RPF0460-How_to_Decide_What_You_Should_Invest_In
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00:00:14.840 | Welcome to Radical Personal Finance, the show dedicated to providing you with the
00:00:18.600 | knowledge, skills, insight, and encouragement you need to live a rich and meaningful
00:00:22.920 | life now while building a plan for financial freedom in 10 years or less.
00:00:26.640 | My name is Joshua and I am your host.
00:00:28.760 | Today we tackle the subject of investing.
00:00:31.440 | There's many versions of this question that I receive on a continual basis in my email.
00:00:36.920 | Today we're going to go with Joe's version.
00:00:38.960 | Joe writes in and writes this, Joshua, I'm currently an active duty Navy member living
00:00:43.160 | in Japan, and I'll be here for the next two years.
00:00:45.440 | I'm 20 years old and I've been consumed by your podcasts and other podcasts on
00:00:50.240 | investing and personal finances and how to be fruitful.
00:00:54.040 | This year I went from making less than $10,000 a year to now almost $30,000 and
00:00:59.640 | was spending recklessly as soon as this increase in income occurred.
00:01:02.840 | I have no bills I have to pay beside my phone bill and groceries every month.
00:01:07.640 | And it seemed like I was always sitting on an excess of cash.
00:01:10.440 | Every check that I didn't know what to do with, except blow away before the next time
00:01:14.280 | I got paid, whether it was buying electronics, eating out, buying clothes,
00:01:18.640 | et cetera, I spent every penny I had.
00:01:20.080 | And I also stacked up around $3,000 in credit card debt.
00:01:23.960 | So also instead of you responsibly using a chunk of the money I was expecting to
00:01:27.520 | receive to pay that debt off, I instead use it to go on a European vacation to
00:01:31.600 | London and Italy for 16 days.
00:01:33.560 | Probably wasn't the best move financially.
00:01:35.960 | The reason I'm emailing you is because I have paid off this debt and have halted any
00:01:40.480 | and all of my unnecessary spending.
00:01:42.600 | And I'm now seeking some sort of positive outlet to plug this money into through
00:01:48.040 | investing.
00:01:48.640 | I plan to save a significant amount of it for an emergency fund, but just saving my
00:01:53.280 | money doesn't appeal to me.
00:01:54.440 | And it seems like a waste of my time.
00:01:56.120 | If I could also somehow create another source of income through investing my money,
00:02:00.680 | or at least test the waters of investing as a way of spending it in a more productive
00:02:04.880 | way, what aspect of investing could provide a secondary source of income?
00:02:08.600 | Any advice or tips on where to start learning how to do this or where I should look for
00:02:13.040 | some solid information on what the best option would be for a young person without
00:02:16.920 | knowledge on the subject?
00:02:17.960 | Regards, Joe.
00:02:19.160 | Joe's question may seem simple.
00:02:24.120 | And in some way it is.
00:02:25.280 | But there are, of course, many different layers and ways in which you could answer
00:02:32.040 | it. Today, I want to tell you how I think Joe and you should approach the subject of
00:02:40.080 | investing and figuring out what to invest in.
00:02:43.000 | But we need to start with just a little bit of my background so I can tell you why I
00:02:47.840 | don't just recommend that Joe go and open a Roth IRA, buy a Vanguard total stock market
00:02:53.520 | index fund and go on with his life.
00:02:55.720 | It's not that I don't think that such a plan, as you would commonly hear from many
00:03:01.600 | personal finance pundits, is necessarily wrong or even necessarily ineffective.
00:03:11.480 | I just don't think it's optimal.
00:03:17.440 | I have a somewhat difficult relationship personally with the world of mainstream
00:03:21.720 | personal finance.
00:03:22.800 | I come from the world of mainstream personal finance.
00:03:27.040 | When I was growing up, I enjoyed reading books on personal finance and investing,
00:03:32.720 | but I didn't get particularly involved in the books or theories of those who were on
00:03:38.120 | the fringes.
00:03:38.880 | I was involved in relatively mainstream advice.
00:03:45.040 | I remember one of the books that when I was in high school, I read that really
00:03:48.400 | impacted me was David Bach and his book, original book, The Automatic Millionaire.
00:03:53.800 | In said book, David recommends that you minimize your expenses by removing various
00:04:01.760 | small but regular expenditures from your budget.
00:04:07.040 | An example would be a daily latte at the fancy coffee shop.
00:04:11.560 | If you can remove that and invest the money instead, you can accumulate quite a
00:04:15.400 | bit of money.
00:04:15.920 | That's where he coined the term and trademarked the term the latte factor.
00:04:20.000 | Additionally, David recommends that you set up your plan so that it functions
00:04:26.520 | automatically.
00:04:27.200 | Make an automatic transfer from your checking account into your investment plan,
00:04:33.480 | or perhaps do an automatic distribution from your paycheck, from your employer,
00:04:39.800 | into an investment plan.
00:04:43.040 | He also recommends that you purchase mutual funds and perhaps consider paying off
00:04:48.800 | your current house and buying a rental house.
00:04:50.760 | In the book, he gives various resources such as a company like Fidelity or a company
00:04:57.760 | like Vanguard that you could call up and use and set up a tax favored investment
00:05:03.080 | account.
00:05:03.560 | Is there anything wrong with that plan?
00:05:09.000 | I think it would be wrong to say that there's something wrong with it.
00:05:13.080 | But is it really right?
00:05:17.280 | See, a frustration that I had in working in the world of professional financial
00:05:23.120 | advice was it really didn't seem like that plan worked for many people.
00:05:27.880 | Oh, sure, it would work for some, but it didn't seem like it would work for very
00:05:34.360 | many.
00:05:34.840 | The data proves me out.
00:05:38.520 | Most people in the United States of America can't scrape together a few thousand
00:05:44.280 | dollars if they need it.
00:05:47.520 | Most people in the United States of America, richest country in the history of
00:05:52.360 | the world, richest time in the history of the world, most people will never be able
00:05:56.960 | to afford to retire.
00:05:58.520 | Now is the problem that they didn't have access to a 401k account, that they didn't
00:06:06.720 | fund it?
00:06:07.280 | You can make an argument, at least to the funding question, that yes, if they'd
00:06:14.120 | funded an investment account, it could have worked.
00:06:16.000 | But I've just not seen that plan as super effective.
00:06:21.480 | Now, when I was involved in the world of mainstream personal finance, I looked
00:06:25.880 | around and realized that there were all kinds of people doing other things that
00:06:33.280 | didn't fit well in 180 page book that would sell well on the Barnes and Noble
00:06:38.760 | bookshelf.
00:06:39.360 | But yet these other approaches to finance also worked.
00:06:44.160 | Over the last few years, I've really considered these questions.
00:06:48.360 | And I had a number of misgivings and questions about mainstream personal
00:06:54.080 | finance world that I was things I wasn't sure of.
00:06:57.920 | And I resolved not to try to make any quick decisions, not to try to come up
00:07:03.080 | and make a strong decision one way or the other, but just to let some time go, to
00:07:07.520 | let my thoughts percolate.
00:07:08.680 | There's a very powerful statement that says, "It's hard for you to expect a man
00:07:17.280 | to see your point if his paycheck depends on his not seeing it." I've always been
00:07:24.200 | pretty sensitive to that.
00:07:25.400 | And there are a number of controversial areas in the personal finance world where
00:07:29.680 | I've wondered, are my thoughts and opinions colored by my paycheck?
00:07:37.120 | In some cases, I think they were.
00:07:40.400 | In some cases, I think they weren't.
00:07:41.720 | I've sorted through some of those things and done my best to try to make fresh
00:07:45.960 | decisions.
00:07:46.800 | But on the topic of investing, I'll tell you what, knowing what I know now about
00:07:54.840 | the world of mainstream investing, I wouldn't participate again.
00:08:02.240 | If I were Joe starting over 20 years old, or if I were coaching Joe as a client or
00:08:09.280 | perhaps as my nephew or a son, I wouldn't coach him to say that his primary tool
00:08:17.640 | or his primary approach to the question of investing is to go and open a Roth
00:08:24.480 | IRA.
00:08:25.000 | Nor would I necessarily say that he shouldn't do it.
00:08:30.560 | I would seek to start to teach the deeper things.
00:08:36.480 | So let me give you just some ideas.
00:08:39.640 | I've got a list of eight, eight ideas that I think are useful and worth considering
00:08:45.480 | when it comes to investing.
00:08:46.680 | And here are some of the factors that you should choose to look at.
00:08:52.760 | I do not know what Joe or what you should invest in.
00:08:57.280 | I don't even know where to tell you or Joe to go to look for knowledge.
00:09:03.600 | I've never seen any of what I'm about to give you written formally, but it's some
00:09:08.640 | of what I've put together just in my thinking as far as some of the appropriate
00:09:12.120 | factors.
00:09:12.840 | Factor number one is you should consider the amount of time that you have available
00:09:19.680 | for an investment activity and recognize that the more time that you have available
00:09:28.080 | for an investment activity, the more money you can put into the investment activity.
00:09:36.560 | People with a lot of time on their hands should aim their investing activities into
00:09:44.720 | a world where time can be used constructively.
00:09:49.640 | As I work through today's show, I'm going to try to use very simple examples.
00:09:54.280 | Take these examples as illustrations, not as specifics, and think about each of my
00:10:01.720 | examples and consider its applicability in your local area.
00:10:08.640 | Start with something most of us can relate to, and that's real estate.
00:10:12.560 | If you desire to invest in real estate and you have a lot of time available to you,
00:10:19.520 | one thing you can do is use that time to try to find properties, properties that are
00:10:29.160 | undervalued or devalued.
00:10:30.960 | And this is a very valuable but also time-consuming activity.
00:10:36.040 | For example, many real estate teachers will teach you to go out and drive around
00:10:41.480 | looking for houses that seem abandoned.
00:10:44.360 | Or some will teach you to walk up and down the streets and knock on doors and seek to
00:10:50.920 | find out what the story is on the property and see if there might be a potential
00:10:55.560 | opportunity.
00:10:56.080 | If you're an investor who has time, these activities are well-suited for you.
00:11:02.960 | You don't have to have any money to do that, but you do need time to do that.
00:11:10.080 | If I had a lot of time, I'm quite confident I could build a career going and finding
00:11:15.360 | deals in the real estate world, and you just simply bring that deal to somebody who
00:11:19.960 | has money and they pay you for your work.
00:11:23.360 | This is normal.
00:11:24.160 | This is common in the world of real estate investment.
00:11:27.480 | So if you wanted to pursue real estate investment and you had a lot of time, you
00:11:32.280 | would choose a strategy like that.
00:11:33.760 | But what if you don't have a lot of time?
00:11:37.560 | What if you want to invest in real estate, but you're a busy corporate executive?
00:11:41.200 | A strategy of investment that requires you to go out and spend your time driving
00:11:48.200 | around looking for abandoned properties or knocking on doors is probably not a good
00:11:53.680 | fit for you.
00:11:54.440 | So how much time do you have available for your investment opportunity?
00:11:59.960 | You should analyze that.
00:12:01.840 | And you should analyze that and look for investment opportunities that will fit what
00:12:09.160 | you've got.
00:12:10.840 | Our friend Joe is in the military.
00:12:13.360 | That means in some ways that he doesn't have a lot of time.
00:12:17.160 | After all, all of his time is owned and directed by the US government.
00:12:22.440 | But in other ways, he probably does have a lot of time.
00:12:26.040 | After his work week, he's got time where he's hanging out in the barracks and he's
00:12:30.800 | got his leave time, etc.
00:12:32.360 | And given the fact that he has minimal responsibility, I don't read anything
00:12:36.920 | about a wife or children, he doesn't really own any property to consume his
00:12:42.160 | time.
00:12:42.520 | Joe's got time available to invest in his investment activities.
00:12:49.440 | So we've got to figure out how do we use that time appropriately.
00:12:55.280 | Second factor you should consider is money.
00:13:00.280 | Money can be a real problem for an investor.
00:13:04.720 | The lack of money can be a problem and an excess amount of money can be a problem.
00:13:12.160 | If you don't have any money, you'd better pick an opportunity for investment that
00:13:19.600 | doesn't take much money.
00:13:20.880 | I described in the last few weeks how my son has made his first successful
00:13:27.200 | investment and we did it in the honey business.
00:13:30.120 | He had saved and accumulated from his weekly 75 cent allowance.
00:13:34.920 | He gets a weekly 73 quarters every week on Friday and then we put a quarter into
00:13:40.600 | his giving bag.
00:13:42.280 | We put a quarter into his spending bag and we put a quarter into his investing
00:13:45.200 | bag.
00:13:45.480 | And so he had accumulated week by week in his investing bag about $5.
00:13:50.400 | And we were trying to figure out a way where he could invest that money.
00:13:53.800 | It's five or six dollars, I think, by the time we got this done.
00:13:56.040 | And we're looking around and saying, how can we invest six dollars?
00:14:00.480 | Interesting problem.
00:14:01.560 | Had a couple of ideas.
00:14:03.960 | I broached this question in the Radical Personal Finance Facebook group and
00:14:06.640 | somebody suggested that we go out and buy a case of water and then we chill that
00:14:12.640 | water and go and sell it for a dollar a bottle.
00:14:14.640 | That's actually my favorite idea.
00:14:17.760 | We haven't done it yet, but we're planning to.
00:14:19.480 | And I want to show that to you as an example to say, if you've got five dollars
00:14:24.200 | accumulated, you can take that five dollars and you can invest it profitably.
00:14:28.920 | Right now at Costco, they sell a tray of about 30 bottles of water for under four
00:14:34.400 | dollars.
00:14:34.960 | You can take that tray, find a way to chill those bottles down, get yourself a
00:14:40.600 | cooler and ice and take those bottles of water to a place where people would be
00:14:45.240 | happy to buy cold bottles of water and sell them for a buck a bottle, 50 cents a
00:14:49.920 | bottle.
00:14:50.240 | Assume you sell all 30 bottles out.
00:14:52.840 | You've now made a profit on your investment of $26, turned $4 into 30.
00:14:58.360 | That's a pretty good investment.
00:14:59.720 | Doesn't require a lot of money.
00:15:02.080 | We're going to do this with my son.
00:15:04.040 | Got to figure out where to do it and I got to dedicate the Saturday to doing it,
00:15:08.120 | but that's part of our plan.
00:15:09.600 | I want him to see that you can always invest just a little bit of money.
00:15:13.600 | Now in his case, his investment was he's a family member who's in the honey
00:15:17.600 | business.
00:15:18.160 | He bought five little honey bears, very small ones, bought five little small
00:15:22.800 | honey bears for a dollar each and then sold them to friends and family who were
00:15:26.240 | coming to our house to visit the new baby for $2 each.
00:15:29.560 | Well, he invested his money, but he only had a little bit of money and so there
00:15:35.920 | was only a certain scale.
00:15:37.040 | He could only buy five honey bears.
00:15:38.520 | He couldn't buy a truckload of honey.
00:15:39.880 | On the flip side, sometimes having too much money is a real problem as well.
00:15:45.800 | Warren Buffett famously has right now approaching $100 billion, over $90
00:15:52.680 | billion, approaching $100 billion of excess cash just sitting in what we'll
00:16:01.000 | call a bank account that he's got to figure out how to invest.
00:16:04.880 | Investing $100 billion profitably is a real problem because to torture the
00:16:16.160 | comparison, it would make no difference in Warren Buffett's $100 billion
00:16:20.600 | investment for him to spend $4 on a tray of water and turn it into 26.
00:16:25.400 | It has no impact.
00:16:28.400 | So he's got to find huge deals.
00:16:30.440 | Now the key is to invest at a level that's appropriate to you.
00:16:35.600 | Continuing on with real estate, it may be very possible to create a big profit
00:16:45.440 | from buying a $15,000 mobile home and working on it for a little bit and
00:16:51.720 | flipping it for $30,000 if you don't have a lot of money.
00:16:55.360 | You could do that profitably.
00:16:57.480 | But if you're that busy corporate executive and you have a couple hundred
00:17:03.880 | thousand dollars extra per year that you're trying to figure out how to
00:17:07.040 | invest, it's hard to conceive of doing deals on a scale of $15,000.
00:17:14.920 | So when you are trying to figure out what to invest in, you've got to look at how
00:17:20.240 | much money you have available to you and choose something that's going to be
00:17:24.680 | appropriate for the amount of money that you want to invest.
00:17:28.240 | During the course of your investing lifetime, this will probably change.
00:17:33.160 | So you should be prepared for it to change.
00:17:36.360 | These two factors I'm convinced are the two most important places to start.
00:17:44.320 | Time and money.
00:17:45.240 | And you got to try to match your investments to your time and your money.
00:17:49.680 | Now you'll notice that I'm using the word investment very loosely.
00:17:54.200 | I don't know how to escape that in the context of today's show.
00:17:57.520 | Investment and business are very much mixed up here in my discussion.
00:18:03.360 | But that's okay because investment is also mixed up with job.
00:18:09.920 | What do you do when you have a huge amount of time and no money?
00:18:14.240 | Most likely you'll get a job.
00:18:18.000 | And what's the best use for that money that you earn?
00:18:22.560 | Most likely is to invest it back in your job skills, in your
00:18:27.280 | job qualifications, et cetera.
00:18:29.160 | If you think about the person starting completely over, Joe got out of the
00:18:36.040 | military, he's 20 years old, his tour of duty is done, he comes back, he's got no
00:18:41.000 | money, he blew it all, what does he do?
00:18:42.560 | He goes gets a job, then he gets an apartment, and he gets some clothes to
00:18:46.240 | wear, then he gets transportation, then he works on improving his training.
00:18:50.200 | Maybe he'll go to school, get some certifications or get a
00:18:52.800 | diploma or something else.
00:18:54.280 | Those are all reasonable, reliable investments.
00:18:59.120 | But let's say our friend who is a successful advanced physician with a
00:19:06.040 | major specialty, earning a lot of money, has advanced training, has all the
00:19:11.760 | clothes he needs to perform neurosurgery.
00:19:14.640 | Does our physician benefit from going and buying another medical degree?
00:19:19.920 | You reach a point which you can't invest anymore in your education.
00:19:24.120 | You got to look at something else.
00:19:26.960 | So it's valuable for you to invest your time, invest in a way that's appropriate
00:19:33.160 | to your time and to your money.
00:19:34.480 | And you want to choose something that will help, that will profile your
00:19:41.800 | strengths.
00:19:42.560 | In investing, you always want to play to your strengths.
00:19:46.080 | One of my frustrations with mainstream investing is in the example I painted
00:19:55.600 | earlier, opening a Roth IRA, buying an index fund, you have no strength.
00:20:01.040 | You are one in hundreds of millions.
00:20:04.240 | You bring nothing to the table except a few thousand dollars.
00:20:08.640 | Doesn't mean you can't profit, just means you're not going to profit very much.
00:20:14.880 | There still are valid reasons to do that, but recognize you're not going to profit
00:20:21.480 | very much because you are one in hundreds of millions.
00:20:24.920 | Your $5,000 in a Roth IRA is not going to move the needle, and it's also not going
00:20:29.880 | to move the needle in your life.
00:20:31.320 | So you got 5,000 bucks.
00:20:34.160 | Great.
00:20:34.920 | How much can you earn on it?
00:20:37.400 | Let's say you weren't 10%.
00:20:39.560 | Wow, that's $500.
00:20:42.240 | Is your life going to be magically changed between $5,000 and $500?
00:20:48.680 | Sorry, $5,500 because you earned a 10% growth?
00:20:53.680 | It's not going to make a difference in the short term.
00:20:56.600 | Long term it will, but it's not going to make a difference in the short term.
00:20:59.120 | Now compare that $5,000 and let's say that you just use it going and trying to find
00:21:04.400 | and spend that on finding properties that you can flip to an investor for a bird dog
00:21:09.160 | fee.
00:21:09.520 | Let's say you get your fee of $5,000 per property.
00:21:12.240 | Oh, could you find five properties?
00:21:14.960 | You could.
00:21:15.920 | Now that you've got five properties, could you go ahead and invest in one mobile
00:21:20.000 | home that you double up?
00:21:20.960 | Yes.
00:21:22.520 | Those things take a lot of work, a lot of time, but because you're investing the
00:21:29.320 | time and the work, they can also be far more profitable.
00:21:32.240 | So the first two factors are time and money.
00:21:36.440 | How much time do you have to invest and how much money do you have to invest?
00:21:39.400 | If you've got a lot of money to invest, don't waste the opportunity by going and
00:21:47.240 | competing with people who don't have money.
00:21:50.920 | If you've got a million dollars of investable assets, that puts you in a much
00:21:55.480 | rarer class than the people who have 40 hours a week they can spend learning about
00:22:01.520 | something or studying something, et cetera.
00:22:03.120 | Factor number three is knowledge.
00:22:05.720 | You should consider your knowledge as it's applied to an investment opportunity.
00:22:12.800 | Do you have a unique knowledge of a market?
00:22:19.880 | Yes.
00:22:20.400 | Years ago, I knew a guy here in Palm Beach who I used to teach, or I used to drive a
00:22:28.000 | boat, teach as, I did teach, but I taught kids.
00:22:30.240 | I used to teach wakeboarding and water skiing.
00:22:32.080 | I'd drive a boat sometimes for some of our clients.
00:22:34.080 | And there was a guy who used to come out and ski with us.
00:22:37.840 | And he was just a real, really a great guy.
00:22:41.960 | His first name was Dick.
00:22:44.280 | And he would come out and trick ski when he was in town in Palm Beach for the
00:22:48.360 | summer.
00:22:49.000 | He'd come out and trick ski with us every day.
00:22:50.560 | Trick skiing is a really interesting form of skiing.
00:22:52.600 | Unlike their three major disciplines in skiing, there's slalom, trick skiing, and
00:22:58.040 | jumping in the kind of the traditional water ski world.
00:23:02.840 | And Dick used to really enjoy trick skiing.
00:23:05.200 | So he'd come out.
00:23:06.040 | And one of the things just so funny in trick skiing, you don't wear a life jacket
00:23:09.640 | usually, unlike all the other forms of skiing.
00:23:11.840 | He'd come out in his Speedo and his trick skis.
00:23:14.360 | And he was in his mid to late 80s.
00:23:16.240 | And he was in good shape.
00:23:17.440 | He would trick ski every day.
00:23:19.000 | He used to do this one trick in his late 80s, which I always admired him for.
00:23:23.600 | His closing trick was he would put the, take the ski rope, put it over around his
00:23:29.640 | head, around his neck, and then lean back on his skis, cross his arms across his
00:23:33.600 | chest and ski across the water.
00:23:35.040 | The way that you do this safely on a ski boat is you have an emergency release.
00:23:39.720 | And so you make sure the rope is on this emergency release.
00:23:42.200 | So you got to watch them like a hawk when they've got this, because if they fall,
00:23:46.200 | you got to release it.
00:23:47.000 | Otherwise they could be seriously, seriously hurt.
00:23:49.880 | So Dick was a great guy.
00:23:51.680 | He lives on Palm beach and pretty wealthy.
00:23:54.000 | And he wrote his autobiography and it just wasn't published or anything.
00:23:59.800 | He wrote it out for his family and friends.
00:24:01.280 | And he gave me a copy and I read it.
00:24:02.640 | And one thing that was so interesting was learning how he made his money.
00:24:06.560 | It was a Texas in the oil business.
00:24:09.560 | And he would go out and in the early years he was trying to find oil.
00:24:13.960 | So he was all over the Texas oil industry back and forth, searching for wells, et
00:24:19.160 | cetera, but he acquired a great deal of knowledge about the Texas oil business.
00:24:23.880 | This allowed him to effectively employ that knowledge into making good investments.
00:24:28.680 | He had no money when he started off, but he acquired knowledge by working in the
00:24:33.600 | industry and knowledge from traveling extensively, knowledge from inside
00:24:38.400 | connections in the industry.
00:24:40.240 | Then he started to borrow money from people who had money and invest that money for
00:24:45.000 | them.
00:24:45.280 | They were happy because they had the money, but no time and no knowledge.
00:24:49.880 | Dick on the other hand, didn't have any time, sorry, didn't have any money, but he
00:24:53.600 | had the time and the knowledge.
00:24:54.840 | And so he could invest other people's money profitably and it made him his
00:24:59.600 | fortune, the basis of his fortune.
00:25:01.280 | Knowledge is important.
00:25:06.520 | One of the most valuable things you can do is acquire specialized knowledge.
00:25:11.160 | And you often will find that this is in the context of your job or in the context
00:25:17.960 | of a business.
00:25:18.680 | The last three years doing podcasting, I've acquired and built a tremendous
00:25:23.920 | amount of knowledge around multiple new fields that I didn't have a few years
00:25:28.200 | ago, which means that I could now invest profitably in new fields.
00:25:34.720 | Now, some of those things I could have to do the work myself or work as a
00:25:38.400 | consultant, which are limited, but I've also acquired skills and knowledge,
00:25:42.600 | sorry, knowledge that can be applied and you can do the same thing.
00:25:46.000 | So back to Joe, Joe has a lot of time, not a lot of money and based upon the email,
00:25:55.600 | not much knowledge.
00:25:57.000 | So the best place to focus at this point is to buy knowledge.
00:26:04.000 | That's the best place to, sorry, that's a, that's a YouTube culture joke there.
00:26:09.040 | That's the best place to focus right now is to buy knowledge.
00:26:13.600 | How do you do that?
00:26:14.800 | You choose an area of interest and you become an expert.
00:26:17.000 | It takes time, not much money.
00:26:19.800 | You start reading, you start learning, you start exploring, you start talking and
00:26:24.440 | you build knowledge in a particular area.
00:26:28.400 | That brings me to point number four, skill.
00:26:31.440 | Again, one was time, two is money, three is knowledge, four is skill.
00:26:36.320 | You should consider your skill when it comes to your investment activities.
00:26:44.320 | This last weekend, I sold a dog crate that I found on Amazon.
00:26:53.520 | I sold a dog crate that I found on the side of the road.
00:26:59.280 | My wife and I like to go trash picking, curb diving on the side of the road.
00:27:03.000 | And I found this dog crate in a neighbor's trash pile and I hauled it home and I sold
00:27:08.760 | it on Craigslist for a hundred bucks.
00:27:12.080 | That's a pretty sweet profit.
00:27:14.440 | Got it for free, sold it on Craigslist for a hundred bucks.
00:27:19.360 | I'm convinced that I could make a full-time business, finding stuff in dumpsters and on
00:27:24.200 | the side of the road and flipping it on Craigslist and eBay, et cetera, for money.
00:27:29.360 | I could develop that skill.
00:27:32.640 | I haven't proven it, but I could develop it.
00:27:36.560 | I could dedicate the time.
00:27:39.360 | It doesn't take much money.
00:27:41.040 | I have all the basic tools of money.
00:27:42.960 | I have the knowledge of how it's done and I have the knowledge of some of the
00:27:46.120 | markets. I immediately knew when I saw this dog crate that it was worth a few
00:27:49.920 | hundred bucks and I could probably make a quick and easy hundred bucks.
00:27:52.640 | And I could build and acquire the skill.
00:27:55.480 | I know people who do this to great effect.
00:27:58.400 | But usually they have a real skill in working with their hands and fixing things up.
00:28:06.160 | It's one of the big benefits, whether it's fixing up washing machines and dryers, like
00:28:12.080 | I previously interviewed people here on Radical Personal Finance about.
00:28:15.800 | I know somebody who does this with lawnmowers.
00:28:17.480 | They'll go and they'll find weed eaters that don't run and lawnmowers that don't
00:28:21.000 | run and just a few little bits of work here and they'll fix them up and get them
00:28:27.160 | running and flip them for a couple hundred bucks.
00:28:29.320 | I know people that do this with cars, find old cars, can fix them up, flip them and
00:28:35.040 | make some money on them because they just find them, fix the things that are wrong,
00:28:37.880 | motorcycles, et cetera.
00:28:39.560 | These are skills.
00:28:40.520 | They have those physical skills.
00:28:42.360 | I'm quite confident I could have developed those skills.
00:28:46.280 | But those are not my skills that I want to develop.
00:28:48.560 | My skills that I want to develop are in a different area.
00:28:51.400 | The ability to communicate with you verbally right now is a skill.
00:28:55.080 | The ability to write is a skill.
00:28:57.320 | The ability to analyze something is a skill.
00:29:00.400 | My ability to create a taxonomy of investing here in the context of this show is a
00:29:06.160 | skill set.
00:29:06.880 | Not many people have that skill set.
00:29:10.800 | So you want to focus in an area where your unique skills are allowed to shine.
00:29:18.360 | The number of people who can make a business, finding things on the side of the
00:29:23.520 | road or fixing up old lawnmowers and flipping them is very large.
00:29:28.920 | The number of people who can do what I do is much smaller.
00:29:33.720 | So I always try to focus on the areas where I have skill.
00:29:40.320 | Skills have to be acquired and honed.
00:29:44.120 | Some of them, I believe, are late.
00:29:46.920 | You know, they may be latent.
00:29:48.280 | Some of them are kind of built in, but a lot of them are developed and honed with
00:29:52.520 | practice.
00:29:53.240 | But you can develop skills.
00:29:57.440 | There's a lot of money to be made in flipping computers that you find.
00:30:03.000 | Find or build cheap ones or build custom ones, et cetera.
00:30:07.760 | Takes some time, probably not much money, a lot of knowledge, a lot of skill.
00:30:13.760 | So if Joe came out of the Navy and had a lot of time, a little bit of money,
00:30:19.800 | knowledge and skill in computers, he could make a business on this.
00:30:23.360 | And it's a legitimate investment.
00:30:26.280 | But as time were to go on, as investment activities were to change and he were to
00:30:34.560 | mature as an investor, he would probably find it necessary to change his
00:30:38.960 | investment strategy.
00:30:39.960 | It may be possible to invest a few thousand dollars into computers and to flip
00:30:44.840 | them profitably.
00:30:45.760 | I don't know how to invest a hundred thousand dollars in computers and flip
00:30:51.920 | them profitably.
00:30:52.760 | So these four variables, I'm convinced, are very, very important.
00:30:58.120 | And if you start thinking about them and looking at opportunities around you, use
00:31:02.960 | these four variables as a matrix.
00:31:06.400 | Time, money, knowledge and skill.
00:31:09.200 | And try to find opportunities near you that are close by that lead to, well, give
00:31:19.440 | you options and that would give you a good investment opportunity.
00:31:22.760 | I do have four more, and I don't claim that this list of eight is exhaustive.
00:31:27.040 | In fact, if you've got additional factors, I ask you to give them to me.
00:31:31.880 | I think those first four are the most important, but these additional four are
00:31:34.800 | also important.
00:31:35.680 | Number five is temperament.
00:31:37.440 | Am I well suited for this particular activity?
00:31:41.400 | I, Joshua, I am not well suited for an activity of fixing up lawnmowers.
00:31:48.560 | I don't enjoy the work.
00:31:50.240 | I would be bored stilly.
00:31:51.520 | I don't see the challenge in it.
00:31:53.120 | It doesn't appeal to me.
00:31:54.360 | It doesn't match my temperament.
00:31:55.960 | I can't think of how, like you would max me out on that money and on the
00:32:00.960 | investment opportunity, and I'd rather just go take a job that interests me and
00:32:04.960 | put all my money in the stock market.
00:32:06.240 | It doesn't fit my temperament.
00:32:07.360 | That's different than other people.
00:32:09.760 | Some people, it really does fit their temperament.
00:32:12.360 | Some people have the temperament where they like excitement or they like a
00:32:17.360 | challenge.
00:32:18.120 | Some people's version of real estate investing involves them traveling the
00:32:24.160 | world, putting together global deals with financing from here and permissions from
00:32:28.920 | there, et cetera.
00:32:30.760 | That's their temperament.
00:32:31.760 | Some people's temperament with real estate investing involves them buying the
00:32:36.600 | house next door, fixing it up and renting it out to a young family.
00:32:40.640 | That's their temperament.
00:32:42.240 | Time, money, knowledge, and skill play a factor, but you know what?
00:32:46.000 | If you're real focus, if you don't have any money, you have time and you have
00:32:51.200 | knowledge and skill and real estate, but your temperament is well suited to going
00:32:55.480 | and doing that multinational deal-making, don't buy the house next door.
00:33:01.360 | Go do the multinational deal-making.
00:33:03.400 | You find somebody to work for, you work for them for possibly a base salary, or
00:33:10.080 | you work for them for a cut or for a commission, and you can go and develop
00:33:13.400 | that skill using your temperament of putting the deal together, and you just
00:33:17.120 | work on commission.
00:33:17.880 | You don't have to have the money.
00:33:19.000 | Is that a good investment?
00:33:20.320 | Absolutely.
00:33:21.080 | It's a good investment.
00:33:22.000 | It's a great investment.
00:33:23.760 | Some people's temperament suits them to reading annual reports for publicly
00:33:30.520 | traded companies.
00:33:31.560 | They love to do that.
00:33:33.480 | In that case, there may be opportunities in the broad-based publicly traded
00:33:39.920 | capital markets for them to invest in.
00:33:42.080 | Some people really enjoy watching stock indicators and following the markets on
00:33:47.800 | a regular basis and following prices and movements and things like that.
00:33:52.440 | If you wonder why I don't dig into more of that on radical personal finance is
00:33:57.080 | because it doesn't match my temperament.
00:33:59.080 | I'm not interested in it particularly.
00:34:01.760 | I don't want to trade stocks.
00:34:03.360 | I don't want to sit there in front of my computer.
00:34:05.000 | I don't even want to read annual reports, at least not on publicly traded
00:34:10.400 | companies, many, many of them to really understand and follow these companies
00:34:13.600 | over time to work as a value investor.
00:34:15.320 | I don't want to, that doesn't fit my temperament.
00:34:17.920 | My temperament is very different.
00:34:21.080 | So I know what I would do, what I do with my temperament,
00:34:24.960 | but you've got to study yours.
00:34:26.440 | Some people say, I don't want to be a landlord.
00:34:28.880 | Well, the fact that you do or don't want to be a landlord isn't necessarily an
00:34:34.040 | indication of whether you should or shouldn't invest in real estate.
00:34:36.960 | I've been giving you lots of real estate examples.
00:34:39.120 | I like to use real estate because we, most of us get it.
00:34:41.680 | We see it, we live in it, we rent it, we own it.
00:34:45.040 | We dad and mom owns it.
00:34:46.840 | Our brother and sister-in-law have been foreclosed on.
00:34:49.520 | Like we've, we've known real estate investors.
00:34:51.680 | So I like to use real estate examples.
00:34:53.720 | That's why I use so many for you.
00:34:55.560 | Don't, don't think that there aren't about a gazillion other opportunities.
00:34:59.440 | But some people's temperament is not well suited to being a landlord.
00:35:03.040 | That's fine.
00:35:04.600 | There are lots of ways that you can invest in real estate that aren't
00:35:08.520 | related to being a landlord.
00:35:09.920 | Some people's temperament doesn't fit big risk.
00:35:15.240 | Well, you got to find a way that allows you to invest that
00:35:18.680 | doesn't ruffle your risk feathers.
00:35:20.840 | Next factor is timing.
00:35:23.640 | Timing matters.
00:35:25.320 | If you have the wrong idea, sorry, if you have the right investment idea, but
00:35:33.240 | you employ it at the wrong time, your investment idea won't work.
00:35:38.280 | Now the right time will depend on the market.
00:35:44.360 | The right time will depend on the product.
00:35:45.960 | The right time will depend on, on a bazillion factors, but you've got to be
00:35:50.160 | investing at the right time and you've got to look around and sometimes you may
00:35:53.360 | have a great idea, it's just the wrong time.
00:35:56.360 | But you might also look and say, ah, I see an opportunity that
00:36:02.000 | will work now at this time.
00:36:03.760 | We'll go after those.
00:36:06.280 | Try to match those things up.
00:36:09.000 | I have a love hate relationship with the phrase, you can't time the market.
00:36:14.480 | That's a phrase that comes out of the broad-based larger stock market.
00:36:18.000 | And we say, you can't time the market.
00:36:19.920 | You can't time the market.
00:36:21.120 | Well, I have no problem with that statement for most of us when it comes to
00:36:25.040 | stocks and to the broad-based large US stock market, I do have a problem with
00:36:32.320 | that when it comes to the markets that you know, because you can time your market.
00:36:40.760 | What happens in many market changes is the information is there.
00:36:48.320 | The evidence is available, but most people don't proactively change anything.
00:36:56.800 | Most people don't change until circumstances force them to change.
00:37:02.080 | It just seems to be a common trait of human beings.
00:37:06.360 | We don't change until circumstances force us to change.
00:37:09.960 | So you can see something that's going to provoke change and you can time your
00:37:17.040 | market, just because you see something doesn't mean that everybody else does.
00:37:23.560 | A lot of times people are just unwilling to make a change.
00:37:28.160 | They're unwilling to change their routine in order to take advantage of something.
00:37:32.440 | Many people who get laid off from their job knew that there were
00:37:38.240 | problems for their industry.
00:37:40.720 | You think, well, if you knew there were problems coming for your industry, why
00:37:43.920 | didn't you leave the industry?
00:37:45.240 | Why didn't you get out a year ago or two years ago?
00:37:47.720 | Most people don't want to change.
00:37:51.000 | So you can time your investment opportunities and timing is going
00:37:55.960 | to make a big, big difference.
00:37:57.800 | If you're looking at a market, you're looking at a sector, you've done your
00:38:01.960 | homework and you see you have an opportunity with timing, go after it.
00:38:09.200 | On the flip side, if you have a great idea, but you don't see the time, that
00:38:13.440 | investment is not going to work out.
00:38:14.960 | You need to figure out a way to wait for an appropriate time.
00:38:18.840 | Sometimes you take all your money out and you pour it into building a big
00:38:25.880 | commercial building because you're going to sell it.
00:38:27.720 | Sometimes you look around and say, I'm just going to pay some option.
00:38:32.520 | I'm going to lease option this land and I'm just going to pay my option fees and
00:38:36.440 | wait for the next business cycle, wait five years, wait for that road over there
00:38:40.320 | to get built, wait for this neighborhood to come up.
00:38:42.800 | Sometimes you bide your time and you don't put any money into it except for
00:38:45.480 | the option price.
00:38:46.440 | Factor number seven, opportunity.
00:38:49.640 | What opportunities do you actually have?
00:38:55.240 | I have family that's in the farming business and one of my family members,
00:39:02.680 | young person, had tremendous opportunity at an early age to start investing their
00:39:09.080 | money into agriculture.
00:39:10.960 | The way this starts is in your late teens, if you grow up in a farming community,
00:39:15.000 | then you can go and you can lease some land, whether you lease or rent a section
00:39:19.920 | of land and you start growing your own crops.
00:39:21.640 | Well, you need some money to put up, but you have the ability to invest a few
00:39:25.120 | thousand dollars that you've saved by working for somebody else.
00:39:28.120 | And you have the ability to rent your dad's tractors, use the farm equipment,
00:39:33.160 | et cetera, and to profit from your own farming activities.
00:39:36.440 | This is common in agriculture.
00:39:37.920 | So my family member did that.
00:39:40.040 | That's an opportunity that I don't have.
00:39:42.520 | I don't have around me thousands of acres of farmland where I can just go and rent
00:39:47.280 | a section to plant corn on.
00:39:49.120 | My dad doesn't have a barn full of tractors that I can borrow and rent from
00:39:54.880 | him in order to work with.
00:39:56.320 | I don't have the opportunity for that knowledge to be able to apply.
00:40:02.440 | I don't have the opportunity.
00:40:04.040 | It just doesn't exist for me.
00:40:05.360 | So I'm not approaching that and calculating how much money I can earn from
00:40:13.560 | growing corn because that opportunity just does not exist for me.
00:40:18.200 | But for my family member, for whom it does exist, that is a great investment.
00:40:26.000 | And it's far better for them to take $5,000 and buy seed and put gasoline in
00:40:31.040 | the tractor and diesel in the tractor, sorry, put fuel in the tractor and pay the
00:40:37.120 | rental fees and buy the crop insurance and everything.
00:40:39.480 | That's going to have a much better opportunity and be a much better
00:40:43.240 | investment than is putting money in the stock market just like everyone else.
00:40:49.360 | There's no point of differentiation.
00:40:51.200 | There's no unique opportunity.
00:40:54.360 | So look around and see the opportunity that you have.
00:40:56.800 | When I was a financial advisor, I met with a person who was a college
00:41:00.080 | professor and this college professor was a computer science professor.
00:41:06.200 | And I was talking to him about investments, trying to get him interested
00:41:10.560 | in my investment opportunities and my mutual funds and things that I had for sale.
00:41:18.000 | And so we were talking about what he invested his money in.
00:41:20.920 | He said, "I'm sorry.
00:41:21.720 | I invest all of my money back home."
00:41:24.040 | Well, he was from, I forget which specific, it may have been the Congo,
00:41:27.880 | but from a small country in Africa, not one of the more prominent ones like
00:41:34.000 | South Africa, but one of the Central African countries, and he was investing
00:41:40.800 | all of his investment dollars into internet cafes back home.
00:41:45.440 | And he had the opportunity to invest there.
00:41:49.040 | He had the local network of people where he had people who could keep an eye on
00:41:53.040 | his investment. He had the technical knowledge to put together an internet
00:41:57.400 | cafe and make the connections to be able to purchase the computers and get them
00:42:01.680 | set up, et cetera.
00:42:02.680 | And he had the money to do it, the knowledge, the skill, the temperament
00:42:08.120 | worked for him because he's working in a cultural context that he understood.
00:42:13.000 | The timing was good.
00:42:14.360 | Cafes were a good business at that opportunity and he had the opportunity.
00:42:17.400 | I don't have that same opportunity.
00:42:20.280 | It would take years to build the connections of people that I could trust to
00:42:23.360 | work around a business like that.
00:42:24.720 | But he had that opportunity.
00:42:26.680 | You might have an opportunity like that as well.
00:42:29.760 | So don't neglect the opportunities that are right in front of you.
00:42:34.840 | Subway shops are a great business.
00:42:38.280 | They don't cost that much to open.
00:42:41.280 | You can build a fortune on the back of a sandwich shop.
00:42:47.480 | If you have an opportunity like that and it fits your temperament and you see an
00:42:51.040 | opportunity, you see an investment idea, then it fits the timing and you can build
00:42:56.000 | the knowledge and the skills and you've got the time and the money, et cetera,
00:42:59.000 | that may fit you and you're going to have a unique and competitive advantage there
00:43:03.760 | that other people don't have.
00:43:05.880 | I enjoy watching the empires that certain savvy business people, certain athletes
00:43:13.080 | put together when they change from athlete to business owner.
00:43:17.680 | Shaquille O'Neal is fascinating to me.
00:43:20.640 | Very, very smart man.
00:43:22.280 | Well, he has had an opportunity to leverage his brand and this is the way it
00:43:27.720 | works in athletes.
00:43:28.400 | If you're an athlete and a well-known athlete, you have the opportunity to
00:43:33.320 | leverage your brand.
00:43:34.440 | So you leverage that brand for publicity that brings money in and then you leverage
00:43:39.240 | that publicity for all of your other businesses.
00:43:42.640 | I don't have Shaquille O'Neal's investment opportunities.
00:43:45.280 | Mine are different and yours are different.
00:43:48.960 | Finally, factor number eight is tools.
00:43:51.520 | And with this, we're done.
00:43:52.520 | What tools are necessary for your potential investment opportunity?
00:43:59.560 | If I were a high school student, I'd probably have a side business fixing
00:44:04.520 | people's broken iPhone and Android screens.
00:44:07.360 | I do it on the cheap and do it on the side.
00:44:09.800 | Well, you got to have a little screen tool and little screwdriver, et cetera.
00:44:13.240 | And you got to have the ability to get online and buy a fresh screen and
00:44:16.000 | swap it out for people.
00:44:17.040 | But I can start a little business like that.
00:44:19.440 | Just got to get the tools, a little bit of knowledge, a little bit of skills,
00:44:22.600 | not much money, not much time might fit the temperament of certain people.
00:44:26.800 | Timing is good.
00:44:28.400 | Opportunity exists.
00:44:30.400 | I have a broad stream of potential clients.
00:44:33.680 | I just need a few tools.
00:44:34.840 | What tools do you have that other people don't have?
00:44:38.320 | I'm a physically large man.
00:44:40.000 | It's smarter for me to move in the direction of personal security and use
00:44:48.840 | my size as an advantage than it is for me to move in the direction of horse
00:44:53.000 | jockeying, kind of crossing the barrier here with opportunity and tools.
00:44:58.000 | But what tools do you have?
00:44:59.560 | You will have unique tools that you have or that you can acquire that other
00:45:05.400 | people don't have or can't acquire.
00:45:07.880 | So recognize those things and search them through.
00:45:11.160 | Having a great internet connection is a valuable tool.
00:45:15.360 | It sets things apart.
00:45:18.400 | Not having an internet connection on the other hand, you might also be able to
00:45:23.360 | figure out a way to turn that into a valuable tool.
00:45:25.480 | I think these factors, number one, time, two, money, three, knowledge, four,
00:45:31.440 | skill, five, temperament, six, timing, seven, opportunity, and eight tools.
00:45:36.400 | These factors are important in your investment activities.
00:45:40.880 | And I think that if you'll pursue them and consider them and filter your
00:45:45.360 | investment, desired investments through them, you'll have an opportunity for
00:45:50.040 | success, but you got to recognize this.
00:45:52.800 | Nobody else can do this for you and nobody else can answer the question
00:46:00.520 | of what you should invest in because they don't have the information about how
00:46:06.280 | much time you have available, about your money, about your knowledge and skill
00:46:10.160 | and temperament and timing and the timing of the market and the opportunities
00:46:13.080 | that you actually have in the tools.
00:46:14.560 | You can't answer that question.
00:46:18.080 | I find this to be frustrating all the time.
00:46:21.360 | I recommend investment ideas to other people all the time.
00:46:24.480 | Nobody takes me up on them.
00:46:28.480 | Now, most of the time, I think people don't take me up on them
00:46:31.360 | because people don't really care.
00:46:32.520 | Most people don't want to be rich.
00:46:33.760 | Most people won't want to do any hard work.
00:46:35.600 | Most people don't want to actually pursue it.
00:46:38.080 | It's hard to get rich.
00:46:39.400 | It takes a lot of work, but sometimes they just don't want to pursue them because
00:46:44.800 | my suggestion wasn't right for them.
00:46:47.240 | It doesn't fit something.
00:46:49.720 | I don't know any way that you can outsource this, but I do know if you'll
00:46:55.480 | start looking around you, start thinking, take an interest in the things that you
00:47:01.280 | see, take an interest in the people that you see, things will start to
00:47:05.440 | shake out and you'll see them.
00:47:07.680 | It's important to remember when it comes to investing, saving
00:47:12.720 | money is not a waste of time.
00:47:14.680 | Don't ever fall prey to the idea that you're losing money just because you
00:47:23.240 | don't have a savings account.
00:47:25.400 | Just because it's sitting on a savings account.
00:47:27.360 | Yes, you do need to consider the corrosive effect of inflation.
00:47:32.440 | I hate it.
00:47:33.280 | I hate inflation.
00:47:35.760 | I think it's, but in the short term, even a few years, it's not going to be that big a deal.
00:47:46.640 | Over the course of a few years, you can look around, you can study, you
00:47:53.120 | can find the things that will work for you.
00:47:55.320 | In that context, it'll be helpful to you to have more money.
00:48:02.960 | More money is almost always a benefit.
00:48:05.440 | I don't know how to solve Warren Buffett's problem, what to do with his
00:48:08.800 | hundred billion dollars, but I do know this.
00:48:11.120 | You'll figure it out.
00:48:12.680 | And it's not such a bad problem to have.
00:48:14.760 | It's one of the worst problems.
00:48:16.000 | I'm sorry, one of the better problems on the scale of problems to have.
00:48:21.280 | The perfect investment for you is going to be one that uniquely fits your unique
00:48:31.280 | variables.
00:48:32.240 | When you're playing in the space that you're uniquely qualified, you're not
00:48:38.760 | going to have a ton of competition and you're going to do fine.
00:48:41.360 | I just closed with just a final example.
00:48:44.000 | You're listening to Radical Personal Finance.
00:48:45.640 | I'll just point out how in some of my decisions, this is what I have applied to
00:48:51.000 | me.
00:48:51.360 | Now, in the context of Radical Personal Finance, I like to use it as an example
00:48:56.040 | because some of my approach has been haphazard.
00:48:59.720 | Some of it has been very calculated.
00:49:01.360 | But let me show you how these eight things lead to Radical Personal Finance
00:49:06.120 | having been and being a unique opportunity for me, a unique investment.
00:49:10.200 | I have other business opportunities as well, but Radical Personal Finance is the
00:49:14.920 | core of what I'm doing right now.
00:49:16.480 | Number one, time.
00:49:17.560 | I have the benefit being and I figured out a way to set things up that I could use
00:49:25.160 | the time available to me to create something like Radical Personal Finance.
00:49:29.560 | And due to some of the decisions that I've made and the things that I have
00:49:33.960 | planned, I have been able to devote a lot of time to this endeavor.
00:49:38.360 | Other people who are in this space don't have as much time.
00:49:42.200 | I did.
00:49:45.200 | I had a lot of time, didn't have a lot of money available to invest when I
00:49:49.640 | started.
00:49:50.160 | So I chose something that didn't require a significant investment of money.
00:49:55.120 | I chose something that had a low financial cost of entry because all my money was
00:50:00.360 | tied up in dumb things I'd done in the past.
00:50:02.520 | I was changed, but that was the situation I was facing.
00:50:06.640 | So I chose an opportunity that fit more time, less money.
00:50:10.480 | Number three, knowledge.
00:50:13.640 | I had a tremendous head start on other people with my knowledge specific to the
00:50:19.720 | topics of finance, financial planning, et cetera.
00:50:22.160 | So my moat of safety in this particular business investment is significant.
00:50:28.440 | Other people know more than me, certainly, but it would take somebody who's brand
00:50:34.000 | new quite a long time to study enough to beat me in terms of knowledge.
00:50:40.080 | So now I've lined up time, money, and knowledge.
00:50:43.080 | Well, what about skill?
00:50:44.120 | Well, again, I had a good head start in terms of skill.
00:50:47.200 | I had unique skills and unique personal attributes that fit what I was doing.
00:50:54.360 | Number five, temperament.
00:50:57.560 | Doing this fits my temperament.
00:50:59.720 | Now there are a couple of mistakes I've made, I've realized, and I'll be changing
00:51:03.000 | even the format of the show again going forward in the future because I got to fit
00:51:07.040 | my temperament.
00:51:07.720 | I got to fit what's going to work for me.
00:51:11.440 | But this fits my temperament.
00:51:13.480 | It deals in the world of ideas, deals in the world of classification, deals in the
00:51:17.640 | world of analytics and analysis.
00:51:19.400 | But it doesn't cause me problems of trying to do stock analysis every day, which
00:51:24.600 | would drive me nuts.
00:51:25.440 | Timing.
00:51:26.800 | There was a timing in the marketplace that I was seeing, still see, and have
00:51:31.360 | watched very carefully to try to strike at the right time when the concepts were
00:51:35.560 | proven out, and yet the market was not saturated.
00:51:39.680 | It would be much more difficult for me to do today what I did three years ago.
00:51:42.840 | I watched the timing and I made the decisions based upon the timing.
00:51:46.440 | Number seven, opportunity.
00:51:48.320 | I had the opportunity available to me.
00:51:50.440 | I could see it.
00:51:51.480 | Other people couldn't see it.
00:51:53.240 | Almost nobody could see it.
00:51:55.240 | I could see it.
00:51:56.080 | And the tools, not a huge factor on the tools, but something as simple as having
00:52:01.600 | a stable internet connection was important for me and I had that ability.
00:52:05.880 | Something as simple as having the ability to sit at a desk for extended periods of
00:52:10.240 | time and work and not traveling constantly, or all of these are valuable tools.
00:52:16.160 | So when you start to apply these, you may not see them in advance.
00:52:21.320 | I didn't see all that three years ago.
00:52:23.040 | I saw some of it, but I didn't see all of it.
00:52:25.520 | But today I can analyze what I'm doing, why I'm doing it, and I can see the
00:52:30.680 | tight fitting connection to me.
00:52:33.280 | And now this is the framework that I use to apply to other opportunities.
00:52:37.360 | I have other investment opportunities that come along or other business ideas, etc.
00:52:41.640 | I'm looking at them and saying, how does this work with regard to the time, the
00:52:45.120 | money, the knowledge, the skill, my temperament, the timing in the marketplace,
00:52:49.080 | the opportunities that I actually have, and the tools that I have available.
00:52:55.080 | So Joe, I can't do it for you, but I can promise you saving money is a good idea.
00:53:02.600 | Paying out of debt is a great idea.
00:53:04.200 | Not having any fixed obligations is a great idea.
00:53:07.120 | Now, get busy studying, learning, talking, reading, listening,
00:53:16.040 | searching for opportunities.
00:53:19.400 | Don't be in a hurry.
00:53:21.400 | There are plenty of investment opportunities out there.
00:53:24.880 | No matter where you live, no matter when you live, there are plenty
00:53:28.520 | of investment opportunities.
00:53:31.360 | But don't let the fear of action keep you out.
00:53:33.360 | Don't know what it is for you, but I do know that that is how I
00:53:39.440 | would tell you to invest your money.
00:53:41.000 | This show is part of the Radical Life Media network of podcasts and resources.
00:53:47.920 | Find out more at RadicalLifeMedia.com.