Investing can be like going to the casino

Investing can be word that cause fear in many people. People like my uncle, who lost his life time of saving. The stock market lures you in like casino if you don’t follow good principles in investing. On the other hand, people who think they know investing but failed to do sufficient audit on their own emotions fail too at this game of investing. Lastly, I share about how young adults now do more than the previous generation in understanding money and finally there is a new pool of people who work hard at sourcing information about money, investing and a better outcome in life with money.

Let me share three stories about investing with you today. And let’s talk about the thing that is seldom talked about – people losing their money in the stock market. A lot of it. How? And what do you do?

Investing can be like a casino if you don’t follow good principles of investing. We all are susceptible to our ego, an urge to prove how smart we are and the adrenaline of winning. And we all have one relative we know of who is entirely fearful of investing and this fear came from somewhere. My uncle and his fear of investing is the first story I want to share with you. You see my Uncle is a conservative man, he worked for the government, wanted to play it safe, seldom or never upgraded his skills. He believed the government is going to take care of him and boy was he wrong. He started investing or shall I say gambling like many others, through his retail bank. His retail bank helped him open a brokerage account. It was easy. There was no need for additional financial checks or identity submissions. It was a click, some questions and viola, he has his account. Because my Uncle seldom read, or want to learn about finance, he has little knowledge of the stock market. He went into the stock market like he went into Walmart. Thinking he can buy stocks cheap and hit it rich. Unfortunately for him, like many retail investors, esp. those termed mum and pop investors, he didn’t understand what are penny stocks, what is volume risk, what is bluechip and what’s long term versus short term risk, what’s small cap risk and returns. You see my Uncle felt a great deal of adrenaline when he went into the stock market with his savings and hard-earned money. His early success and profits in trading in and out, made him plough in even more of his savings. Like everything in stock market, the party ended when recession hits, which we know always come. He decide to panic sell, and made a huge loss. He swore off stock market as a way institutions cheated his money and that stocks are all bad.

I wished my Uncle and many others would read up, research and understand many aspect of investing. For example, what is risk and return, and the difference between buying a small cap company versus a big cap company. I wished someone would teach him how to check if a company is set up in Bermudas and how different is that from a company registered locally in united states. I also wished someone would just tell him to check on the auditors on the company he invested because in the end, the company he invested flopped and my uncle not only lost all his savings but lived with a life long shame of losing his money. Information are everywhere now, I wonder why such basic help is not made available to people like my uncle.

Another story is about my friend who was in finance. Obviously because of his background, I expected him to have very sound financial knowledge of investing. Wrong. And very wrong. You see, they teach finance, ratios and price per earnings, mathematical modeling and everything complex you can think of. But I noticed in my finance syllabus, they never taught you what human emotions are involved in investing, how to analyze the best investors and keep to a good investing habit. They did not teach finance graduates how to read up on short sellers, who “game” the system and often lead to huge waves of price change to the stock, and panic. They did not teach finance student like my friend, what losing a lot of money meant for mental health. Perhaps these colleges never taught enough of how experts and gurus who invested long term, has very good discipline and did not let greed of higher returns overcome them. Maybe if they have taught my friend, How to research investment habits based on giants who have continuously returned a profit in the stock markets over 30 years, he wouldn’t have attempted to take his life, lost his marriage. (Yes, there are people who make a living investing in stocks and consistently made a profit). So I know there are many men in their 30s and 40s out there, gambling ferociously with their money, feeding their ego when they win and like my friend, some are going to end badly. I started this blog and course to help people similar to my friend.

The last story I would like to share with you is one about my friend, who is much younger than most of the people I mentioned. She is just 19. But like many of her peers nowadays, she is already looking into FIRE movement, learning about personal finance in bits and pieces. In fact, many young adults nowadays are very quick to learn about money, how they can understand the system of study hard, graduate and find meaningful work. Many young adults, are even doing real life projects on money and spending. So you see, personal finance education is catching on because this new generation saw how hard their parents worked, for a mortgage, paid their taxes, car loans and didn’t take vacations. They know if they master their money, they have a chance at mastering their destiny. They start little investment clubs to talk and analyze about stocks, starting with the places they know, like Walmart, Costco, Apple, Amazon, Dairy Queen.

I hope my stories helped you understand that investing can be fun. I also hope you will go out there, take some courses even if you are not taking ones I am offering, take any courses to learn more about money, stock market before you start investing. Investing can feel a lot like gambling if you are not careful, it lures you in with adrenaline when you make money like a casino. And last of all, you do need not be a fearful of the subject investing, if you approach it with the right attitude.

Putting your money in fixed deposit hurts those who doesn’t earn a lot because inflation and the lost of the magical compounding effect.

Start somewhere small today, read up on something about investing. Read the terminology. Money and finance may not be your favorite subject in school, but getting the ABC of money and finance will save you a lot of sleeplessness.

My name is Lee Nagel, I am a youtuber, and I write and share about money, love and life.

This blog is also on youtube

Rich Life with less? the movement started by the minimalist Joshua Fields Millburns

Have you heard of Joshua Fields Millburns? Me neither. That was before I started becoming unhappy with more and more stuff.

Many years ago, I was like everyone else. I was the perfect citizen. i have done the perfect thing, I studied hard, obtained my master degree, got a great job and job title. I was climbing the corporate ladder. I bought two properties before thirty years old. And with that I bought a lot of “stuff”. I have plans to be promoted, salary increment, buy the house and be set in life.

Health, relationships, values and satisfaction in life were not on my list. I was still buying a lot of things, to fill up my life. Because I was surrounded by malls and advertisements. I never thought of anything wrong with it.

I worked hard, and making good money. I thought $100,000 would make me happy. I was spending more every time I get more money. I felt overwhelmed.

And finally came the time for me to move apartment. I was so paralyzed by the things I owned, I couldn’t do anything. I couldn’t pack, I couldn’t discard any of my stuff. I realized my stuff have controlled me. I have strong attachment to my things, more than the people, my values, my health and it is almost an addiction I don’t know.

Then one day, I stumbled upon The Minimalist. I was so shocked they got rid of their stuff. I started following Joshua Field Millburns and his netflix show. I also read the book Marie Kondo. It helped me detox my life, my intention to consume.

In his interview, Joshua Field Millburns said that – Like many Americans, he too climbed the corporate ladder. He had a larger and larger salary. He had many credit cards, he was consuming more, to acquire more material trophies. He tried to pacify the void in his life, and buy more stuff. Everytime he buys something, it gives him a burst of pleasure. He said his health is important to him, but he was not spending time on his health. He wasn’t working out. He said his relationship was important to him, but he was not spending time with his wife. He was in his office or out with his tertiary relationships, co-workers, colleague most of the time. He was not allocating time to spend it with the closest people in his life. He continued to climb the corporate ladder. He has a whole plan laid out for himself, to be “set in life”. He thought more money, he would be happy. It was never enough. By the time he had 6 figure salary, he was more in debt.

He felt overwhelmed. He did what every American did, he accumulated more stuff hoping to fill the void. Unfortunately, it didn’t fill the void. In fact the stuff widen the void. He was overwhelmed.

He saw his colleague has his first heart attack at age 30. He told himself, he wouldn’t be the same. But if you follow the recipe you are going get the same pie they baked. He said to himself, he need to make some changes to his life, but he didn’t know how.

Until his mother died, and his wife left him all in the same one. He realized he was focused on the trophies of life. “Look at me, I have two Lexus, a house…I am successful” The problem is I am not broadly successful.

“There is nothing wrong with consumption. The problem is that we are sold this thing on compulsory consumption. For example when you meet someone, you get asked “What do you do”. It is a question about how much you make, what’s your social status, and what’s that compare to me. “

Instead of that, you can say “What are you passionate about?” It makes the conversation richer. Sometimes this can also be your vocation.

“We all have to earn a living. I was so focused on accumulating stuff, my whole life was focused on that identity.”

“I was spending more and more. I was full on consumer debt. Soon, credit card purchases, mortgages were adding up. Average American has 4 credit cards. 1 in 10 Americans has 10 credit cards that are active.”

What actually adds value to your life? What material possession augment your life, and make it better. By watering it down, to the less, it gave him perspective. His book “Everything that remains”.

Joshua Fields Millburns found that holding on to less stuff, gave him more clarity, more space. And that space was able to allow him more focus.

Over the course of 30 days, he let go of one item a day.

Even though he was a well organized hoarder, he manage this experiment of getting rid of 30 items. over 30 days, and it gain momentum.

Read about Joshua Field Millburns, he did an experiment where he switched off his internet, where he is writing. He is writing. He was forced to be with your thoughts and be with people. He said the whole experiment was like “removing your pacifiers”

He also spoke of this book ” Deep Work”. How have internet changed your level of concentration?