Investing: Awareness
Understand what investing means, what's possible, and where you stand. About 15 minutes.
Investing is one of the few financial decisions where time does most of the work for you. A portfolio growing at 7% annually (the long-run average for global equities after inflation) doubles roughly every ten years. Someone who invests $500 a month starting at 25 would have over $1 million by 55 – and more than half of that total comes from returns on returns, not from the money they put in.
Most people who invest still underperform. DALBAR's annual studies consistently show that the average equity fund investor trails the S&P 500 by 3 – 5% annually over 20-year periods. The gap comes from behavioural mistakes – buying after gains and selling after losses – rather than poor fund selection. Basic discipline and a long time horizon put you ahead of the majority.
Professional management seldom helps. The SPIVA scorecard shows that 94% of actively managed domestic equity funds underperform their benchmark over 20 years. Low-cost index funds, which require almost no expertise to use, tend to beat most professionals over long periods. This makes investing unusual among skills: a simple, passive approach is genuinely difficult to improve upon.
Financial literacy remains surprisingly rare. Research by Lusardi and Mitchell found that only 43% of adults worldwide can correctly answer three basic questions about compound interest, inflation, and diversification. Even foundational knowledge – understanding what you own and why – represents a meaningful advantage.
People invest for different reasons. This site scores every investing intervention across three core values. Later, you'll set your own weighting across these three values, and the site will rank interventions by how well they deliver on the things you actually care about.
Growth
Maximising the long-term increase in your invested wealth. People who lean towards this value focus on compounding, appropriate asset allocation, and consistent contributions over decades. They tend to accept short-term volatility in exchange for higher expected returns, and they measure success by the total value of their portfolio over time.
Safety
Protecting your capital from catastrophic loss. People who lean towards this value prioritise diversification, position sizing, and resilient portfolio construction. They want to avoid scenarios where a single bad bet, market crash, or economic shift could wipe out years of progress. They measure success by how well their portfolio holds up in the worst periods.
Simplicity
Keeping your investment approach straightforward and low-maintenance. People who lean towards this value want a system they can set up once and sustain for decades without active management, frequent trading, or specialist knowledge. They measure success by how little time and attention their investments require while still delivering reasonable returns.
The Top 0.1% band represents roughly 1 in 1,000 people. To give you a sense of what that looks like for each investing value:
Warren Buffett compounded Berkshire Hathaway's book value at roughly 20% annually for over 58 years, turning an initial investment in a struggling textile company into one of the world's largest conglomerates. His approach relies on buying businesses with durable competitive advantages and holding them indefinitely. That rate of compounding, sustained over that duration, appears to be without precedent in public markets.
Ray Dalio built Bridgewater Associates into the world's largest hedge fund, managing over $150 billion at its peak. His All Weather portfolio strategy, designed in the 1990s, allocates across asset classes to perform acceptably in any economic regime – growth, recession, rising inflation, or falling inflation. The approach has likely influenced a generation of institutional and retail portfolio construction, and variations of it are now widely used by individual investors.
John C. Bogle founded Vanguard in 1975 and launched the first retail index fund the following year. He spent decades arguing that most investors would do better with a low-cost, broadly diversified index fund than with any actively managed alternative – a claim that subsequent data has strongly supported. By the time of his death in 2019, index funds held trillions of dollars and had become the default recommendation for most individual investors.
Awareness means knowing your starting point. Answer each question below – some you might know off the top of your head, others might take a few minutes to look up.
Growth
Safety
Simplicity
Your estimated position
Percentiles are estimates based on published research on investor behaviour and financial literacy. Safety and Simplicity are recorded for your awareness but not scored, as the available data does not support reliable percentile estimates.
You now understand why investing matters, what different people get out of it, what's achievable, and where you currently stand. The final step is to set your personal value weightings and see which interventions are the best fit for you.
On the interventions page, adjust the sliders to reflect how much you care about growth, safety, and simplicity. The table will re-rank interventions to match your priorities.
Awareness assessment complete
You've built your foundation in Investing. Your self-assessment and value weightings are saved.
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