Making money from your money is both art and science, and almost impossible for most people to master. I don’t advise using financial advisors (waste of money), but you should learn as much as you can. You might want to investigate the Bogle method for starters. Its basics are easy for new investors.
I love the Bogle methods but when you factor in inflation and currency devaluation the returns aren't what people think. 7% returns on average from an index fund is nice but if the currency is eroding at more than 7% then you're losing. And that's before taxes.
Agree. But, would you advise novice investors to build a portfolio of their own? That’s why I suggested Bogle to start and learn. Investing is very scary for many people.
It's hard to say what I'd advise. The truth is index funds after currency devaluation and taxes mostly have a negative return. None of the gurus mention that.
The real inflation number is much higher than what's reported. So if you can't beat inflation and you're measuring investment gains in a currency that is weakening every second, you're thinking you're making money when you're not. And that's exactly what the government wants you to think.
"There’s only so long you can lounge on the beach with bottomless cocktails before you get bored and wonder what everyone else is doing at 10 AM on a Monday." - so, so true. Last year I was lucky to have an extended period of time where I didn't need to work or earn, and it taught me a very profound lesson: that time is only valuable if we have something meaningful to spend it on.
Now I'm doing the most meaningful and creative thing I have ever done - I'm writing! I'm here on Substack and freelance write for various business, startup and career publications. I also consult for startups in Strategy & Ops which keeps my finger on the pulse. But writing about career, business and personal development is where my heart is 💖
My wife and I were middle managers at fortune 500 companies. We both enjoyed our careers, but once we made enough money we both retired early. We have been out of work for 5 and 6 years and have no desire to ever work again. There are so many activities and things to do, people to meet, places to see, things to learn. I wish we were not so conservative and retired 5 years earlier. Having no money worries and no time commitments is true bliss.
Tim, no. I have enough money and to many interests to devote the time and effort to a business. I had several opportunities since I retired, but I know how hard it is to get a company going and then once you succeed, the scaling up to the next level is another major commitment of time and energy. I ran small business units within a large organization for a while. Had my own my own p&l. It was fun and challenging, glad I did it, but not now.
Consistently good advice. On investing, I'd recommend reading Peter Lynch. I've used his approach over the years, buying companies whose businesses I understood and whose products I loved. Apple is a great example. Against my investment advisor's repeated resistance, I bought 1000 shares of Apple in 2004. And I hired a new advisor. On the value of F U money, you are dead on. Once you have it, you continue to work, but only on what lights you up. On the other hand, what got you your F U money was probably work that excited you, like building your own company and selling it.
Have stuff to do yet tonight but couldn’t put this down. Best investment is investing in yourself. I’ve never wanted to retire but I love the idea of having the freedom to do what I want. Keep fighting the fight Tim !
As a former financial advisor, loved this article Tim! Especially number 2. Taking zero risks won’t lead to financial freedom. But calculated risks can. Always enjoy your take on money. Cheers mate
Thanks Anthony. What are your thoughts on central bank liquidity driving asset prices higher? And do you think the inflation numbers are underreported?
All is well, except that the sources of income you are promoting are not sustainable.
It's is a passion and joy in it however your work hours are neverending and your obsession has to be on the top level to reach the income you want. That's difficult because no one stays at peak at all the times. The regulated job with the fixed income gives you the same cash every month even if you get sick, take holidays or perform a little lower than the month before.
Self-employed option is a hard time of bread especially if it comes from writing.
Would you be able to provide evidence of success in your field not measured with several likes and comments but numbers?
There was a time some 15 years back when I hated MLM. One of my senior executives in the finance sector aged 23 opened his bank account to hit us with monthly income. He did not have a problem with the disclosure and no one got jealous to see his wealth but everyone wanted to do what he did and follow his advice.
The problem with MLM type models is you don't own the business or have control. I know a few people who've done well so it works. I just think there are better ways to make money.
I had a bit to do with MLM. I could definitely do it if I wanted. The main decision I'd have to make is choosing a good MLM company. Many of them are garbage. I don't like AMWAY as an example. Could you do it? Of course. MLM is good introduction into sales. If you're good at sales you can take the MLM knowledge and use it to start a business you own.
I do have individual stocks in my portfolio but man, this is a roller coaster for someone watching their money every day (I'm beyond that phase). But over a few months to years, they've produced a nice return way above index funds.
And the US debt... It's not meant to be paid back. Only the interest matters. How easy is it to pay the interest?
1). I think that low interest rates will help the US service its debt but don't expect much to change. The last time the US had a budget surplus was during the bull market of the 1990s. Budget deficit and constant production of virtual credit is something we've lived with for decades. The interest rates alone can't control the economy, it's way more complex. My opinion - people pay too much attention to interest rates.
2). Yes, people get currency devaluation but do not understand money supply. Like, the current inflation is because of "Putin's war". BS. You don't produce trillions of dollars within a few months and expect low inflation.
Thanks, Tim. The one thing you might not know is that we need to monitor what asset management companies do (BlackRock, State Street, Vanguard, etc.) and align our investment decisions with them. The trillion-dollar boys know better than anyone else which investments will grow.
The easiest is to go to www.nasdaq.com, enter a stock ticker, and check its institutional holdings. Institutional investors file quarterly reports so you can see which stocks they have been accumulating and dumping. It's somewhat outdated information (about a month old) but for long-term buys it's OK. It's naturally not a guarantee of success but increases the chances of making money.
I can see the same in my charting software in real time but I pay for it. The software has a volume-based indicator that shows large lot transactions (50,000+ shares - institutional investors) vs. small lot transactions (fewer than 50,000 shares - retail investors).
I went through this and I'm like wow this feels like reading one of MJ demaco books
Thanks a huge compliment. Thank you. What's his best book? And what's one of his books that's great but not popular?
His best book - millionaire FastLane
Great but not popular - unscripted
I've read this one already. Any other good books from him?
I think his latest is "unscripted the great rat race escape"
Will check it out. Thanks.
Making money from your money is both art and science, and almost impossible for most people to master. I don’t advise using financial advisors (waste of money), but you should learn as much as you can. You might want to investigate the Bogle method for starters. Its basics are easy for new investors.
I love the Bogle methods but when you factor in inflation and currency devaluation the returns aren't what people think. 7% returns on average from an index fund is nice but if the currency is eroding at more than 7% then you're losing. And that's before taxes.
Agree. But, would you advise novice investors to build a portfolio of their own? That’s why I suggested Bogle to start and learn. Investing is very scary for many people.
It's hard to say what I'd advise. The truth is index funds after currency devaluation and taxes mostly have a negative return. None of the gurus mention that.
The real inflation number is much higher than what's reported. So if you can't beat inflation and you're measuring investment gains in a currency that is weakening every second, you're thinking you're making money when you're not. And that's exactly what the government wants you to think.
This article is amazing. #3 is my favorite rule when I use money to make more money my brain releases an intense feeling that makes me excited.
Same here Samuel. Might be dopamine. Get involved with BTC and ETH and that'll go nuts lol
I agree
"There’s only so long you can lounge on the beach with bottomless cocktails before you get bored and wonder what everyone else is doing at 10 AM on a Monday." - so, so true. Last year I was lucky to have an extended period of time where I didn't need to work or earn, and it taught me a very profound lesson: that time is only valuable if we have something meaningful to spend it on.
Powerful lesson Anna. What are you doing now?
Now I'm doing the most meaningful and creative thing I have ever done - I'm writing! I'm here on Substack and freelance write for various business, startup and career publications. I also consult for startups in Strategy & Ops which keeps my finger on the pulse. But writing about career, business and personal development is where my heart is 💖
My wife and I were middle managers at fortune 500 companies. We both enjoyed our careers, but once we made enough money we both retired early. We have been out of work for 5 and 6 years and have no desire to ever work again. There are so many activities and things to do, people to meet, places to see, things to learn. I wish we were not so conservative and retired 5 years earlier. Having no money worries and no time commitments is true bliss.
RJA would you ever start your own business?
Tim, no. I have enough money and to many interests to devote the time and effort to a business. I had several opportunities since I retired, but I know how hard it is to get a company going and then once you succeed, the scaling up to the next level is another major commitment of time and energy. I ran small business units within a large organization for a while. Had my own my own p&l. It was fun and challenging, glad I did it, but not now.
I enjoy your writings.
exactly
When you reach financial freedom what you’ll realize is you don’t want to quit work forever
That's what I learned at 34 Danny. Wish I knew it sooner.
Consistently good advice. On investing, I'd recommend reading Peter Lynch. I've used his approach over the years, buying companies whose businesses I understood and whose products I loved. Apple is a great example. Against my investment advisor's repeated resistance, I bought 1000 shares of Apple in 2004. And I hired a new advisor. On the value of F U money, you are dead on. Once you have it, you continue to work, but only on what lights you up. On the other hand, what got you your F U money was probably work that excited you, like building your own company and selling it.
One Up On Wall Street was one of my fav books by Peter Lynch, Rick. Any others you'd recommend?
Have stuff to do yet tonight but couldn’t put this down. Best investment is investing in yourself. I’ve never wanted to retire but I love the idea of having the freedom to do what I want. Keep fighting the fight Tim !
Hell yes Jeanette. I subscribe to this way of life for sure. Freedom is the real aim. Everything else is a dog and pony show.
As a former financial advisor, loved this article Tim! Especially number 2. Taking zero risks won’t lead to financial freedom. But calculated risks can. Always enjoy your take on money. Cheers mate
Thanks Anthony. What are your thoughts on central bank liquidity driving asset prices higher? And do you think the inflation numbers are underreported?
I think buy Bitcoin and ETH :)
And get a cash flowing writing business going! My best hedge against the loony Govt controlled financial system
Already doing those things. Invested another $200k in the last few weeks. My Solana thesis worked out well too.
What are your main bets for the next bull market?
Love it man. Betting big on both BTC and ETH. Think the Bitcoin spot ETF and institutional money flowing into crypto will be huge
Same here Anthony. It's a no-brainer but most people don't know because the bear market had so much negative press.
All is well, except that the sources of income you are promoting are not sustainable.
It's is a passion and joy in it however your work hours are neverending and your obsession has to be on the top level to reach the income you want. That's difficult because no one stays at peak at all the times. The regulated job with the fixed income gives you the same cash every month even if you get sick, take holidays or perform a little lower than the month before.
Self-employed option is a hard time of bread especially if it comes from writing.
Would you be able to provide evidence of success in your field not measured with several likes and comments but numbers?
There was a time some 15 years back when I hated MLM. One of my senior executives in the finance sector aged 23 opened his bank account to hit us with monthly income. He did not have a problem with the disclosure and no one got jealous to see his wealth but everyone wanted to do what he did and follow his advice.
What do you think about this approach?
Would you be able to do the same?
The problem with MLM type models is you don't own the business or have control. I know a few people who've done well so it works. I just think there are better ways to make money.
Agree, but this does not answer my questions.
I had a bit to do with MLM. I could definitely do it if I wanted. The main decision I'd have to make is choosing a good MLM company. Many of them are garbage. I don't like AMWAY as an example. Could you do it? Of course. MLM is good introduction into sales. If you're good at sales you can take the MLM knowledge and use it to start a business you own.
Does that answer it?
Insightful, practical points. Thanks for sharing.
Cheers Raveen.
Tim, so much resonated here.
I do have individual stocks in my portfolio but man, this is a roller coaster for someone watching their money every day (I'm beyond that phase). But over a few months to years, they've produced a nice return way above index funds.
And the US debt... It's not meant to be paid back. Only the interest matters. How easy is it to pay the interest?
Hey Denis, a few questions:
• Would you agree interest rates have to come back down so the US can service it's debt?
• Do people get currency devaluation? Do they understand M1 and M2 money supply?
Tim,
1). I think that low interest rates will help the US service its debt but don't expect much to change. The last time the US had a budget surplus was during the bull market of the 1990s. Budget deficit and constant production of virtual credit is something we've lived with for decades. The interest rates alone can't control the economy, it's way more complex. My opinion - people pay too much attention to interest rates.
2). Yes, people get currency devaluation but do not understand money supply. Like, the current inflation is because of "Putin's war". BS. You don't produce trillions of dollars within a few months and expect low inflation.
Wow, you get it Denis. Great reply.
Tell me – what's one thing about money or finance that you know that I probably don't know?
Thanks, Tim. The one thing you might not know is that we need to monitor what asset management companies do (BlackRock, State Street, Vanguard, etc.) and align our investment decisions with them. The trillion-dollar boys know better than anyone else which investments will grow.
Interesting, I hadn't thought of that. How do you monitor what they do?
The easiest is to go to www.nasdaq.com, enter a stock ticker, and check its institutional holdings. Institutional investors file quarterly reports so you can see which stocks they have been accumulating and dumping. It's somewhat outdated information (about a month old) but for long-term buys it's OK. It's naturally not a guarantee of success but increases the chances of making money.
I can see the same in my charting software in real time but I pay for it. The software has a volume-based indicator that shows large lot transactions (50,000+ shares - institutional investors) vs. small lot transactions (fewer than 50,000 shares - retail investors).
Great article Tim. Thank you for your advice.