The Boring Investing Habit My Grandmother Would Have Hated

My grandmother Solveig lived on a small farm outside Voss and kept her savings in two places: a red tin in the kitchen cupboard and a passbook from the local savings bank. She did not trust anything she could not touch. When I told her, in 1998, that I had started putting a small amount into a broad stock fund each month, she looked at me as if I had said I was gambling at a horse track.

Twenty-six years later, that small monthly habit is the largest part of our savings. I want to describe it honestly, because it is the least exciting thing I have ever done with money, and I think that is exactly why it worked. I am not a financial advisor, and this is only my own experience.

What I actually did

In 1998 I was twenty-six and earned a modest salary as a junior accountant. I set up an automatic transfer of 500 kroner a month into a low-cost global index fund. Over the years, when I got raises, I increased it. It went to 1,000, then 2,500, then more after the children were grown.

I did not pick stocks. I did not time the market. I mostly did not look.

The years I wanted to stop

It was not always calm. In 2008, the value of the fund fell by more than a third over a few months. I remember sitting at the kitchen table, looking at the statement, and thinking that Grandmother had been right all along. My colleague at work had sold everything and moved to cash, and he talked about it as if he were very clever.

I did not sell, mostly because I was too busy with two small children to do anything at all. That laziness turned out to be the best financial decision of my life. The fund recovered within a few years, and the money I kept putting in during the bad months bought more units at lower prices.

In 2020, during the pandemic drop, I was older and calmer. I still felt a knot in my stomach, but I knew from experience that I would not need that money for many years.

Why boring works for me

I think the habit worked for three reasons, none of them clever:

• It was automatic. The money left my account on payday before I could think about it.
• It was cheap. The yearly fees were low, so more of the growth stayed with me.
• It was dull. Because nothing exciting happened most months, I was not tempted to act.

My colleague who moved to cash in 2008 bought back in, I believe, around 2012. He missed some of the best years of recovery. He is a smart man. Being smart did not help.

What Grandmother got right

I do not want to be unfair to Solveig. She lived through the war and through times when banks did fail and money did disappear. Her red tin made sense for her world. And she taught me something I still use: always keep some cash you can touch. I keep about four months of expenses in an ordinary savings account, and I never invest that part.

When she died in 2006, we found 3,400 kroner in the tin. My mother still has it, in the same tin, in her own kitchen cupboard.