To The Moon

The Problem with Underestimating Classic Investments

People often overlook or underestimate classic investments—things like gold, ETFs, mutual funds, and quality equities. Why? Because they seem… boring. Too slow. Unexciting compared to a quick double in speculative stocks. But this is where most investors get it wrong.

As humans, we naturally seek safety. Many are more comfortable earning 2–3% in fixed deposits, thinking it’s “better than losing money.” At the same time, when they hear equities or index funds may return 10–12% a year, they shrug. “What’s the big deal?”

But here’s the irony:

The same person might chase a penny stock that doubles in a day…

Only to reinvest the gains and lose it all the next time.

That cycle repeats—and in the long run, it’s a net loss, not wealth creation.

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What Most People Miss: 2nd-Order Thinking

This is where second-order thinking comes in. It’s not about what happens today or tomorrow. It’s about understanding the long-term impact of small, consistent returns.

Let’s break it down:

• A 12% return compounded annually means your money doubles every 6 years.

• In 20 years, that gives you roughly 4 to 5 doubling cycles.

📈 Here’s the math:

• Start with $100K

• Year 6: $200K

• Year 12: $400K

• Year 18: $800K

• Year 24: $1.6M

• Year 30: $3.2M

That’s 32x growth—without taking wild risks, just by staying consistent and letting time and compounding do the heavy lifting.

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The Real Edge: Time, Patience, and Simplicity

It’s not about hitting home runs.

It’s about not striking out.

Classic investments may not make headlines, but they quietly build real wealth. The market rewards discipline over drama, and consistency over chaos. If more investors understood this basic principle, they’d stop chasing noise and start building futures.

“You don’t need to beat the market in a day — you just need to let the market work for you over decades.”

#jagannathan janakiraman