My Worst Investment Ever Podcast

Neil Patel is a New York Times Bestselling author. The Wall Street Journal calls him a top influencer on the web, Forbes says he is one of the top 10 marketers, and Entrepreneur Magazine says he created one of the 100 most brilliant companies. He was recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35 by the United Nations.   “Have the mindset of testing. What works today may not work a year from now. If you don’t keep testing, you’re not going to thrive and succeed.” Neil Patel Worst investment ever Creating a business to solve his own problem About 10 years ago, Neil’s website, at the time, was doing pretty well, so much so that sometimes he’d get a flood of traffic from social media. This upsurge in traffic would cause his servers to go down. This sounds like a good problem to have, right? While Neil appreciated the tremendous traffic, he had to pay for more and more servers. But then, in most cases, he would never use the extra resources. He thought to himself that it would be a good idea to be able to pay for the resources when he needed them, and not pay for them when he didn’t. Taking matters into his own hands Neil figured that there must be other people who were in a similar situation paying for all these resources and not using most of them. “What if we combine all our servers and have one big infrastructure, and we can each scale up and down as we want?” he thought to himself. Right there and then, a business idea hatched. Neil went to work to start Vision Web Hosting. The multibillion idea that sucked While Neil’s idea was a good one and would have seen him make millions of dollars, a few things turned it into his worst investment ever. First, Neil had no experience in hosting. Second, he picked partners that had no experience either and just paid them because they told him they could do it. Third, hosting was just not Neil’s core focus. He was doing many other things that had him distracted, and so he wasn’t focusing on it. Essentially, Neil ended up spending over a million dollars to start a business that wasn’t generating any revenue. He didn’t even get to launch it. His partners couldn’t figure out how to execute his idea. Eventually, Neil folded the business and had to figure out how to repay all the money that he borrowed to start the business. Lessons learned Ideas are worthless if not executed right Ideas are a dime a dozen. They are worthless unless you pick and execute the right ones. Partner with experienced people Pick business partners who have done it before because they come with learnings instead of starting from scratch and having to learn on the job. Start a business with a minimum viable product If you’re going to start a business, start with a minimum viable product and get it out there. You are never going to have a perfect product. It’s never going to be amazing. Just get something out there and improve it over time. Andrew’s takeaways Sometimes you’re just not ready to join the big leagues You may have a great idea that you want to launch in the global market, but before you go competing in the big leagues, ask yourself if you’re ready to do it. Do you have confidence in your operations? Do you have the money to do it? Do you have the right workforce? If not, accept, pull the plug and wait until you’re ready. Four main things to look for when investing in a startup 1. Trust Do you trust the team that you’re investing in? Usually, there’s no hack to trust. Trust comes over time. 2. The idea What’s the startup’s idea, and is it a viable one? 3. Execution Is the team able to execute on this idea? If the answer is no, it doesn’t matter that the idea is excellent, it doesn’t matter that you trust the team, the idea won’t work. 4. Money Ultimately, you never want to be the only one providing money to any startup that you’re involved in. The startup should have other sources of investment funds. Learn the 18 Questions for Pre-Revenue Valuation of a Startup. Actionable advice Experiment, experiment, experiment. Don’t wait. Don’t say, “Oh, I got to learn more. I’m gonna do it next week.” Just go experiment, do it as quickly as possible, and learn from your mistakes. Learning from your mistakes is a vital part because you don’t have to be the smartest person to succeed if you make a lot of mistakes, but you avoid making the same ones over and over again. Eventually, the right ones will be the only ones that are left. No. 1 goal for the next 12 months Neil’s number one goal for the next 12 months is to double up on his traffic. He’s looking to gain another 10 million visitors a month. Parting words   “It’s very, very important to think about every mistake that you’ve made in business and what you’re trying to achieve in life, write it down, and avoid making that same mistake over and over.” Neil Patel Connect with Neil Patel LinkedIn Twitter Facebook Instagram YouTube Blog Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

Howard Whiteson’s economist father made him familiar with financial principles from a very young age. As a teenager, however, Howard rebelled and suffered deep debt and economic chaos. Having journeyed from that low point to master his finances, Howard has spent some 20 years as an expat, the last six in Shanghai, China. He uses a proven 5-part process to empower executive expats at such corporations as Apple, Coca-Cola, and Gucci to create, transfer, and protect their wealth internationally. To find out more, visit Wealth Without Borders.   “Rather than trying to conquer the entire world of finance, gently take small steps into that world.” Howard Whiteson   Worst investment ever Driving his way into debt It’s a bright summer’s day in Rolling English countryside, and Howard is in his hybrid sports car, with the sunroof down the music going, feeling like a million bucks. He’d just recently bought that car. It was one of the first hybrid cars made by Honda. He was very proud of all the gadgets and gizmos. Howard had spent 28,000 pounds on it, about 40,000 dollars. Riding on a promise Howard had just had two CEOs tell him that they wanted to work with him on a retainer basis. He was proud, confident, and dashing. What better way to celebrate than to spend all his money on the car of his dreams. He was going to be rich soon, anyway. His dreams turn to dust So in his sports car, Howard drove to one of the CEO’s offices in a farmhouse in the middle of Essex countryside, got out of the car, and walked in to see the CEO. The CEO told Howard that the company was letting him go. He’d worked for the company for about 12 years. The news was a huge shocker. As if that was not a blow huge enough, within a few weeks, the second CEO had the same story to tell Howard. He also let him go. So Howard went from being very comfortable and very well off into deep debt and a lot of darkness. He was now tens of thousands of pounds in debt. Letting rebellion rule over him Howard’s father was an economist, and so he grew up learning all about the stock markets, about bull and bear markets. But as an adult, he chose to rebel and ignore all the knowledge he had gained. Howard’s attitude towards money was that it was the root of all evil. It was all a capitalist plot. He believed one should live for today and forget about tomorrow. This kind of attitude led him directly into that dark abyss of financial chaos, debt, and struggling to make ends meet. Hitting a brick wall and making a turnaround Howard was now scrambling for a job. Luckily he had some close friends who managed to connect him to a job soon enough. He enjoyed the new job, but it was tough work and unrewarding. Howard was still struggling to pay off his massive debt. This remains the lowest point in his life where he felt he’d hit a brick wall. What pulled Howard out of this rut was the deeply rooted financial awareness that his father had implanted within him. He finally realized that if he continued along on this trajectory of debt and chaos, he would end up in a very sad place. So Howard dusted himself up, started applying the knowledge he’d learned from his father, and managed to pull himself out of the worst investment ever. Lessons learned Art and finance jell perfectly Art and creativity and maths and finance are not opposites. They overlap and inform one another. There’s a sense of discipline within creativity, and there’s creativity within the world of finance. Acknowledge you’ve made a financial mistake If you ever find yourself in a financial crisis, stop the denial, the rebellion, and just acknowledge that you’re in a dark place, and you’ve got to do something about it. Most importantly, work on gaining financial literacy to avoid future mistakes. Andrew’s takeaways Don’t be afraid of learning about money and investing For a lot of people, money and investing are painful topics mostly because they feel overwhelmed, trying to understand the markets. Don’t let the overwhelm stop you from investing; just keep learning. Build financial security Start investing early and build financial security into your life so that you can enjoy retirement. Actionable advice Take 10% of what you’re earning, if possible, automate it, so it goes, at the very least, into a high-interest savings account or a range of good funds. Divide that money three ways and put it in stocks, bonds, and property. This is a great way to start investing. If you can’t afford properties, there are low-cost funds you could consider. Such investments will build over time. No. 1 goal for the next 12 months Howard’s number one goal for the next 12 months is to be a great dad to his seven months old daughter and a great husband. He also plans to continue learning and developing and simply never stop that process. Parting words   “If you gain value from listening to this, then I will have suffered without it being in vain.” Howard Whiteson   Connect with Howard Whiteson LinkedIn Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Nicholas Hinrichsen was born and raised in Germany and played on the German National Golf Team and studied Computer Science and Finance in Germany, Chile, and Australia. At the start of his career, he looked into consulting and investment banking but instead joined a renewable energy startup that invested in projects in China and India. In 2011, he moved to the US to get his MBA at Stanford Business School, and by 2013 he started a company called Carlypso. He brought that startup through YCombinator in 2014, raised $10 million in venture funding by 2015, and sold the company to Carvana.com in 2017. Carvana went public at a market cap of $2.5B and is now the most valuable used car retailer in the US. Nicholas and his co-founder, Chris Coleman, recently left Carvana to start WithClutch.com, a fully digital platform that lets car owners refinance auto loans from the comfort of their own home. The team at WithClutch.com has seen that in the US, only 5% of auto loan applications were refinancing, yet 47% of all funded mortgage applications were refinancing. So, they are going to change that!   “To succeed as a startup, all you need to do at the very beginning is to leave the building and talk to customers.” Nicholas Hinrichsen   Worst investment ever Young investor When Nicholas was 16, the only thing he knew how to do well back then was playing golf. Then all of a sudden, his friends in school, even some golfers, started talking about investing in technology companies. Nicholas had about $2,000, which was a lot of money for him at the time. His friends told him to invest the money because he could easily 10x that money. Afraid to miss out As everyone around him continued to invest in the tech companies, Nicholas decided to look into it because he felt like he was missing out. He signed up for an account online, went to the physical branch to verify his identity, and then eventually got access to the stock market. Now with an account, Nicholas could shop around for a company to invest in. But with so many options, he was baffled. One of his friends advised him to buy some magazines and then just read about the stocks in these magazines because the magazines wouldn’t recommend buying those stocks if they weren’t the best. And that’s precisely what Nicholas did. Making his first investment and mistake Nicholas didn’t know any of the companies in the magazines, but one resonated with him because that happened to be Germany’s biggest telecom. He felt that this would be a good choice. Nicholas took the money he had and used it all to buy the stock at $120 per share. Sadly, that remains the highest price the stock has ever traded. The stock price went downhill a few months after Nicholas bought it. First slowly, then rapidly, to a point where Nicholas was just watching from the sidelines as the price went down to zero. Finally letting go of his worst investment Nicholas somehow held onto his stock for years, even though he wasn’t making any returns on it. A few years later, he moved to the US for work. He wasn’t allowed to hold a foreign account, and so he was forced to transfer his portfolio in Germany to his US bank. However, he decided that the lousy stock was not worth the effort and so he sold it and counted his losses. Lessons learned The stock market is tricky Succeeding in the stock market is harder than winning the gold medal at the Olympics, so brace yourself and go ready to give it your all. Don’t hold onto cash Cash is not as great as people think it is, especially if there’s inflation. You lose money in the long run by keeping cash in the bank. Invest in a diversified portfolio Manage risk by investing in a diversified portfolio and hire a fund manager to manage this portfolio. This removes emotions out of the investment. Invest for the long term You can only make or preserve your wealth if you’re investing for the long term. Humans act either out of fear or out of greed When it comes to investing, neither fear or greed helps you make wealth. Fear makes you sell your stock when the stock market goes down because you’re afraid it could go further down. Then you miss the upswing. When stocks go up, you get greedy and go into the market, but what you don’t realize is that you’re paying expensively. Andrew’s takeaways Avoid FOMO when investing in the US stock market Be very careful when listening to other people talk about their investments and wanting to do it too because they sound so successful. People only talk about their wins and rarely about their losses. So do not believe everything that you hear. No action in life that is risk-free Every single action has a benefit and a cost. If you put money into the bank, and you don’t get the interest payment, it doesn’t grow. Now you have exposed yourself to shortfall risk, the risk that the money that you need at retirement will not be there. Actionable advice Sign up for a diversified portfolio and get a fund manager to manage it for you. No. 1 goal for the next 12 months Nicholas’s number one goal for the next 12 months is to build another company that impacts people and hopefully makes life better in the US. Parting words   “Run risks, but be smart. Know which risks you’re taking, be very deliberate, and choose the ones that you have under control. Then outsource the ones that you don’t to somebody who’ll have them under control.” Nicholas Hinrichsen   Connect with Nicholas Hinrichsen LinkedIn Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Jason Zweig (2007) Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich  

Wim Steemers has a 30-year career working in over 40 countries around the world, of which the last 20 years were spent in funds management at AllianceBernstein, Macquarie, Colonial First State, and AL Capital. While educated at the University of Chicago’s Booth School of Business, he always had his doubts about the Efficient Market Hypothesis, and he followed the development of Behavioral Finance over the years with keen interest. While he has a traditional fund management role at AL Capital, he spends his free time with his Rosevalley Funds, where he puts into action what he suspected for a long time: there has to be a way to take advantage of the systematic biases that exist in human behavior.   “People do not always behave rationally. They make errors in a particular direction, and if you’re aware of these behavioral biases, you’re gonna make money.” Wim Steemers   Worst investment ever New technology rouses his curiosity In 1999, a new technology of doing laser operations on eyes to correct vision piqued Wim’s interest. Wim had been wearing glasses since he was four years old, so anything to correct his vision was bound to interest him. Though the technology was relatively new, it had been proven to work, but it was still quite rare and expensive. Wim, however, decided to do it. Falling in love with the product The laser procedure took about 15 minutes, and voila Wim had perfect vision. For 30 years, Wim had not been able to see further than a meter ahead without glasses. When he walked out of the room, and he could see perfectly. It was literally as if the sun had risen for the first time in his life. The machine used for the laser procedure was big and cost a million dollars at the time. It was made by a Canadian company that was listed in the stock exchange. When Wim walked out of that operation, he was so impressed and believed that this machine was going to take the world by storm. So he bought shares in the company that made that laser equipment. The company wasn’t as good as the product Within about a year, Wim lost all his money after the company went bankrupt. Wim had done no research and simply thought that the laser machine was so great the company must be doing well. So it turned out that there were competitors that had cheaper products and better laser machines. So the company just couldn’t compete, and that’s how Wim lost all his money. Delving into the Korean investment market In the year 2000, while working as a junior analyst, Wim got a chance to delve into the Korean stock exchange. At the time, Asia was just getting out of the 1997 Asian financial crisis. The crisis caused widespread bankruptcies as banks in Asia continued to fail. Banks now had to find new ways to attract customers. The credit card revolution Banks in Korea discovered credit cards. Credit cards hadn’t existed in Korea before, and the only credit card as we understand it, which means you can rollover the balance and borrow money, was Citibank’s. What existed were charged cards that were automatically debited at the end of each cycle. You couldn’t use them to borrow money, so they weren’t actual credit cards. Credit cards hence became a nice source of income for the banks. The government loved the idea too The Korean government saw this as an opportunity to stimulate the economy. But more importantly, when people pay with credit cards, the government could track those transactions making it easier for taxation purposes. So the government put in measures to promote the credit card idea. The government made it mandatory for businesses to accept credit cards. Also, every credit card receipt was automatically a lottery ticket. So numbers on each credit card receipt were put in a draw, and a car would be won every Friday. Also, for people paying taxes, they could deduct 10% of all their credit card receipts from their taxes. These were significant incentives for people to use credit cards. The banks, of course, loved it too, because it was good business for them. As the credit cards became popular, companies grew bigger and bigger, and some even got listed. Looking into investing in banks As a junior analyst, Wim had prepared a research package, and his recommendation was to buy the shares of Kookmin bank. Kookmin bank was one of these banks that had a rapidly growing credit card business. The bank had a separate entity called Kookmin credit card, which they had listed on the stock exchange. Wim liked the idea of investing in this bank because it was more diversified with a business bank and a deposit business. Following due diligence As a professional analyst, Wim was not quick to make the recommendation. He did his background research first. He had a few doubts, but it happened that every objection he would make in his analysis and every risk factor he would flag, mostly, there was an answer for that. Buying into the stocks anyway The company went ahead and bought Kookmin bank shares. Shortly after, credit card arrears started to rise rapidly, then they became relentless, and soon the share price started to go down. Now all the credit card companies in Korea were releasing monthly arrear stats and aging profiles. Cutting the losses fast As the analyst responsible for the stock, Wim did his research and was able to predict that things would only get worse. Shares prices had now gown down by 50%. When a window of opportunity showed up, Wim went to the chief investment officer and the portfolio manager. He told them it was time to cash out. Wim explained to them that they would make all their money back in the next 18 months; however, when the shares start going up, Kookmin bank would take out the minorities and keep all shareholding inhouse. Thankfully, the bosses listened and sold the company shares before that happened. Unfortunately, the company had lost about 50% of its investment money. Lessons learned Liking a product doesn’t make the company a good investment Buying a stock in a company because you love the company’s product is not a good strategy. Stand up for your convictions As an analyst, always fight for and state your convictions unapologetically. Also, avoid groupthink because it is a potent but dangerous thing. Be wary of something that seems too good to be true If something seems too good to be true, it probably is. And if something feels risky, it probably is. So before you invest in it, take a step back and see what’s happening here. Culture doesn’t trump cash Cultural biases are not a guarantee of the success of an investment. Put culture aside and do your usual due diligence when conducting your research. Andrew’s takeaways Risk management is not always straightforward The job of risk management, ultimately, is to say, we know the risks, and we’ve got them covered. But the reality is, it just doesn’t happen that way. Make your buy-sell decision after your research It’s imperative from an analyst perspective when analyzing a situation that you do not make your buy-sell decision until the end of your research process. Actionable advice Avoid groupthink at all costs. However, to be successful at investing, you need a team approach, but make sure that the team is set up properly. No. 1 goal for the next 12 months The company Wim is working with has a grand vision of turning the small idea they have now into something bigger. Wim’s number one goal for the next 12 months is to see that through. Parting words   “Don’t learn from your mistakes; learn from somebody else’s. So please, listeners learn from these mistakes.” Wim Steemers   Connect with Wim Steemers LinkedIn Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Oladipupo “Dipo” Ehindero is an independent analyst and was Head of Research of a mid-size asset manager before pursuing his Master’s degree. He has been in the research and investment banking space for over 10 years. He also has a passion for human resource management, having previously worked in that area.   “Never play with your documentation. Make sure you keep personal records of every single transaction.” Oladipupo Ehindero   Worst investment ever Oladipupo was on an internship with an asset manager in Lagos when the federal government of Nigeria made law through the central bank that all the banks in Nigeria should recapitalize. So he was told to also participate in bringing clients and advise them on what to buy and what to sell. Oladipupo went out and began making cold calls, meeting high net worth individuals, and trying to build his network. Landing his first client Oladipupo finally met a lady who was looking to invest her money in a bid to raise college money for her two daughters. The lady didn’t have a lot of money; nonetheless, it was a substantial amount to invest. Oladipupo advised her to split her investment money into two, and they invested one half in bank stocks and the other half in a medical diagnostic company. Ignoring his senior’s advice Oladipupo was feeling quite excited after landing this client as he was now more confident about his career growth. One of the senior managers got to know about Oladipupo’s client and the investments they had settled on. While he was proud of Oladipupo’s effort, he advised him not to invest in the bank he had chosen because the president of that bank didn’t have a good reputation. The manager suggested another bank whose MD was a better person than the president of the bank he had invested in. Oladipupo, however, felt that all the banks were the same, and thus he trusted that his choice was good enough for his client. Time to cash out A few years later, Oladipupo received a call from his client, who informed him that one of her daughters had been accepted into a medical school in Hungary and wanted to know how her investment was doing. At this point, her portfolio had grown from $10,000 to $57,000. This was enough to kickstart her daughter’s education in a year. Tragedy strikes Three months after Oladipupo talked to his client, the president of Nigeria died, and the vice president became the president. A new bank governor also came in, and the first thing he did was to say that some banks had been using the recapitalization money for illegal purposes, such as investing in the oil and gas sector. So he removed the bank MDs from the opposition and nationalized the banks. The bank that Oladipupo had invested in for his client issued a profit warning saying that it wasn’t going to make as much money again because they had a lot of bad debt to figure out. Stocks that were roughly selling for 60 Naira per share were now selling for approximately 10 Naira per share, an 80% drop! The client wants her money now Oladipupo’s client came to his office in tears; she desperately needed the money for her daughter’s tuition because turning down or defaulting the medical school admission was not an option. But no one was willing to buy stock from the bank that was practically on its knees. His parents come to the rescue Oladipupo talked to his parents about the situation with the client, and they committed to helping him out. His parents decided to take up the investment and had the stocks crossed into their account. They took out a loan and paid the woman off by the sum of $5,000 equivalent to what she had initially invested three years ago. His woes were not yet over Unfortunately, the stocks kept losing value to a point where Oladipupo’s parents had to sell some of their properties to pay off the bank loan they used to pay the client. The stock prices fell from 60 Naira to 3 Naira per share. Oladipupo’s parents consequently lost a lot of money on the investment. Lessons learned Enthusiasm is good, but skills and experience are even better Having passion when you’re new in business is very good because it gives you drive. But, expertise and experience are better because these are the qualities that will help you know which investment is good, who is a good person in the markets, which companies are well managed, and, therefore, make better investment decisions. Andrew’s takeaways Manage risk with diversification If you don’t want to lose everything at once, consider diversification and owning many different assets. Unfortunately, in Nigeria and many other countries, there aren’t a lot of stocks available for investment. Be careful when investing in banks Banks are very high risk, and you should tread carefully when investing in them. Banks are just an arm of the government, and the government can do anything they want with banks. So there are risks that come with investing in banks that you wouldn’t experience with a traditional company. Banks have a meager amount of capital compared to a normal company. A tiny mistake by a bank can cause a massive shakeup in the share price. Actionable advice Trust is key. You have to get your investor to believe you in your dealings with them, no matter how short term it seems. Documentation is also critical. Make sure you keep records of every single transaction. No. 1 goal for the next 12 months Oladipupo’s number one goal for the next 12 months is to return to the asset management world. He wants to get into impact investing. Parting words   “Be brave. It’s a new world we’re living in, and opportunities are all around us.” Oladipupo Ehindero   Connect with Oladipupo Ehindero LinkedIn Twitter Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Tom Libelt was born in Communist Poland and escaped to the US when he was 11 in the early ’90s. At 9, his father sold products at soccer stadiums in Eastern Europe, where he learned the hard way how to sell and how not to be hustled. He is hyper-focused on helping course creators market their online courses.   “Becoming a big fish in a smaller pond often is not only more profitable but will make your life easier.” Tom Libelt   Worst investment ever In his early 30s, Tom was running a reasonably successful SEO business. Back then, it was easy to rank on Google using what people today consider as blackhat methods. Tom would pay bloggers to get backlinks. Tom had a team of 14 writers at the time, spending a lot of time, money, and effort getting into these blogs. Their goal was to get 50 backlinks pointing to a website every month to keep it ranking higher. While he had other tactics, this model worked the best. Google gets smart After riding the wave for a long while, Google smartened up and was out for businesses doing shady stuff. Google destroyed almost all the blackhat networks. They looked at IP addresses and de-indexed them. Thousands of SEO companies were pretty much back to square one. Tom now had a massive team of writers with nowhere to put the blog posts. Trying option B Tom learned about Amazon Kindle (e-books) at around this time and decided to see if he could make a business out of it. He had a ready team of writers anyway. Tom told his team to pick topics of their choice, do keyword research and write up short books of about 30 to 40 pages, then use images to fill in some gaps and just publish them on Kindle. Competition at the time was little and so getting into Kindle was pretty easy. Striking gold About three months later, Tom’s writers broke even. So he thought this could work. Tom would now sit down with the team for two days, go over hundreds of topics and then pick the best to run with. Eventually, the team was pumping out about 250 books per month, and for about four or five years, the money coming in was quite good. Kindle shakes things up Making money on Kindle was pretty straightforward. You’d get 70% of sales made, and $1 for every book rented. Tom’s business was making a killing by pushing rentals. One day, out of the blues, Kindle killed the rental payment model. Now they would focus on pages read. Turning to blackhat tactics again After the new payment model, Tom turned to a blackhat marketing tactic where he told people in the introduction of the books to skip to the end to get the “Golden Nugget” and then come back to the beginning of the book. So everyone would just go straight up to the end of the book, and Tom would get paid. While this still got him money, it just wasn’t as lucrative. Closing the doors for good Tom’s marketing tactic worked for a while then one day, without any notice, his Kindle accounts got shut down. There was no explanation given, and he was not allowed to appeal the decision. Since Tom had no control over Kindle, there was nothing much he could do than accept the loss and move on. Tom had invested so much in the Kindle business just to have it go away overnight simply because his business model relied entirely on someone else’s business. Lessons learned Easy come, easy go Taking the easier way out may bear you fruit, but it won’t last long. You are better off working hard so that you can reap the fruits longer. Have control over your business Have your own business structure. Don’t depend on other people’s infrastructure. Always ask yourself where the control is? Who owns the control in the situation? If you don’t have control, then it’s not a good business idea. Andrew’s takeaways Build your own assets You have to build your assets instead of relying on others. It’s hard to do this, but it makes your business idea more solid. Know when you are riding a wave There are many ways to make money, and sometimes you will be taken advantage of, but always know when you’re riding a wave so that when it comes crashing, you’re not caught off guard. Actionable advice Keep your team small, if possible. Keep your schedule open because if you don’t have time to think and analyze your business, it won’t grow. Lastly, specialize. No. 1 goal for the next 12 months Tom’s number one goal for the next 12 months is to look at opportunities in the online course creation spaces so that he can diversify. For instance, he’s looking at how he can make more info products.   “The best opportunities are something that you either kind of figure out by yourself by looking at what’s working, or just kind of come to you during your thinking process.” Tom Libelt   Connect with Wilbert Tom Libelt LinkedIn Twitter Facebook Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Michael Covel (2009) Trend Following, 5th Edition: How to Make a Fortune in Bull, Bear and Black Swan Markets  

Wilbert Wynnberg is an international speaker, award-winning author, and founder of the Think Act Prosper (TAP) Growth Conference. Since 2015, Wilbert has touched the lives of over 100,000 people in more than 20 countries through his seminars, live programs, and award-winning book, THINK. ACT. PROSPER.: How Small Habits Can Lead to Massive Success.   “If you want to stay in the investment game for the long term, sometimes you just have to take a short break so that you can enjoy the game.” Wilbert Wynnberg   Worst investment ever Wilbert’s worst investment ever happened just a few weeks ago. As a prolific investor, Wilbert has been following the business cycles since the COVID-19 pandemic erupted. He’s been tracking a lot of different indicators, data, and the underlying numbers. He felt that in 2018, a lot of things had kind of picked up, but there wasn’t any reason for him to go in and take any action, whether it be long or short. So he kept watching the market. Ignoring Coronavirus At the start of the year, when Coronavirus started hitting the news, Wilbert at first wasn’t paying much attention to it. He thought it was the US probably overplaying the whole situation. Wilbert decided not to do anything about it unless he had further confirmation. Getting ready to beat the market By February, it was almost inevitable that the market was going to be shaken up. Wilbert could foresee a bear market. And so he started raising money so that he could pounce on the market. As he was raising money, Wilbert was also tracking things like insider trading, whether CEOs were buying or selling companies, what hedge funds were doing, and more. At that point, his research showed him that it was not the right time to buy equities and go into the stock market. So Wilbert waited it out. Taking the market head-on Eventually, Wilbert found out that with this virus and a high unemployment rate, governments will have to start printing money. So he began to look at commodities. Oil prices started coming down as well. Now Wilbert was very confident it was time to invest. At this point, he had raised a decent few million dollars. Oil stocks seemed like a good option, or was it? Brent oil was at about $25, and the West Texas Intermediate (WTI) was at about $22. This was a two-decade low. However, everybody believed that oil, unlike Bitcoin, would never go to zero because people need it for everyday stuff. So, Wilbert and his investment team were quite confident and stoked. They thought that this was going to be the trade of the lifetime. So without much further ado, Wilbert entered the position and started buying oil stocks. Falling flat on their faces At some point, Wilbert received an alert saying that Saudi Arabia and Russia were going to cut oil production. So they started buying in. Little did they know that actually, it was just a tweet from President Donald Trump. Oil prices at the time were $22. Prices went up to $32 before coming back down. By April 22nd, prices had plummeted and at some point were at a low of $8 while the oil futures contract went to negative 37 (Yes, people would actually pay you to take delivery on oil). Wilbert decided to count his losses and stopped investing in oil. Lessons learned Everybody is in it for themselves Don’t ever think that there will be a time that you’re genuinely safe, and nothing terrible will happen to your investment. Always make sure you keep checking on how things are going. Everyone else is looking out for their interests. You won’t get the whole picture You’ll never understand everything, no matter how long you’ve been an investor. Be careful about overconfidence bias. The moment you feel that you’ve understood the game in and out, that you know every single ounce of the game, that’s when you have to double-check things. Admit when you’re wrong Most people refuse to admit that they might be wrong after choosing one investment over another. They think that the bad situation is going only to be temporary, so they just let it go unhedged. Andrew’s takeaways Behind every trade is a financial infrastructure Don’t overlook the fact that there is a financial infrastructure behind every trade. When buying a stock or a derivative, keep in mind that there’s a whole infrastructure, and if that infrastructure falls apart, it’s over for everyone. Do better research When doing your research, go beyond the typical analysis. Break your research into two parts. Part one, your research on the opportunity, and then Part two is where you allow yourself to imagine what if your investment goes wrong. This removes the emotion out of the investment. Actionable advice If you are serious about trading and investing, record your journey. That is every single thing that you have done. When you start recording things you get to measure them, you get to see what went right and what went wrong. This allows you to be a better version of yourself in anything, just by doing more of what works and less of what doesn’t. No. 1 goal for the next 12 months For the next 12 months, Wilbert just wants to continue to build his fund so he can raise more money and keep sharing financial knowledge with people. Parting words   “It’s a learning journey, so just don’t give up. Get into the right group, right environment, right people, and have a Never Say Die attitude.” Wilbert Wynnberg   Connect with Wilbert Wynnberg LinkedIn Facebook Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Wilbert Wynnberg (2018) THINK. ACT. PROSPER.: How Small Habits Can Lead to Massive Success Jason Zweig (2007) Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich  

Kavee Chukitkasem is the Deputy Managing Director of Kasikorn Securities and completed his Master of Finance from The University of Toledo, Ohio. Kavee is also a TEDx speaker and is the author of a popular investing book on how to identify great stocks and how to sow the seeds for sustainable long-term results (original title:เพาะหุ้นเป็น เห็นผลยั่งยืน).   “It doesn’t matter if you give your money to a fund manager; you still have to know about investing.” Kavee Chukitkasem   Worst investment ever Kavee’s worst investment to date happened during the first year of his career. He had just received his first bonus, and all he wanted to do with the money was to invest it. While it wasn’t so much money, Kavee was excited to be able to enter the investment world. At the time, Thailand’s stock index was at 1,700 points, almost the highest it has ever been. A bubble near to burst Around the same time, the Tom Yum Goong Crisis (the Thai name for the 1997 Asian Financial Crisis, and also a delicious soup with prawns) was building up in Thailand. Even though the signs were all over, nobody saw the crisis coming. Someone advised Kavee that this was the best time to invest, and he blindly believed him. Even though he was a finance graduate already working as a financial analyst, he put his trust in someone else. He never thought of researching the company he was putting his hard-earned bonus into. All Kavee knew was that he was buying at a high and was convinced the stock would keep going up. He never saw that burst coming Kavee bought stocks at 300 Baht each, but thanks to the Asian Financial Crisis the shares fell to a whopping low of 20 Baht in just three months. Kavee was utterly disappointed in himself because, as an analyst, he should have known better than to invest in a company he knew nothing about. Lessons learned What kind of investor are you? The first thing you need to do before you start investing is to know the kind of investor you want to be. What is your long-term investment goal? Before you start investing learn how it works Whether you’re interested in a long or short investment, you have to know how investing works. You don’t need to understand finance deeply but learn the basics and understand the market. Even if you choose to work with a fund manager, you still have to know about investing. Don’t expect to be an overnight millionaire Investing money for beginners can be exciting. Don’t get too excited and expect a hundred percent return in one year, that hardly ever happens. Give your portfolio time to grow. Don’t follow every investing advice you get There’s always someone out there wanting to force tips on investing for beginners down your throat. You don’t have to follow every piece of advice. Just listen and take into account and think about it by yourself. Andrew’s takeaways People fail to do their research, especially when starting to invest. They just pick the company, invest right away, even though they don’t know much about it. People fail to properly assess and manage risk. Look at your investment before you buy it and evaluate the risk and how to manage it. To reduce risk, you need to have a more diversified portfolio. People are driven by money, emotion, and flawed thinking. Many people lose their money because they trust the wrong people. People fail to monitor their investment. Many people just put their money in something, and then they don’t even look at it ever again. Don’t invest in a startup company, blindly. Actionable advice Get to know the investment first before you invest. It doesn’t matter how much you have to invest, keep your money safe first before you sign to invest anything. Whatever you want to invest in, you have to know it very well. Knowledge is essential before you get in because you can learn a lot, and you’ll invest from the point of knowledge and not ignorance. No. 1 goal for the next 12 months For the next 12 months and beyond, Kavee wants to focus on training Thai people on how to invest in the stock market so that they can enjoy financial freedom. Parting words   “Good luck to everybody going into the investment world. It’s very fun, and if you have a successful investment, that’s a good thing to have.” Kavee Chukitkasem   Connect with Kavee Chukitkasem Facebook Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Robert “Bob“ Seawright is the Chief Investment & Information Officer for Madison Avenue Securities, LLC, an investment advisory firm and broker-dealer headquartered in San Diego, California. Bob’s blog, Above the Market, has received “best of” recognition from a wide variety of sources, including The Wall Street Journal and the CFA Institute, and is the #7 rated advisor blog in the country based upon readership, linkage, and influence. And don’t’ miss The Better Letter Newsletter that he writes about markets and life and comes out every Friday morning.   “Good advice wrongly applied isn’t any better than bad advice.” Robert Seawright   Worst investment ever Beginner’s luck Bob’s worst investment ever, like for most investors, was when he was starting as an investor. At the time, Bob was working on the fixed income trading floor for a big Wall Street investment house trading bonds all day every day. So what he knew and understood was bonds. Bod had learned from the bigwigs of investing, such as Peter Lynch, to invest in what you know. So Bob allocated his investment money heavily toward bonds. Thanks to beginner’s luck, he did just fine with his bond investments. Missing out on higher returns While Bob never lost any money for investing in bonds, he played too safe and missed out on other investments that he should have made early in his life. Such investments, with compounding they could have had a lot more returns. Luck and randomness have always been his saving grace In the course of his life, Bob has made a few more bad investments that somehow have turned out well for him, thanks to luck. For instance, he bought a house at the wrong time, but as random as this decision was, it turned out great for him. Bob also went against financial planning advice and paid for his kids’ education. Bob had not been able to go to college, where he wanted because his parents didn’t have the money. So it was a very important value for Bob to provide the best education possible for his kids. This is even though he knew that would mean working longer and having less in retirement. Bob knew from an investment standpoint, it was foolish, but he did it anyway. Lessons learned What are you trying to accomplish? Before you start investing, be sure to understand what you’re trying to accomplish. This is important because every investment, even the best investment in the world, has cons as well as pros. So when inevitably, a con period shows up, you’ll be ready and able to handle it. Randomness in investment is more important than you think If you think about your biggest successes, they all happened with a lot of randomness involved. While they almost always happen because you worked hard, and you made good decisions, there’s also randomness playing a big part. It always helps to remember that when things turn out right, there’s always luck involved. A natural love for new shiny things We tend to jump on what we’ve just seen, and we latch hold of what’s available. When someone mentions something new, they’ve primed the pump, and you’re going to respond with what they’ve mentioned way more often than not. So be careful of investing in something just because it’s new and recent to you. Andrew’s takeaways Familiarity bias versus shortfall risk Investors, especially beginners, tend to play it safe by putting their money in something they are familiar with, such as the bank, or maybe bonds. However, there’s a hidden risk associated with playing safe – the shortfall risk. For instance, if you’re going to need $3 million in cash to retire at age 60, and you put your money into bonds, you’re going to feel like you’ve reduced your risk, but in fact, you’ve increased it on the other end through shortfall risk. Everything is a balance When it comes to investing, you can’t have it all. You think you’re safe by doing X, but what you don’t know is that there’s a balance. So while you’re safe, you’re also causing something else to go out of whack. Actionable advice Be careful of overconfidence bias but also don’t be too loss averse. People tend to be, on the one hand, overconfident and, on the other hand, loss averse. The truth is that nobody achieves something great without trying something great. And if we all played the odds, we probably wouldn’t try something great. So be careful but still take calculated risks. No. 1 goal for the next 12 months Bob’s number one goal in the next 12 months is quite simple: to be a better person. Connect with Robert Seawright LinkedIn Twitter Blog Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Current times might be difficult, and the future may seem bleak, but we will make it through. We will survive and thrive. Our past guests share more advice to help us navigate the COVID-19 crisis. Dan Gramza from Ep43 Don’t Let Overconfidence Ruin Your Trading Strategy Dan Gramza is the President of Gramza Capital Management, Inc. He is a trader, consultant to domestic and international clients, an advisor to hedge funds, a developer of ETF/ETC securities, and co-inventor of two issued security patents. He has published works and has appeared on numerous media outlets around the world. We cannot control the social and economic impact of the virus, but we do have total control over how we react to these changes. Your focus should be on your reaction to thrive. Appreciate the restrictions that have come with this virus because they are causing hidden positive changes. This global pandemic has created a common cause that has brought people together locally and globally. This is an opportunity for us to do the things that we’ve wanted to do, but we always put aside for various reasons. If you’re feeling depressed, and you can’t seem to shake it, it may be time to seek professional help, or your spiritual leader or a good friend to express how you’re feeling. Sometimes just talking about it can put things into perspective. It is also important to relax. Take a break once in a while to relax your mind and body. Take care, and stay well as we go through this unique time in our lives. David Keller from Ep111 It’s OK to be wrong, It’s not OK to Stay Wrong David Keller, CMT, is the President and Chief Strategist of StockCharts.com, where he helps investors minimize behavioral biases through technical analysis. He is the author of the blog, Market Misbehavior, and most recently served as a subject matter expert for Behavioral Finance. Use this period as a learning curve. Keep an accurate record of your decisions and a good trading journal. This will help you to make informed trading decisions in the future. Whatever platform you use, make sure you keep notes of what you did and at what point so that you have a beautiful historical record of your actions once this is all over and we’re through this challenging bear market period. You will learn way more in this bear market phase than in a bull market phase. So keep your eyes open. Dustin Mathews from Ep151 Even if You Are An Expert in Investing in Real Estate, You Must Do Your Homework Dustin Mathews is the co-founder and Chief Education Officer of wealthfit.com, an online learning startup focused on teaching all the stuff you never learned in school about money investing and entrepreneurship. He’s also the host of the Get Wealth Fit podcast where he’s had the chance to get inside the heads of top investors and famous people like Rich Dad Robert Kiyosaki, racing legend Danica Patrick, Kevin Harrington from Shark Tank and many more. This is not the time to try and control the situation. With so much chaos going on, sit back and take it all in. Don’t pressure yourself to control an outcome or have an action plan. Take the time to internalize; give yourself time and space to think. It’s not always easy, but it helps. Talk to people that you respect that you trust and are part of your inner circle, and then put together a loose action plan and be fluid. Be willing to go to wherever this opportunity takes you. Connect with Dan Gramza: www.dangramza.com LinkedIn YouTube Connect with David Keller  LinkedIn Twitter Email Connect with Dustin Mathews LinkedIn Twitter Facebook Instagram Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast