This is also true in the market. If you want to beat the market, you have to go against the herd. When everyone is selling a great stock, and you decide to buy it, you must be okay with looking foolish as long as it keeps going down.

As a Stoic investor who’s trying to find quality companies, you value traditional measures like strong balance sheets, high-profit margins, and moats. But there’s one other factor that I value highly as a Stoic, which is institutional ownership.

If a company’s stock has less than 50% institutional ownership (including strategic entities), I always pass. It means there are too many individual investors involved.

As a Stoic, you should always be cautious of stocks and assets that are primarily driven by retail investors. While institutional investors are not perfect, they often have a long-term strategy. They invest in large and proven companies.

That’s where you also want to be as a Stoic investor—not in the unproven and small companies. Sure, those smaller companies have the largest potential for going to the moon, but they also have the largest potential of going to zero.

By looking at institutional ownership, you instantly filter out a large portion of stocks. From that point, it’s a matter of considering industries and companies that you are passionate about and also know a great deal about.

As you go about investing, always remember what Marcus Aurelius said:

“You have power over your mind – not outside events.”

When you understand this, you will find greater investing success.

The post Invest Like a Stoic: Focus on the Best and Ignore the Rest appeared first on Darius Foroux.

Being a Stoic makes you better at money, wealth-building, and investing. Stoic Investing strategies teach us to manage our emotions and focus only on things within our control (and let go of those that we cannot).

As the ancient Stoic philosopher Seneca urged:

“You live as if you were destined to live forever, no thought of your frailty ever enters your head, of how much time has already gone by you take no heed. You squander time as if you drew from a full and abundant supply, though all the while that day which you bestow on some person or thing is perhaps your last.”

Stoics acknowledge that time – unlike money – is finite. That’s why a lot of Stoic investing strategies rely on living in the present moment and making time your ally.

How do you apply Stoicism to investing?

Stoicism is about thinking long-term rather than short-term. When applied to investing, it means investing your money now so you won’t have to work as hard in the future.

In the practical sense, Stoic Investing can mean doing the following:

1. Invest to build long-term wealth, not to make major purchases — Many people invest with the goal to make a lot of money so they can buy a bigger house, a new car, or to travel more. As a Stoic investor, you shouldn’t look at investing like that. Simply see investing as a way to compound your money so you can buy freedom, not things.
2. Only speculate with money you can afford to lose — If you do want to trade stocks for short-term profits, protect the downside. Only make riskier bets with the  money you can afford to lose.
3. Stay invested even during market downturns — The stock market goes up and down unpredictably. Your job is to invest during it all.
4. Invest consistently — The key is to invest a certain percentage of your income every month (10% is a great start). As you earn more, you will also invest more. 

What did the ancient Stoics say about money?

We have the “big four” ancient philosophers of Stoicism: Epictetus, Marcus Aurelius, Seneca, and Musonius Rufus. You can learn more about them in my book, The Stoic Path to Wealth.

All four of these philosophers emphasized the importance of living a simple, frugal life and not being overly attached to material possessions.

Epictetus said it well:

“Wealth consists not in having great possessions, but in having few wants.”

However, it is NOT true that the ancient Stoics were averse to money. Instead, they underlined the importance of non-attachment. As Seneca said:

“For the wise man does not consider himself unworthy of any gifts from Fortune’s hands: he does not love wealth but he would rather have it; he does not admit into his heart but into his home; and what wealth is his he does not reject but keeps, wishing it to supply greater scope for him to practice his virtue.”

It takes money to be free, but chasing wealth shouldn’t consume us. The key is finding a balance between financial stability for ourselves and our loved ones, and understanding that true happiness isn’t found in material possessions alone.

As Marcus Aurelius said:

“Greatness lies not in wealth and station, as the vulgar believe, not yet in his intellectual capacity, which is often associated with the meanest moral character… True greatness lies in the consciousness of an honest purpose in life, founded on a just estimate of himself and everything else, on frequent self-examination, and a steady obedience to the rule which he knows to be right.”

Finally, Musonius Rufus reminds us that we shouldn’t be overly focused on our journey to building wealth. Our life and career ambitions can sometimes push us towards the pursuit of money. And that’s okay as long as we remember to not waste our most important asset, which is time. As Rufus said:

“It is not possible to live well today unless you treat it as your last day.”

The ancient Stoics argued that true wealth and contentment come from satisfaction with what one has, rather than always wanting more. The key lies in staying non-attached to material wealth or possessions.

The Stoic Triangle of Wealth

How can you set investment goals with a Stoic approach? I’ve found three strategies to build wealth while still living a fulfilling life.

• Focus on your true desires
• Compound your money
• Protect your capital

I call that the Stoic Triangle of Wealth. This idea allows us to live a life that’s both fulfilling and financially abundant.

Focus on your true desires

Here’s a thought experiment: What would you be doing on an “ideal day”?

Consider your ideal daily activities, from waking up to going to bed. For me, it’s writing, reading, running, cycling, and quality time with loved ones. Do fancy cars and lavish vacations appeal to me? Sure. But, I’m not going to invest significant energy and time chasing them.

Financial freedom means living days without being tied to a job you dislike. Because our desires fall into two categories: What society expects us to want and what we truly desire.

Many of our desires are influenced by external pressure. Some people purchase specific brands to impress, and so forth. Indulging in these isn’t inherently bad, but problems arise when we pursue a life valued by others over what we genuinely want.

Compound your earnings

Building wealth like a Stoic means prioritizing peace of mind. Our time is limited, and we can’t rely on a high-paying job indefinitely. Therefore, finding ways to build wealth outside of work is crucial. Warren Buffett said it best:

“If you don’t find a way to make money while you sleep, you will work until you die.”

Also, everyone needs an emergency fund. If you haven’t started, aim to save a month’s expenses in a savings account, then work up to three, six, and perhaps even a year’s worth. I believe six months is sufficient.

By saving and investing regularly, you’re on the path to financial freedom.

Protect your capital

The famous stock trader, Paul Tudor Jones, said:

“The secret to making money is playing defense. You must protect your capital and resist the urge to make wild bets that have a low probability of success.”

Many investors chase high-risk, high-yield investments without grasping the need to protect their capital. To avoid this, educate yourself on investing basics to safeguard your assets. It’s wiser to gradually build wealth while protecting your money than to risk it all for a get-rich-quick scheme that might cost you your life savings.

5 Stoic Investing Principles

To better understand Stoic investing, we can look at the following key principles.

1. Focus on the things you can control

In investing, you can’t control everything, like market swings or the economy. Stoic investing tells you to concentrate on what you can control, like your investment plan, how you spread out your assets, and how you manage risk. By focusing on what you can change, you’ll make smarter choices and reduce stress.

2. Manage your emotions

Stoicism teaches the value of staying emotionally strong and not getting too caught up in external events. This approach involves not panicking and selling off investments during market dips or getting swept up in investment fads because of the fear of missing out (FOMO) or the Fear of Better Options (FOBO). Investors who follow Stoicism strive to keep a cool head and make decisions based on long-term goals, not on fleeting emotions.

3. Remain consistent and fearless

Again, Stoicism is about accepting what we can’t control. Stoic investors know that to succeed, you need to be consistent and focus on long-term goals. Adopting a Stoic mindset means staying strong during market ups and downs. This leads us to:

4. View market volatility as an opportunity

Stoic investing is all about accepting that markets will always go up and down. Instead of worrying about drops in the market, Stoic investors see them as chances to buy assets cheaply. They know that these ups and downs are just short-term and that over time, the market trend will eventually keep going up.

5. Focus on the real value of a business

Stoic investors prefer companies they understand and that show real profit and value. They don’t invest in something purely out of hype. When you focus on real value, you make investment choices with an eye on the long-term rather than short-term profit. It’s all about knowing the true worth of an investment and making well-informed decisions.

Living well is the opposite of mindless consumerism

Some time ago, I sold a car I was fond of because I was planning to move abroad. I wondered, why keep the car? Letting go wasn’t easy, but when I handed over the keys, I realized that the car was never truly mine. It reminded me that you can’t lose what you never owned.

The truth is, we don’t really own anything. We’re just passing through, and the things we buy and call “ours” aren’t truly ours.

I’ve always loved the idea of a simple life. There’s something freeing about owning less. It feels liberating not to be burdened by too many possessions.

The real essence of Stoic Investing is to be able to pursue what we truly want and ignore what we don’t. It’s about investing in the things, people, and experiences that actually matter to us.

Order The Stoic Path to Wealth

My new book, The Stoic Path to Wealth (Portfolio / Penguin), is out now.

Learn more here: stoicpathtowealth.com

The post What is Stoic Investing? (And how Stoicism can make you wealthy) appeared first on Darius Foroux.

Does the number really matter? These are questions that often come to mind when discussing personal finance.

The truth is, that being rich and being wealthy are two different things. You can be rich without being wealthy, and vice versa.

Being rich usually refers to having a larger income or owning highly valuable assets. When you’re rich, you can afford a luxurious lifestyle.

Being wealthy goes beyond just having a high income. Wealth is a broader definition that includes not only financial resources but also intangible assets such as time, knowledge, and relationships.

Being wealthy means being abundant in the above-mentioned resources that you get to live a secure, sustainable, and free life.

“How much money does it take to be considered rich?”

This is where the “number question” comes in: How much should you be earning to be considered rich?

• The Internal Revenue Service (IRS) says that you need an annual income of at least $540,009 to be among the top 1% of earners in the United States.¹
• To qualify for the top 5%, you’ll need to earn a minimum of $335,891 per year.²
• The top 20% of earners need at least $130,545 per year if they live in the 100 largest U.S. cities.

But here’s the interesting thing: A recent interview from the Wall Street Journal found that many Americans who earn more or less $400,000 a year – even those who are living in single households (so they don’t have a family or kids to feed) – still don’t think of themselves as “rich” despite their income.³

That’s understandable.

Most likely, these $400K folks have a very different lifestyle compared to those earning an average annual income of a little over $76,000.⁴ So even if they’re earning more than four times the average income, they still don’t feel rich.

Factors that determine whether you’re rich or wealthy

The IRS may consider you a “rich” individual if you’re earning more or less $400,000.

But just because someone earns a lot doesn’t mean they’re wealthy. If they spend a lot or have a lot of debt, they might seem wealthy but actually have little to their name. That’s one factor that affects whether a person is rich or wealthy.

Meanwhile, wealth is often measured by net worth, which is the difference between what you own (assets) and what you owe (liabilities).

• Generally, if you have a liquid net worth of $1 million, you’re considered a high net worth (HNW) individual.⁵
• To be classified as very high net worth, you’d need between $5 million and $10 million. And if you have $30 million or more, you’re in the ultra-high net worth category.

These figures show how the financial industry views wealth.

But what about normal people? The average American believes that a net worth of $774,000 is enough for financial comfort, while $2.2 million is seen as wealthy.

I usually avoid relying on dictionary definitions, but in this case, I believe using it is the best way to accurately describe true wealth. One dictionary definition of wealth is:

“A plentiful supply of a particular desirable thing.”

That’s what the most profitable companies in the world do: They provide something that a lot of people are willing to pay good money for.

It’s best to look at the following factors to benchmark your finances. For each item, I also added a question you can use to guide yourself closer to financial independence and wealth.

Income sources of the rich vs wealthy

Do you have multiple income sources that can continue earning if one income source suddenly dries out? Is a single one of these income sources enough for you to live on?

For example, imagine being a restaurant business owner during the early days of the pandemic. A lot of restaurant businesses closed at the time because people couldn’t go out to eat for months. To avoid that, you’ll need a diversified portfolio of businesses you can rely on when another shuts down.

Real wealth is about lasting value and diversification. It doesn’t matter if your wealth is inherited or earned on your own; the key is to have investments and assets that generate income regardless of the economy, and for many years, across generations.

Assets

Do most of the things/assets you own appreciate in value over time?

If you’re rich, you might spend money on things like fancy cars or designer clothes. These items are expensive, but they don’t bring in money and might even lose value as time goes by.

Wealthy people, on the other hand, think about the future. They base their financial choices on their values and long-term goals. They understand the importance of aligning their decisions with their values to avoid negative consequences in the future.

Debt

Debt-to-Income (DTI) ratio stands for your monthly debt payments divided by your gross monthly income. It’s a method lenders often use to see how well you can handle monthly payments when you borrow money.

For example, if you have a total of $1,920 in monthly debt payments and earn $6,400 per month (for an annual salary of $76,800), your DTI ratio would be 30%. Your DTI ratio should ideally be below 36%, but many lenders prefer it to be even lower at around 28%.

Even if you’re in the top 1% of earners, you won’t build wealth if you have too much debt.

For those not even close to the 1% income level, the idea of overspending at such a rate might seem strange, but it happens a lot. High earners often max out their budgets on big houses, fancy cars, and extravagant trips. They might even rely on loans or credit cards to cover these expenses, leading to significant debt.

Truly wealthy individuals focus on paying off debt to keep their finances secure. When they do take on debt, it’s with the aim of boosting their future income, such as investing in real estate or a business.

Sustainability

How can you keep earning well while also finding time and energy for yourself and your loved ones, without getting burnt out?

High income often comes with a high price on people’s personal lives. We often hear about or see rich people who are miserable because they barely have time for themselves and their family/friends.

It’s no wonder that many high earners spend too much. It’s a coping mechanism for the high demands of their career. Meanwhile, wealthy individuals use a system that allows them to build wealth while living well. This enables wealthy folks to create wealth that lasts for generations.

More money won’t make you wealthy

To me, a wealthy person’s most defining trait is their freedom. This is what separates them from the rich folks.

When you’re free to do the things you truly want and only dedicate resources to things you truly care about – that’s when you become wealthy. Wealth is both a number and a mindset.

If you’re happy making $200,000 a year (which is enough to live a good life), bumping that up to $500,000 might not make a big difference to your happiness.

Additionally, the price you have to pay in terms of time and energy to double your income might even deteriorate your happiness. So that’s the real trade-off.

If you’re already doing well, should you be willing to sacrifice everything to get richer? In my book, the answer is no.

The post Rich or Wealthy: What’s the Difference? appeared first on Darius Foroux.