Embrace Boring - Why you should invest in things that bore you

I was recently hanging out with a former coworker and we started talking about real estate investing (as one does) and a few minutes into the conversation, my friend leaned back and said,

“I get all the financial and tax benefits of investing in real estate, but honestly, the reason I haven’t started is because it’s just boring to me.”

Coming from the tech startup world, I completely understood what he meant. It’s fun to tell people you work at a healthcare tech startup! It impresses them because those are the companies that are in the news making millions and millions of dollars. Tech startups are exciting, risky, and sexy. However, boring often makes for great investments.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

-Paul Samuelson

All too often in investing, we get caught up believing that only exciting businesses deliver great returns. The thought of investing in the next tech unicorn brings dreams of great riches.

Yet high risk does not equal high reward. For every Amazon -- which has seen its stock price skyrocket by more than 175 times since it went public -- there's a Pets.com (raised $82.5 million from its IPO in February 2000 and collapsed just nine months later).

No one chases after “boring” faster than Warren Buffett. In his 2001 letter to Berkshire Hathaway shareholders, he wrote,

"I will tell you now that we have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation, and paint. Try to control your excitement.”

He wrote this letter during a wild time for the stock market. Internet stocks were trading through the roof, tech IPOs were practically a daily occurrence, and people quit their jobs to make millions day trading. So which companies did Buffett buy in the middle of the roaring tech bubble? He invested in boring:

Buffett received a lot of ridicule during this time and many thought he had lost his touch. As it turned out, Buffett was buying “brick, carpet, insulation, and paint” because he saw one of the most remarkable rises during the first decade of the 21st century coming…..Housing.

More homes were being built in the 2000's than both the 80's and 90's and rather than investing in the “next big thing,” Buffett invested in “boring” businesses that served everyday needs.

So if you think that investing in real estate is boring too, that’s actually okay! You’ll be less tempted to invest based on hype and emotions and can focus on the underlying principles of a business or stated another way, fall in love with the numbers, not the deal. It's this exact approach that has generated Buffett some of the greatest investment success the world has known.

Why not do the same?