Financial professionals love to talk about beating the market. I won’t bore you again with why this is the wrong mindset for most people when they allocate their savings. In fact, I want to discuss how underperforming is sometimes a good thing.

I’m in the 8th inning of a home remodel that turned into an almost entirely new rebuild of the home. It’s been three years in the making. It has, at times, consumed every ounce of my mind and body. Funny thing is, real estate listing websites say I’ve already made a lot of money on the house before even reassessing. I suspect this is how most people think of their real estate purchases – they remember the purchase price and the sale price and forget all the negatives in between. I know the financial truth on my house – when you account for the real, real returns (taxes, fees, time) I am deeply negative. And you know, that’s fine. Because I’ve loved almost everything minute of it.¹ After all, most of the best returns you’ll make in life are intangible, or at least unquantifiable.

It all kind of reminds me of my early trading days when my career was first going. I was running a small fund trading individual stocks on events in a very opaque and time-consuming strategy. I beat the pants off the market for 5 years and I paid dearly for it at times via taxes, fees and time.² The sheer effort alone was crazy, waking up at 2 AM many mornings and working until the market closed to prep for the next morning. It was all unsustainable and a little lucky and I knew it. It eventually burned me out and I knew it wasn’t scalable or sustainable. If you actually calculate my real, real returns I am sure they were much worse than I thought at the time.

And while I don’t do that anymore I am a smarter and better man because of it. In addition to learning about the piping of the financial system, I learned more about myself emotionally than I ever could have. Being in a 40% drawdown on a company you’ve owned for 9 hours will harden you and teach you more about your risk tolerance than any indexing strategy ever could. Boy, I don’t miss those days.

The house is similar. Yes, it’s been hard at times. But the process of building a house (and anything, a family, relationships, a business) will test you at times and make you better. It will also teach you a lot about the trades you’re involved in, yourself and those around you. For me, the learning is always the best part of the process. Yeah, I might have a negative real, real return on the house. But I have a massively positive gain in patience, process, positivity and, of course, pragmatism.

I guess that’s the story of my life though (and probably yours). Just trying to become a better person by realizing lots of intangible positive/negative returns from life’s many lessons. In the end, I think there’s some alpha there.

¹ – Hello septic system rebuild!

² – I didn’t make a dime for 6 months in 2008 during part of the crisis. That was fun.