Reading · Dillon Valdez Growth Investing

It was late November, 2019, in Minnesota. I was driving back from the gym as I found myself thinking intently about what separates people from success vs failure. See, I come from a very unique journey and the experiences I had in my life (especially my early adulthood) were nothing short of difficult. So at 28 years old, I began to notice a pattern in my life.

In my late teens, I had a devastating family event that sent me down a tough path. I went from a really solid student to barely passing high school within 1 semester. It was difficult to process, difficult to overcome and it was difficult to focus. Dealing with “life” during developmental years are not an end all, but it certainly makes things more difficult and throws you off balance compared to folks who spend their time worrying about sports, dating or fitting in with friends.

In the years that followed that event, I had an extraordinarily hard time getting my life back together. Rather than processing emotions correctly, partying became a common routine for me, as an escape. When we’re around 17 to 19 years old, our frontal lobes are not fully developed so impetuousness, and emotions, can lead to poor decision making especially without a strong morale foundation. Looking back, this was certainly a forgettable time frame in my life.

Fast forward to young adulthood, at 19 years old (almost 20), with my first year of College down (hint, I did absolutely terrible), I knew I had to do something different. I had to do something radical to get me away and build a foundation for the rest of my life. So, I did what any struggling young man does…. I joined the Marines!

The time I had in the Marines could be an article of its own, and for now, there’s a broader thought that I had that day in late November. Although the Marines were instrumental in my development, when it comes to processing “what separates people from success vs failure”, it was not everything. There are certainly foundational characteristics that I took away during that time, like:

• Grit

• Resilience

• A “can do” mindset

• Relentlessness

• Internal confidence

• “Belief” - in myself

• Discipline

• Work ethic

After the USMC, I took this newly developed foundation, as I adventured back to College to finish my degree. Attending College this time around, I was significantly more successful as I consistently put in the work necessary. That’s the key here, I put in the work. Before, as a young adult, I let my emotions destroy me and my impetuousness take hold of my decision making. I gaffed off at assignments, ignored teachers directions and dwelled upon “that event” that took place when I was 17 years old. To me, at the time, I thought I was doing what I needed to do, but that wasn’t the case.

I’ve always lived a little more out in the country, so it was a longer drive coming back from the gym. At this point now, I rounded the exit next to the Walmart and stopped at the local liquor store. In 2019, I was 28 years old and my Dad got me into drinking Whiskey. I bought my bottle of Woodford Reserve, went back into the car, put it in drive and turned my way back home. I continued to think, “what could I have done differently? Where did I go wrong at this point in my life?”

Between this time and my College graduation, I had recently underwent one of the most challenging years of my life, rivaling even the Marine Corps years. Until this point, I hardly lived in one place longer than two years, since I was 19 years old. I had lived internationally (Japan) for 2 years along with 5 different States within a short 9 year stint. This last year, however, was extra difficult as I finally began to realize my own mortality. I was months away from turning 29 and I recall thinking, “I’m almost in my 30’s and I have nothing to really show for it.”

There’s a law to the universe, one where we must all pay the price. Could the years of hard work, travel and self exploration finally pay off? I began connecting the dots of my past and thought about all the times I was successful as well as the times I fell behind and I noticed that there was a pattern there.

When I fell behind in life, I often prioritized comfort or “numbing” my circumstance, exchanging instant relief for long term relief.
1. Alcohol/drinking and partying
2. Watching TV
3. Dating without purpose, etc
When I pulled ahead in life, I often spent prolonged periods sobriety and in disciplined work/focus. I forwent immediate gratification for long term gains.
1. Going to the gym
2. Doing my school work to graduate
3. Taking chances/risks, etc

The dots where connecting, I began to think of life less as a random existence (for decisions only to be made in the moment) but rather began thinking of life as a series of choices. Good choices often had compounding effects, much like going to the gym. Rarely can someone go to the Gym for 7 hours and see gains, however, if someone went to the gym 7 times, for one hour a piece, over the course of 1-2 weeks, this would actually yield more results. Life was less about doing major, life altering, decisions where massive wins can happen. Instead, it was more nuanced, methodical and almost boring.

The law, from what I began to understand, was that consistent effort and approaching a goal with a disciplined approach, rather than a motivational approach, yielded meaningful more results. I began to think about the progress that I made in the gym and noticed that discipline, and consistency, was meaningfully more effective. I thought about graduating college and noticed that 4 years of hard work (doing the work every day) paid off and helped me reach a goal that changed the course and direction of my life. I began to assess other facets in my life and noticed that this principle/law was applicable to nearly everything.

I began to tie this even toward partying, how I approached dating, how I worked and even how I invested. When I drank, or partied, I’d often spend the morning nursing a hang over. If I didn’t party, or drink, I realized I was significantly more productive. I’d wake up earlier, accomplish more, read something interesting or communicate differently/effectively. For instance, the chain of events, with one simple decision like drinking on a Friday night, this is usually what would happen:

Drink on a Friday night
Have lots of fun, but not remember much and make friends whose names I would forget
Spend a ton of money
Go to sleep
Wake up late, around 10:00am, dehydrated, foggy and unthoughtful
Eat something, drink electrolytes, go for a walk, eat a little more
Start to feel better around 3:00pm or 4:00pm
Start planning to go out again in the name of building a “social life”

However, on the flip side of this, if I spent my Friday night going to the gym and stayed sober, this is how my Friday would look:

Go to the gym
Feel accomplished
Spend time with family
Go to sleep
Wake up around 8:00 am
Be productive and work toward my goals, or learn new skills

Now, I’m not saying that a young person should never go out and build a social life (because I was young at this stage). I am saying that in-order to truly become successful, you must forgo the crutches of instant gratification. There must be a mindset shift toward delayed gratification, doing something you don’t want to do that you know you need to do and prioritizing what you need to do, rather than what emotionally feels good in the moment.

With all things, the mindset shift, this approach and this strategy can be directly applicable toward investing and becoming a successful investor or entrepreneur. The vast majority of people, I’d say roughly 90% or even 95% of people typically react to their external stimuli. There are very few people, 5-10% of the population, who proactively work toward some sort of longer term goal. 5-10% of people develop a goal, actively/consistently work toward it and understand that it’s not the big decisions that create success but it’s rather the little decisions. Through this process of making little decisions a big deal, you begin to shape a new reality, one that was created by internal stimuli to shape the external stimuli that responds to you.

note: 13% CAGR is what the NASDAQ has returned for 10+ years. The S&P is weighed down by other sectors like tabbacco or other mature industries.

For instance let’s just take $250, which isn’t much money on a monthly basis. Even people making less than $100,000/year can round out impetuous purchases like brand new depreciating vehicles, alcohol, drugs, cigarettes, partying, etc, and find $250 in their budget, which is only $3,000 annually. The question becomes if we, as humans, can find the discipline necessary to (on a monthly basis) forgo some sort of instant gratification to invest into our future selves. The longer you can do the right thing, the more rewarding it is.

Note: 25% returns on an annual basis is my goal for managing my own money

If you aim a little higher, spend a couple Friday/Saturday nights learning how to invest and manage money correctly, you could ideally get to a point where you average 25% returns. This isn’t easy, as it requires you to do many things that are inherently against your nature (instant gratification is in our nature, delayed gratification is against our nature). It requires you to:

Buy when others are selling
Trim positions when you don’t want to
Learn to distinguish signal from noise
Invest time researching the company’s behind the stock
Pay attention to financial markets
Develop a process that works for you
Think long term (delayed gratification), rather than short term (instant gratification)
Pass up opportunities that don’t fit in your process

Note: Below are my actual results over the past 3 years of documented, 3rd party verified, trustworthy results

Link: Dillon's Portfolio

You can follow my portfolio, if you’d like, to see how I invest, by clicking on the above link.

Your life can change by understanding that what you do today, tonight or tomorrow matters. What you do day in and day out, also what you don’t do, matters. I can’t exactly say why it matters, but I know that it does and it’s a universal fact that applies to all humans all across the world. It matters when you: