Hello everybody, it's Sam from Financial Samurai and in this episode I want to talk about a couple things One the ultimate source of financial security your strong mind and two never to confuse Brains with a bull market. I remember back in college interviewing for this Anderson consulting guy The consulting companies were the most coveted jobs out of the College of William and Mary And I got rejected from all of them and the guy was clearly not impressed with me Because I was telling him about my interest in investing in the stock market and so forth and he said sam Don't confuse brains with a bull market Bulls make money bears make money pigs get slaughtered.

So that was the end of the interview and I was like, well, okay I guess i'm not getting a job at enter consulting which ended up going bust And the story really reminds me of right now. I mean investors are making money hand over fist We're coming up with investment ideas and they're actually working For example the lifetime group stock idea about health and fitness gym stocks being the last reopening trade It's done.

Well It's done well along with planet fitness and a bunch of other old school fitness companies And now i'm thinking to myself man. Am I an investing genius? I wrote out a thesis I recorded a podcast about health and fitness stocks and now the stock is up 25 percent in One or two weeks man.

Maybe I should go get a job as a money manager And then again, I think to myself well don't confuse brains with a bull market It's impossible to consistently outperform the market The ideas you think are because of your connecting the dots Might just be because the overall market has a tremendous amount of liquidity And things just go up because money is trying to find More profitable investments in a low interest rate environment.

So if you're starting to feel a little giddy a little Overconfident that you're just such a great trader Just start looking back at history Look back to the dot-com bubble in 2000 when the nasdaq Basically imploded by about 65 over the course of two years the sp500 Imploded by about 40 something percent over the course of two years Then of course the global financial crisis in 2008 and 9 and it wasn't until about 2012 When stocks regained their pre-crisis highs and then started marching upwards.

So if you've only been investing since about 2009 You've only seen really good good good times. There's only one year I think it was 2018 where the markets were down about five or six percent Which is not that big of a deal after such a tremendous increase So really be careful about thinking that you can outperform the market consistently over the long term Because you probably can't and if you look at the data over the past 10 years institutional fund managers In other words people who are financial analysts and money managers Who do this for a living?

They most of them for the equity side haven't been able to outperform their respective indices So about 80 percent have not outperformed their respective indices. So those are bad odds So for you and me to think that we can outperform when you know, we've got young kids to raise at home We've got other types of jobs other types of interests.

We don't spend, you know all day watching the markets listening to earnings conference calls Watching the federal reserve talk about interest rates and bond tapering and so forth. It's going to be really hard I think we can get lucky for you know, several years several positions But long-term sustainability is very very difficult and you might be wondering what am I going to do with my lifetime fitness investment?

I invested about thirty thousand dollars in it and twenty thousand dollars in another company called metafast. I'm just gonna ride it I'm gonna ride it because I think the trend is our friend through the first half of 2022 I think we're gonna see the biggest year of people trying to get back in shape Live a yellow lifestyle spend their money.

I think it's going to be great 2022 So i'm just going to ride the momentum and see what happens and this investment And investing in general brings me to my other point a main point and that is the desire for financial security When we are investing and saving and working hard We ultimately desire financial security so we don't have to think about money so much I mean thinking about whether we made the right investment whether you're going to get laid off during the next round of layoffs Whether we chose the right partner because they've got terrible credit score and they just spend while you're the saver You know These are all things that uh hurt financial security that messes with your mind and it just kind of keeps you a little bit anxious and in a positive way this anxiety is good for you because it is the Counterbalancing mechanism for you to not slack off so much to not Spend all your money you need some of that stress and anxiety to keep you focused Especially if you're a parent, you know, if you're a parent the stakes go up You're not only taking care of yourself and your spouse and your partner Hopefully but your children and your children are the most precious assets in the world and you would do anything To love and care for and protect your children and I believe most of us are irrational over the long term So if you desire money, you're going to save more money and if you've had hardships growing up You're probably going to save more money and I do believe your upbringing does help determine Your outlook on money how you view money.

Is it a healthy relationship? Or is it an unhealthy relationship? And so when I talked about perpetual failure in a previous post As the reason why I continue to save and invest over 50 percent of any investment income and online income I make It's because growing up. I saw a lot of poverty in malaysia in china and in india And it really kind of affected the way I saw life and when I was working at mcdonald's for four dollars an hour and constantly Getting yelled at by the overzealous manager.

I just remember thinking myself. There's no way I want to be stuck Slaving away in front of a hot stove for six hours a day Making four dollars an hour. I mean, that's that's terrible. I mean it brings and builds character And it makes you appreciate what you have but over the long term.

It's a really tough way to live So i've come to realize that it really is your strong mind Your investing acumen Your knowledge your education that really is going to provide you some type of financial security Just think about a scenario where you lose 90 of your net worth You also lose your job.

Thanks to a recession and then for good measure You also break your leg, which you require to do your job Are you screwed? Well, most people would say yes But are you really are you really when I used to play a lot of texas no limit hold'em There would be a time where i'd get some bad beats, right?

So bad beats are when you're favored your odds are favored to win But your opponent spikes something on the river and takes all your money And it was really disheartening However, I would always tell myself a chip and a chair is all I need to come back And that's a common saying in the poker world.

You can run bad, but a chip and a chair That's all you need and you can fight your way back If all goes to hell we still have our minds Our mind is our last resource of financial security because we can always find ways to make money And with this type of attitude, I sometimes did come back and I think you've got to believe That your mind will help you in the darkest of hours And so I thought about what would I do if I lost a lot of my net worth?

And I had to take care of my family Well, I think the number one thing I would do would be to try to think about investment ideas that could help pay for Our living expenses, of course, I would go through my budget cut costs and find ways to make more money through active income But I would look for investment ideas like LTH the lifetime fitness group, which now is enough To pay for a month's worth of living expenses But the reality is I know it's not sustainable So in addition to all of us trying to build a strong investing mind I think it's probably more important to develop an Entrepreneurial mind really good entrepreneurial acumen So in other words when you've lost your job and your net worth is down in the dumps Will you have the entrepreneurial mind to make money on your own?

This is super important with entrepreneurship. There's a much stronger correlation with effort and reward For example here in the personal finance world. There are plenty of writers and podcasters who have no financial background And you would think well, how is that possible that they can grow and make money online?

It's possible because they have a very strong entrepreneurial mind They know how to market. They know how to grow a brand. They know how to convince the search engines. They've got great product And that is just the way it is That's capitalism and that is a wild wild west open forum where anybody can compete.

That's the beauty of technology on the internet Now with good investing acumen the correlation with investing success is not as strong You might know all there is to know about analyzing a cash flow statement However, if you can't properly predict what other people are thinking after the results Well, you can still lose so be very careful about getting lulled into only making money from a day job Your day job is like a warm cocoon Paying you the benefits paying you a nice salary every two weeks.

It's great I remember that time and it just lulls you into a little bit of complacency where you're not Bothering to try to make more money outside of work But I really think you should try you should try because there's nothing better than making a dollar With your own creativity and hard work.

It's really interesting compared to making a dollar For a company it's just night and day. I think the value That you get out of making your own dollar is like I don't know five times more five times greater because if you didn't do anything nothing would happen But at your day job if you decide to slack off, you know half the day or the whole week You're still going to get paid and the company's probably still going to make money.

So once you have that confidence To make your own money You're going to feel a lot more financially secure and to build a strong financial mind It just takes practice and it takes studying listening to podcasts reading articles watching videos You will learn and the more you learn the more confident you will feel and better yet The greater the ability for you to make money by taking action and you can tell who has a weak mind Just spend any amount of time on social media twitter in particular If you have a weak mind you tend to get agitated more easily You start getting into useless online arguments because someone doesn't believe the way you believe you try to convince them Otherwise when there's no amount of effort you can put in to convince someone otherwise But if you have a strong mind, you're more open to seeing the other side There is no way of knowing everything you've got to be humble when it comes to investing And when it comes to trying to build your wealth because there will be landmines that you will step on That you will have no idea about you will have not seen them Therefore the logical thing to do is learn from others who've experienced what you might one day experience In other words a strong mind is also an open mind So let's keep on learning and sharing our experiences Even if whatever I write or say doesn't fully agree with you.

Just think maybe I have a perspective that you do not have and embrace that and i'm going to do the same Whenever I read something that's critical a little bit nasty or just totally out in left field I like to think well, maybe they have a point i'm missing Even if you receive tough love embrace it so you can try and get stronger It's nice to know that if all else fails we can always fight our way back And that is I think the secret to feeling more financially secure Thanks so much everyone for listening.

If you enjoyed this episode, I'd love a positive review Shout out to Stephen M Bamma trader JT for leaving those five-star reviews. I really appreciate it helps keep us going and it helps make things fun I'm going to continue to do some writing and some recording on reflecting on this year and over the past 520 years I think it's good to reflect folks and to really try to appreciate how far we've come and what we have Also, i'll be finishing up the first Draft of the finished manuscript of my book this month And by the end of the year, it should be all tidied and squared away And the book is going to come out june 2022 And it's going to be about making better decisions with some of life's most important decisions So i'm excited to share the book with you guys And have you guys read it share it like it and so forth.

Take care everyone. Talk to you later