4 Things Dead People Can Teach Us About Investing (2024)

When it comes to investing your money, dead people have the right idea.

You see, there’s this funny story that gets passed around on Wall Street. The way this story goes, one day, the chief bean counters at the financial giant Fidelity did this big study on what kinds of investors performed the best. And what they found out was, the accounts with the highest returns were classified as “dead or inactive.”

In other words, dead people do better in the stock market than living people, and it’s because dead people aren’t always fiddling with their investment accounts the way living people do.

Now, the only problem with this cool story is there’s no evidence it ever really happened. Google results turn up plenty of stories about this supposed “study” — but no actual study.

Apparently it’s a Wall Street urban legend. But hey, that doesn’t mean the point doesn’t still stand. As most people will tell you, the biggest things working on any investor’s side are time and patience. Trying to time the market, panic-selling or buying due to FOMO will almost never beat the returns of long-held investments.

So, real or not, these dead investors are onto something. Here are four things dead people can teach us about investing:

1. Buy and Hold

Dead investors are the ultimate “buy and hold” investors — in this case, we mean that they just stay consistent. Dead people, as a rule, are really consistent in their behavior.

We asked Robin Hartill for some stock market advice. She’s a certified financial planner and financial advice columnist for The Penny Hoarder. She recommends budgeting a certain amount of money to invest each month, no matter what.

“The S&P 500 has delivered inflation-adjusted returns of about 7% per year on average for the past 50 years,” she said.

Not sure where to start? It’s easy to set up auto-transfers so you can regularly invest with an app called Stash. It lets you choose from hundreds of stocks and funds to build your own investment portfolio. It makes it simple by breaking them down into categories based on your personal goals.

2. Don’t Try to Time the Market

Dead people know better than anyone: The passage of time is what matters most. That’s true when it comes to investing, too.

In other words, don’t try to time the market. It’s a fool’s errand to try to anticipate the various booms and crashes that the stock market will inevitably go through. Instead, start investing as early as possible, and focus on the long term.

“The timing of your investment matters much less than how much time you have to invest,” Hartill says. “The cost of waiting for the perfect time to invest is high. You’re missing out on long-term growth.”

All the more reason to sign up with Stash, where you can get started with as little as $1.*

3. Get Life Insurance;Give Your Family $1,500,000

Oh, to be a millionaire. Look, not all of us have the money to set up trust funds for our loved ones. But you could still leave them up to $1.5 million in life insurance — and you don’t even need to have the money in the bank.

You’re probably thinking: I don’t have the time or money for that. But this takes just minutes — and you could leave your family up to $1.5 million with a company called Bestow.

We hear people are paying as little as $10 a month.* (But every year you wait, this gets more expensive.)

It takes just minutes to get a free quote and see how much life insurance you can leave your loved ones — even if you don’t have seven figures in your bank account.

4. Don’t Overthink Things

Dead investors are great at not overthinking things. They just plug right along and do their thing without any fuss. That’s why their investment portfolios perform so well.

When it comes to investing, be like dead people. Don’t overthink things.

Hartill’s advice: The stock market will make you money if you give it time, so you might as well get started sooner rather than later.

“If you were hoping to make a quick buck off the stock market, now may not be a great time,” she says. “But true investing isn’t about making a quick buck. It’s about growing your money over time.”

If you sign up for Stash now (it takes two minutes), Stash will give you $5 after you add $5 to your investment account. Subscription plans start at $1 a month.**

Mike Brassfield ([emailprotected]) is a senior writer at The Penny Hoarder. He’s not dead.

*For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

**You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.

*Bestow: Policies are issued by Bestow Life Insurance Company, Dallas, TX on policy form series BLI-ITPOL. Bestow Life Insurance products may not be available in all states. Policy limitations or restrictions may apply. Not available in New York. Our application asks lifestyle and health questions to determine eligibility in order to avoid requiring a medical exam. Prices start at $10/month based on an 18-year-old male rated Preferred Plus NT for a $100k policy for a 10-year term. Rates will vary based on underwriting review.