Trust the stock market’s long-term upward trend

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Over the past century, the stock market has been the most powerful wealth-building tool ever invented. Despite crashes, recessions, and world wars, the total market trend never stopped climbing. It’s a self-cleansing ecosystem: failing companies drop away, new ones rise, and millions of dedicated employees innovate every day.

Imagine the market as a garden of wildflowers in perpetual bloom. Some wilting patches give way to fresh blossoms. In ’87, in 2000, again in 2008, the soil pulled nutrients down, but resilience always returned. History shows that if you simply plant seeds each month in that garden and walk away, you end up with an ever-bigger field.

Academic studies confirm there is no reliable way to time these blooms. Instead of chasing the next big gain or fearing the next crash, setting up routine investments in a broad index fund and reinvesting dividends harnesses the natural cycle of decline and renewal. The science is simple: time in market beats timing the market.

You’ll pick a broad index fund, automate monthly contributions of a fixed amount, and reinvest dividends automatically. Then, silence daily market noise—no alerts, no obsessive tracking. Check in once a quarter and watch your garden of wealth grow. This disciplined, hands-off approach captures the long-term upward trend without panic selling. Start your first automatic buy tonight.

What You'll Achieve

You’ll internalize market volatility as normal and emotionally detach from daily swings, while your consistent contributions compound over decades into substantial wealth.

Invest for the long haul

1

Choose a total market index fund

Pick a broad fund like Vanguard’s VTSAX or S&P 500 equivalent. This gives you instant ownership of thousands of companies.

2

Set up recurring buys

Automate a monthly purchase—say $200 straight into your index fund. You’ll buy more shares on dips and fewer on peaks, smoothing out risk.

3

Ignore daily noise

Block financial news alerts for a year. Instead, once a quarter review your account. You’ll find a calmer approach leads to fewer rash decisions.

4

Reinvest dividends

Opt to reinvest all dividends automatically. This uses compounding to add more shares without extra effort, fueling growth even in flat markets.

Reflection Questions

  • How might weekly news of market drops affect your confidence if you let yourself watch?
  • What emotions arise when you think of committing to a long-term plan versus chasing quick wins?
  • How will automating purchases help you stick to your goals?
  • What will you eliminate—news alerts, browser tabs—to protect your peace of mind?
  • What vision do you hold for your portfolio in ten years if you stay the course?

Personalization Tips

  • A hobby photographer auto-buys shares monthly, finding the patience to ignore steep drops and rejoice at rebounds.
  • A teacher reroutes a small portion of her paycheck into an index fund, then forgets about it for a decade.
  • An engineer turns off brokerage alerts, avoiding panic selling during market panics to keep her long-term return intact.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life
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The Simple Path to Wealth: Your road map to financial independence and a rich, free life

J.L. Collins 2016
Insight 4 of 9

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