We don’t know when to stop.

At least, I sure don’t.

Sometimes, on the way home from work, I’ll swing by the grocery store, buy a pint of ice cream, and eat it.

That’s right. The whole thing.

Yes, I know. That’s a LOT of ice cream.

I’ve noticed that a very interesting thing happens when I do this:

Bite 1: Best thing in the world, ever.

Bites 2-10: Really good.

Bites 11-15: Good.

Bites 16-20: Meh.

Bites 21+: OK, now I’m sick.

I learned this lesson the first time I ate a pint of ice cream in a single sitting.

And yet, for some reason, I still occasionally repeat the experiment.

Of course, this phenomenon doesn’t only occur with ice cream. This is a well-documented economic principle called Marginal Utility, and, you guessed it, it applies to money, too.

Beyond a certain point, having more money will not lead to more security, freedom, and happiness.

Because security, freedom, and happiness do not come from more money (at least, not beyond a certain point). They come from knowing when to stop.

Speculating and investing are fundamentally different, and it pays to know why.

Speculating is exciting, full of breathtaking ups and downs. If you chart it over time, it looks like a heartbeat. Probably an elevated one.

Investing, on the other hand, is slow and boring. In the short term, you may have some ups and downs. But if you chart investing over time (over many years of time), it looks like a long slow curve upward.

Speculating is like a Vegas casino. Investing is like watching grass grow.

Know which game you’re playing.