Savings rate vs investment return which is the better approach?

[BOP Mustache]

My wife and I are in middle management corporate careers and earn a healthy 170k income between us.

Since I was 18 I’ve always conjured up plans to strike it big, first with the Stockmarket, picking individual stocks (performed worse than index fund over a six year period) and most recently real estate renovations and flips which have taken an enormous amount of time and focus away from my primary earning power.

I’ve come to the conclusion that if I had doubled down like my wife has on her career rather than heading up investments taking my time, we would be earning an extra 20k plus for our household each year and I’d have my weekends and weeknights back instead of reading annual reports and looking at open homes and dealing with builders, painters, etc.

So savings rate and sticking to simple index funds we would have been far better off!

What’s your experience?

[SnackDog]

Only you know your priorities and abilities.  In my career, I have always done my best but I get the same pay regardless of how hard I work. The only advantage to doing a good job is to get promoted, which is a long term approach, and to get my choice of overseas locations, which was worth a great deal to our lifestyle and also impacted income and savings dramatically.

I have also invested in before and after tax accounts.  The after tax accounts have a lot of individual stocks and I have done better than the indices over 15 years, but count that as mostly luck because a lot of the gain is due to early picks on Apple and Google.  You will find most individual stock pickers and mutual fund managers can not beat indexing except during a strong bull market.  Everyone will pick a few stocks which sound great but collapse for reasons which were hard to forecast.

If you want to work hard and take risks to get rich, you need to start your own business in something that is scalable and where you have an advantage.  There is a lot of competition in this space but plenty of room if you work hard at it.

[beee]

Every time I catch myself thinking about how to further optimize my investments, I try to stop. In the grand scheme of things, it's worth more to spend time on educating myself about something related to my career or just to work on my side projects.

[chasesfish]

Its all about choices.

Personally I've not had a ton of success "beating" the market, but still hobby around with some annual reports.  Lately I've just kept to the 5-6 companies I've known well and sell a little when they seem really high and have bought some on dips.

Real estate is a different matter - I'm not a fan of flips because its a one-time hit.  You might as well just double down on your career and let those raises/bonuses/benefits compound on themself.  That worked well for me.

 Buy/Renovate/Rent is a different matter, I kick myself for NOT doing this since it would annuitize my income.  I loose the snowball of pay/bonuses/benefits when I quit my job in the near future.

[Radagast]

Both are important. In the short and intermediate term saving rate is far more powerful and effective for reaching money goals. In the intermediate term moving from bonds to stocks can have an important. In the long run return matters,  but good look increasing investment return beyond the stock market over the long term.