My Worst Investment Ever Podcast

Jonathan Jay has bought and sold businesses for over 20 years, buying from private equity firms and selling to them as well and has also done numerous trade deals. In the last few years, he has brought his knowledge to the world through The Dealmakers Academy, which is a UK leader in training people to buy and sell businesses without risking their own capital. For the first time, he is now teaching dealmakers how to source and negotiate deals to generate cash flow and exit opportunities without them having to work in the business day-to-day and as a bolt on to an existing business. You can gain free access to Jonathan's webinars and latest book, “Business Buying Strategies - The Solution to Your Business Growth Problem” and attend one of his low-cost discovery sessions. Each year he manages a select group of dealmakers through their first acquisition and in some cases, partners with them to create a powerful deal team. “Some businesses are too perfect that there isn’t any value to be added by the new owner. What I look for is a business with enough headroom for myself and my team to actually add value to it. With the value that we add, comes the growth of the business.” Jonathan Jay Worst investment ever The rough acquisition Jonathan was told to approach a certain company in a sector that he already had invested in before and did well. Since he did not want to let an opportunity pass, he met with the owners of the company and discovered that they wanted to sell the business. They were open about the finances of the business, and Jonathan could see that it had done better in the past year or so. Jonathan and his team spent a couple of months doing their due diligence with intensive research and crunching some numbers. Although they had discovered some things that were not particularly good, they had expected these kinds of things in the business of buying businesses. “It’s not all going to be a bed of roses,” Jonathan reminded himself. He dived into that acquisition with his eyes opened. But the reality was just terrible. A stressful transition Nothing seemed to be right after the acquisition. The business had every problem and every issue Jonathan could ever imagine. The staff, the delivery, the supplies, and the finances just all went south. The next six or seven months were a total nightmare because all they did was putting out one fire after another. The only incentive Jonathan had to continue was that at least the company was making money despite being terribly managed. However, that little profit won’t compare to how stressed Jonathan was for that whole seven months. Indeed, after eleven months of firefighting, he sold the company. You don’t get the culture during due diligence Jonathan believed that the people in the company caused one of the main issues of that acquisition. Up to that point, these people were all just names in the spreadsheet with their salaries and starting dates. However, when he met these people, he discovered the level of training they had, their work ethics, and their company culture. These things did not reveal themselves during due diligence. And due diligence is all that he relied on. Lesson learned Resilience is overcoming the unexpected In a very stressful world of buying businesses, if one can get easily stressed by very small things, then the industry is not for you. Resilience only comes from having been given a chance to work through difficult situations. The future can never be certain If you are aiming for something big, then you have to expect that there will be lots of uncertainty. But most of the remarkable lessons you will learn in life comes from uncertainty and disorientation. Never rely on just due diligence Do not believe in everything, including due diligence. People can look great in the report, but in reality, they do not know about the business. Andrew’s takeaways Due diligence doesn’t reveal the culture of the company People as a valuable element of a company is much more than names on the spreadsheets. The reality is, they are more complex, and if you want to be successful in this business, adaptability is the key. Pressure isn’t always bad for you The business of taking over businesses can be a very stressful thing. But pressure can be a good thing because some people perform a lot better under pressure. Create a stress-proof team Sometimes, the team that you have around you may not be able to survive the stress. If your team can handle the pressure, that is one less of your worry. Create a great team with a set of skills where you can delegate the issues that you’ve got but don’t know how to deal with them. Actionable advice Work with the right people. Create your “deal team” that will help you with the deals, will get you great deals, and will help you get through those tough acquisition and transition times. No. 1 goal for the next 12 months Right now, Jonathan and his team have six day nurseries, and the goal is to buy 30 day nurseries in the next

John Swolfs is CEO at Inside ETFs. Previously, he worked at BlackRock’s, one of the world’s largest asset managers, iShares team as a business development associate. In his previous role, Swolfs worked closely with both the Registered Investment Advisors (RIAs) and Independent Advisor community to help promote the use of ETFs and index investing. Before joining iShares, he worked as a financial advisor at Merrill Lynch. Swolfs is a graduate of SUNY Albany, where he majored in U.S. history. And a little bit of trivia, John worked for two years for the New York Mets. “Before you invest, get professional help. It's out there, it's accessible, take advantage of it.” John Swolfs Worst investment ever John’s worst investment happened when, despite being an expert in investing, he started believing that he could time the market. The financial advisor who wouldn’t listen to his advice John is always talking to his clients about thinking long-term and investing for the future. He has always advised them to do what's right for their portfolio and not to worry about what's happening in the market. He, however, took all of that knowledge and information and said that it was not for him. He ditched his thinking and decided to get tactical. He believed that he was smarter than anyone, i.e., that he was smarter than the market. To his clients, he would have told them that they can't do that, that that's foolish. That they need to build a position that allows them to be diversified and ride the markets out. But when it came to himself making the investment move, he thought he didn’t need to follow his own advice. Buying gold in a murky market John invested in gold in 2012, a time when there were a lot of concerns about inflation as the world was still not out of the global financial crisis. Against his better judgment, he bought $15,000 worth of gold, believing that the market would eventually pick up. The price of this investment has been going down since the day he bought it. It still pains him to have foolishly lost all that money. Lessons learned Stick with your allocations If you are building a strategic plan for your asset allocation, stick with it. Avoid personal bias Don’t let personal bias or emotional attachment get you stuck with an investment for too long. Diversify your portfolio Opportunity cost is real when it comes to investing. Build an allocation that allows you to be diversified and ride the markets out. Don't ever think that you're smarter than the market You’ll never be smarter than the market, so always do your homework, and don’t forget your risk management lessons. Andrew’s takeaways Fear is dangerous when it comes to investing Fear can be very dangerous and can hold you back from making solid investment decisions. When you start building a scary scenario of what could be happening in the markets, you start getting confirmation bias. You only find research and people talking about the bad scenario. You’ll keep building upon this fear, and you can easily get caught up in it and end up being driven by emotion or flawed thinking. Equity should be your core asset Build up your investment account over 20, 30, or 40 years and diversify across asset classes, such as commodities, fixed income, etc. This way you’ll be able to manage your cash flow as well as the movement of your overall portfolio. Actionable advice Get help from a financial advisor. Go to a professional who will keep you on track and guide you on the best way to invest your money. No. 1 goal for next the 12 months John’s main goal for the next 12 months is to get all his asset allocations consolidated. He wants to hire a wealth management advisor or a Robo advisor, who will get him back on the right path. Currently, his assets are scattered all over the place. Parting words “You can't control the market. So control what you can, and that's typically cost, taxes, and risk. And if you do that, you'll be ahead of the game. Control what you can and let the markets do their thing.” John Swolfs 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 John Swolfs LinkedIn Twitter Website Connect with Andrew Stotz astotz.com <a href=...

Sal Daher is an angel investor who invests in technologies that set Boston apart. He is a member of Walnut Ventures and MIT Angels. Sal is a syndicate lead and podcast host at Angel Invest Boston Podcast. “The market does not pay you for taking an idiosyncratic or company-specific risk. The market pays you for data.” Sal Daher Worst investment ever Not so much love for the pop Sal as an angel investor is always looking for startups to invest in. it’s no surprise that his worst investment ever was missing out on a good deal. Sal got to learn about a company called Love Pop that makes greeting cards that open up and a magnificent sailing ship or airplane pops out. In his mind, this was one hell of a business idea that was never going to take off. I don’t need my mentor on this one He was smart enough though, to tell his mentor, who has invested in hundreds of startups, about the company. His mentor advised him to meet the founding team. His stubbornness would not allow him to listen to his mentor. He complained that he knew nothing about consumer business and his stronghold was in B2Bs such as biotech companies. He went against his mentor’s advice and didn't take the meeting. A foolish move that he still regrets to date. But why was this a foolish move yet his reasoning was valid? While his excuse for not investing in the startup was valid, it was a wrong move because his number one strategy as a successful angel investor is to invest in teams. He doesn’t invest in ideas or markets, he invests in teams. So at the very least, he should have met the startup’s founding team. It turns out that the two founders are extremely smart entrepreneurs who if put in any situation, they'll figure it out. They went on to figure out their stores, they got VC funding and became a huge success. A success that Sal missed out on. Lessons learned When investing in early-stage companies you have no data for your research. It’s just an idea that the founding team has. To get the best return on your investment you need to invest in the right founding team. Are they excited about their idea? Do they work well together? Find out as much as you can about the team. To you, it may sound like a stupid idea. But, when a bunch of really clever people come to you and say they think they can make tons of money with that idea, don’t dismiss them just yet, give them a hearing. It's a constant temptation to think that you know more than the startup founders but, remember that these guys are out exploring the unknown. So allow experimentation. Don't do it alone. Find angel investor groups near you, join an angel investment network, work with somebody who knows what they're doing. Just don’t work alone. Andrew’s takeaways To win big you must be an open-minded angel investor Good ideas and good money-making opportunities come from many different angles. If you want to become an angel investor you must allow yourself to be open to all types of business ideas. You may just stumble upon a unicorn startup. Invest in teams not ideas It is the teams that are going to turn an idea into a multibillion-dollar investment or a huge loss. So invest in great teams that can overcome various business challenges and build successful startups. Actionable advice Start early, start small, start slow and pay attention because you will learn after a handful of investments. Returns can't be rushed. This idea of FOMO (fear of missing out), forget about that. If somebody is giving you FOMO in a startup, give it a miss. No. 1 goal for next the 12 months Sal’s number one goal for the next 12 months is to increase the number of people in his angel investors list to five times more than he currently has. Parting words “You must have a great deal of discipline if you want to invest in startups. Okay. I say start small, start slow, and don't do it alone.” Sal Daher 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 Sal Daher LinkedIn Twitter Facebook Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

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, Marquis Jets founder, Jesse, Olympic medalists Shannon Miller, and Seal Team six leader Rob O'Neill. “Whatever your goal is, whether it’s investing, do one small action a day to build momentum, and you'll surprise yourself at what you can achieve.” Dustin Mathews Worst investment ever It helps to follow your own investing in real estate advice Dustin’s worst investment ever was his first home, a condo in Florida. In Florida, back in 2007/2008, you literally could buy a piece of property, and it would go up by $100,000 or $50,000, depending on where it was. The condo he bought was on the water and seemed to be a smart move. The reason why he didn't think that it would be a bad investment was that he had a mentor who was running a company, ironically called Foreclosures Daily. The mentor was teaching him how to buy and sell real estate, and together they were teaching others how to buy and sell foreclosure properties. He felt confident that he knew enough to invest in real estate. So he bought a condo on the water without doing any background research or any of the things that he advised his students to do before investing in real estate. What could go wrong anyway? Buying on an interest-only mortgage Now the big mistake was not buying the condo but buying it on an interest-only mortgage. He never planned to stay in the condo. He was going to do what everyone was saying to do. Buy it, live in it for two years, and then move out and buy a new property and trade up. So he figured that because he was only looking to invest in real estate, he would do an adjustable-rate mortgage interest only. Unfortunately, the market turned in 2008 and property values dropped. His mortgage payment became more than what the condo was worth. Eventually, the bubble burst, and now he was facing foreclosure. While he had always taught people not to walk away from foreclosed homes, he walked away from his condo, gave up on it, and gave it back to the bank. Lessons learned Do your due diligence It's so easy to get excited about whatever investment that is currently hot and that everyone is talking about. Don’t get caught up in the hype. Take time to do your due diligence to confirm that, indeed, the investment is good for you too. You may realize that despite the hype, this isn’t the right time or investment for you. Educate yourself Even though Dustin was working in a real estate company, teaching real estate investing, he was so caught up in the job, the KPIs and the metrics that he wasn't absorbing that education for himself. So even if you’re an experienced investor, make the time to educate yourself about every piece of investment you set your eyes on. If possible, consult other people that don't have a vested interest in your stake. Andrew’s takeaways Don’t get overhyped You may get caught up in the hype. Slow down, stay cool and take time to observe and understand things. This will help you make informed decisions. Experts are the worst Many people have probably lost more than they have made in the stock market over a long period, because of overconfidence. Being seasoned investors, being in the market, and on top of it, they assume their investments will be safe, so they go in blindly. It’s okay to feel shameful of your loss People, even experts, will always make mistakes when investing. It’s okay to feel embarrassed about your investment decisions that go wrong. Face it, and move on. Actionable advice The next hot company is always going to be there, the next hot stock is always going to be there, it's just human nature, and so there's always going to be a hot new option. So take the time to slow down, do your due diligence, and find out if that is the right deal for the long haul. No. 1 goal for next the 12 months Dustin’s goal is to be better with his time and have fewer and stronger relationships because, over time, he has learned that it's important to take the time and invest in the right relationships. Parting words “You're going to make some bad investments, just own it and move on.” Dustin Mathews 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 Dustin Mathews LinkedIn Twitter Facebook Instagram Website Connect with

John Pugliano is the author of The Robots are Coming: A Human's Survival Guide to Profiting in the Age of Automation. He is the host of Wealthsteading Podcast as well as the founder and money manager at Investable Wealth LLC. John’s circuitous career path includes military services, both enlisted and officer, corporate career in industrial sales, and finally, a late-blooming entrepreneur. John has an MS in Systems Management from the University of Southern California and a Bachelor's of Science and Environmental Science and Engineering from Penn State. In a nutshell, John is the quintessential Millionaire Next Door. “First, learn how to earn, then you have to save, and then and only then you invest.” John Pugliano Worst investment ever John found himself in the middle of the internet bubble in the 90s. Being a smart investor, he’d seen the internet bubble coming, and so he got out of technology stocks. This saved his wealth and so he was sitting on his high horse as he watched others lose their investments. The arrogant and overconfident investor Having escaped the internet bubble unscathed, John became arrogant and overconfident. With so much confidence, he invested a very large percentage of his portfolio in a brick and mortar, retail type of service company. He invested in Boston Market, a concept restaurant that served good healthy, home-cooked kind of meals. But the big concept of it was you didn't have to eat there. You could take it at home. Take out was a new thing, and this made the company all the rage. His entrepreneurial instinct told him that the technology stocks would go down, but the brick and mortar type of restaurants would always be there. And besides, the company had great reviews. Everybody loved it. So feeling all smug and overconfident, he put a large portion of his portfolio that he'd already made a profit on from getting out of the internet bubble into Boston Market. Falling off the high horse The Boston Market stock listed at about $20 and was selling at around $45 when John decided to invest in the company. Within a short 18 months, the stock went to zero, and the company went bankrupt. So John didn't lose 10% or 20% or even 50%, he lost a whopping 100% of a large portion of his overall investing portfolio. John was overconfident in his investment plan so much so that he didn’t even consider diversified investments. He put all the money he had in one stock. Lessons learned Diversify your portfolio John learned the hard way that you don’t have to believe in the rich man’s hype. You don’t have to take big risks to win. The way to win is through portfolio diversification. So instead of investing in one stock, diversify your portfolio by investing in many different stocks. This cushions you from making your worst investment should one of your stocks go bankrupt. John’s style now is to have very large diversification. He prefers to have a minimum of 30 stocks at a time, which gives him roughly a 3% position in any one stock. Now even if another disaster happened and one stock went to zero, he’ll only have lost 3% of his overall portfolio. He now believes that if you can't have a diversified portfolio, you're not an investor, and you shouldn't be doing it. Ignore the hype Ignoring the hype is especially an important lesson for people who are interested in how to start investing in stocks. Forget the people on Wall Street; they’re simply interested in getting your money, so don’t take them at face value. Being cynical when getting into the stock market will save you from losing your wealth. Ask the hard questions before you get sold. Don’t be a conformist Don’t fall for fear of missing out, aka FOMO. Just because everybody else is investing in a particular stock, you don’t have to do it. Whenever you conform you risk getting mediocre performance. Protect yourself with a put If you want to buy into one stock, you can protect your wealth with a protective put option. A put option allows you to know upfront what your losses stand to be. So you know how much you’re willing to risk. Andrew’s takeaways Be careful not to be overconfident Confidence or overconfidence is the problem, while diversification is the solution. Overconfidence will bring you losses, but learning how to diversify your stock portfolio will increase your wealth. Do your research The number one investment mistake that people make is that they fail to do their research. We fail to properly assess and manage risk leading to poor investments. Actionable advice Mitigate your risk and refrain from investing more than you're willing to lose. That's the beauty of a protective put. It forces you to decide what you're willing to lose upfront. No. 1 goal for the next 12 months John’s number one goal is to get out of the unpredictable stock market before it falls apart. He doesn’t want to be the last guy standing. He wants to get out before the music stops. Parting words “The best way to build your wealth is to do what works for you a

Geoff Gannon is a portfolio manager, podcaster, and investment writer. He manages accounts at Focus Compounding Capital Management, and he co-hosts the Focus Compounding Podcast with Andrew Kuhn. He started writing and podcasting about value investing in 2005, at the ripe young age of 19. Since then, Geoff has written hundreds of articles for Seeking Alpha and Guru Focus. He wrote the Gannon On Investing newsletter in 2006 and two GuruFocus newsletters from 2010-2012. In 2013, he co-founded Singular Diligence (a monthly investment newsletter) with Quan Hoang and authored all issues from 2013-2016. In 2017, he co-founded the Focused Compounding member website (with Andrew Kuhn). In 2018, he co-founded Focused Compounding Capital Management, where he manages client accounts. Lastly, in September of 2019, Geoff Gannon and Andrew Kuhn announced their partnership with Willow Oak Asset Management, a subsidiary of Enterprise Diversified Inc (SYTE US), to launch a hedge fund with a target launch date of January 1, 2020. “If you have a monopoly or something like that, it’s okay to have a lot of operating leverage and a lot of debt.” Geoff Gannon Worst investment ever Geoff got into investing as a teenager when he dropped out of college after one semester. He figured college wasn’t his thing. Instead, he wanted to do something related to investing as well as writing. So by the time he made his worst investment, he’d packed some good years of experience in investment and risk management. Even the most experienced investors make blunders Geoff’s worst investment ever was a personal investment. He’d been interested in the Weight Watchers stock for a long time but didn’t buy it as the price was always too high for his liking. He’s a value investor and likes to pay a low price for things. The lucky star shines on the seasoned investor As luck would have it, a couple of factors affected the price of the stock. The controlling shareholder decided that they should take on a lot of debt and buy back a lot of stock, which caused the stock price to shoot up. However, the price got so high that nobody wanted to buy it, which then caused the price to drop more than it should. Suddenly he was looking at the cheapest stock amongst its competitors, some that he never thought were as good as Weight Watchers. Now he got pretty interested in the stock. He goes against his better judgment Weight Watchers was a controversial stock at that point. But he liked the price, and it had all the things about a business that he liked as well. However, Weight Watchers had more debt than companies that he’d normally buy. The $33 per share stock price got him to ignore the debt and its possible consequences. Over the next year or so, the stock declined to the lowest price it has ever hit—$4. The price did increase after an announcement by Weight Watchers that Oprah was partnering with them. He ended up selling his shares at $17, making a 50% loss. Lessons learned Don’t invest in a high debt stock Geoff’s biggest lesson was that when buying stocks with high debt, you ought to consider the type of product or service the company is trading in. When a predictable company, for instance, an airport or any monopoly, take on an excessive amount of debt, the stock remains safe. However, a company like Weight Watchers is less predictable because they offer products that people will not hold onto for long. The average Weight Watchers member only stays with the diet for about nine months, meaning customers decline if they don’t get to sign up new ones. If the company had not taken on an excessive amount of debt, if they'd kept it pretty reasonable and low, that would probably have changed the trajectory of the performance of that stock. Think about fads too Before Geoff bought into the Weight Watchers stock, there was a buzz around the Atkins diet. It became this huge phenomenon beyond anything that any diet had been before for about a year. It did a huge amount of damage to the Weight Watchers business that year. Geoff Knew from research that the Weight Watchers stock declined a lot with the Atkins diet. He made the mistake of thinking that that was a one-time thing, but other fads such as apps and other diets came up and continued to affect the price of the stock. Andrew’s takeaways When looking for stocks to buy pay attention to the company’s debt Most people never take time to research whether the company they want to buy into has any debt. Now that’s a risk management mistake because debt can creep up. Even though it doesn't cause a problem most of the time, but when it does, you can lose the shareholder value in the business that you are investing in. Investing in the stock market for the first time? Start slowly When investing in the stock market for the first time, it pays to start slowly. When you find an investment idea that you think is viable, go in slowly and give yourself time to monitor its performance. This saves you from experiencing buyer's re

Barbara Friedberg has an MBA and a Master's in Science. She is a veteran Portfolio Manager, FinTech consultant, expert investor, and former university finance instructor. She is editor-author of Personal Finance: An Encyclopedia of Modern Money Management, Invest in Beat the Pros and How to Get Rich. She is CEO of Robo-Advisor Pros, a Robo advisor review and information website. Additionally, she is the publisher of the well-regarded investment website Barbara Friedberg Personal Finance. Her work is found on U.S. News & World Report, Business Daily, Investopedia, Go Banking Rates, Investor Place, MSNBC and MSN Money, Entrepreneur, and many other places. “Buying, although it's got a certain psychological benefit of owning your own home, financially, it may not be the best way to build wealth.” Barbara Friedberg Worst investment ever Barbara and her husband are not newbies to the real estate market, having bought their first home in their 20s and 30s. It was while living in California and after having their daughter that they decided to move to another cheaper region. The couple realized that their lifestyle would be crazy trying to work and raise a family in California, so they decided to move to the Midwest. Even the most experienced make the worst investment decisions After selling their home for a tidy sum, they went house shopping in Indianapolis. To their delight, homes in Indianapolis were much cheaper than in California. Excited, they forgot the most important rule of buying a home: do your research. Struck by the relatively low real estate prices, they went all in and bought a beautiful four-bedroom home in a brand new community. The investment wasn’t so good after all After two years, Barbara’s husband had to change jobs, which meant they had to move. Selling the home was not as smooth as they expected. No one wanted to buy the house. What they would have realized had they done their research is that locals preferred houses with a basement, and theirs didn’t have one. The other problem they didn’t anticipate was Barbara’s decoration. See, she loves modern style decorations, so she’d decorated every room to her taste. Not to say, her taste is poor, but the decorating style in Indiana leans more towards traditional than modern. So her house was not the plum that she thought, given the area of the country they were living. When they listed their house on the market, it did not get a lot of traction. Ultimately, they did end up selling the house two years after they’d bought it for a loss of $25,000. Lessons learned Know your neighborhood before buying your first home Before you buy a home, do your research and understand the neighborhood well. Find out what are the must-haves for local home buyers. If everyone wants a house with a basement, buy a house with a basement. This will help sell the house faster when the time to sell comes. If you're going to sell in a certain region, you want to make sure the house fits in with the norms of the region. Buy a home only if you’re sure you’ll live in it for at least five years Buying a home is an expensive venture, and so is moving. Don’t buy a home unless you are pretty certain that you're going to stay in that property or hang on to that property for five to seven years. Real estate investments appreciate slowly Unlike the stock market, which is quite volatile, the real estate market is much more stable and moves slowly. So unless you are planning on staying in a house for five to seven years, don't buy, rent instead. Buying a house and expect to sell it for profit in the next one or two years is very difficult. Andrew’s takeaways Just because it's cheap doesn't mean you have to buy it Just because a house is cheaper than you expected it to be, does not mean that you should buy it. Consider all other factors of buying a home on top of the price. You may realize that it’s not a worthy investment in the long run. Do your research before you buy that home When investing in a home outside of your area, be careful. Take time, think about it, do your research, and make sure that it’s the best thing to do. Forget the American Dream to buy If you're going to stay someplace for less than five years, rent. You don’t have to follow the so-called American dream to buy. Sometimes it’s more beneficial to rent. Actionable advice Don't buy a home just because you are impressed by its grandness. Consider what's important to you in life. Consider if the house truly fits your needs putting in mind the future as well as your current situation. No. 1 goal for the next 12 months Barbara has been working very hard on Robo-Advisor Pros and intends to continue to make the website the premier site to learn about Robo advisors. These are automated digital low-fee investment advisors. She believes that they can be a helpful tool for individuals to manage their money at a very low cost. Her goal for the 12 months is to continue to build that asset up to help people learn to build wealth,

Buck Joffrey is a physician turned entrepreneur and professional investor. He is also the host of The Wealth Formula® Podcast and author of an international best-selling book, 7 Secrets of Eternal Wealth, which focuses on financial education for high paid professionals. “At the end of the day, I just came into a realization that I really made a big mistake. I can sit here, chase it, spend money to save it, or I can give it up, cut my losses, sell it to somebody, learn to take the loss and move on. And so I did the latter.” Buck Joffrey My Worst Investment Ever Story Surgeon turned real asset investor Buck finished surgical training in 2008. Having his own practice and doing a few other things, he started to have a little money to invest. He got interested in real estate primarily because of his family’s influence but mostly because of Robert Kiyosaki, the author of the best-selling book, Rich Dad, Poor Dad. “It’s just math, and I’m good with math” Buck got addicted to the idea of cash flows and multifamily real estate, and he went on and read two of Ken McElroy’s books, The ABC of Real Estate Investing and The Advanced Guide to Real Estate Investing. Armed with advice from all the books he read, he concluded that it's all just math, and he knew he’s good at it. With no help from anyone, he started looking for properties. The deal that spiraled out of control For his first venture into the real estate world, Buck thought that it was a good idea to go to an online site to look for properties. He eventually found a deal, did the math, and saw a great opportunity–or so he thought it was. He went down to the place where the property was, ticked all the boxes, and bought the building. Just as quickly as he had made the deal, he started realizing that nothing on his spreadsheet seemed to be working. All of a sudden, everybody stopped paying their rent, and a bunch of people was creating more problems than he could handle. Buying something that you think you know and realizing that it was not after It turned out that Buck’s first deal was a fraud. The previous owner, to be able to convince people to buy his properties, would let people live there for free for a while. This was just to put on a show that the building was performing well and that buyers could expect to receive rent from the fake tenants. And so, the whole thing was a mess. Buck, with no one to turn to and with little to no experience in property management, had to sell the building after a year later for a loss. It’s one thing to know what you think you are buying and another thing when you realize that it’s not what you thought. It was a tough way to learn but a good lesson nevertheless. Lessons learned Real estate is more than just numbers The heart of real estate is operations. It’s a combination of finding an asset and good property management to squeeze out those high returns and get the most out of it. Build a great team and find the right people If you plan to venture into real estate on your own, don’t. Buck has learned it the hard way. It is very important to create a team with the skills and experiences in real estate. Don’t underestimate the potential gains from being a “passive” investor Over time, Buck learned that there are two sides of real estate. Some people are doing it full time, which brings a decent amount of cash. Others, on the other hand, are investing as passive investors who are only limited partners with operators. With zero work, they get to earn a lot more than those who are full time in real estate. Andrew’s takeaways Do your research properly The number one common mistake is the failure to do research properly. Research is beyond numbers. When doing your research, investigate, check, and test those numbers if they’re real. Your team is your asset Getting the right people on the bus will shape the strategy of how you invest, where you invest and how you will manage. So, it’s a great reminder to build a great team around you which you can trust. Realizing when to cut your losses Don’t wait for a miracle to happen. When it’s losing, learn to give it up. Cut your losses and put your money into something more hopeful. There is so much emotional baggage with cutting losses. It is important to realize when to stop before draining your money, spirit, and time. Get out, move on and do not make the same mistakes again. Actionable advice If you’ve got a full-time job and you are focused on it, the last thing you want is to give yourself another job. So, if what you are looking at is a potential investment as a limited partner, find yourself a group of people that knows what they are doing, and you will, in most cases, get a much better outcome with zero additional work for you. No. 1 goal for next the 12 months Right now, Buck has about $300 million worth of assets under management for his investor group. His goal is to continue to get people as good returns as he can and maximize investor returns. Parting words “Remember, learn f

Deacon Hayes is the founder of WellKeptWallet.com, which reaches over 1,000,000 people per month. He has been a contributor for the US News & World Report, Investopedia, Clark Howard and more. He is also the author of the book, You Can Retire Early! Everything You Need to Achieve Financial Independence When You Want It. “Opportunities are like buses, there’s always another one coming.” Deacon Hayes My Worst Investment Ever Life before the devastating investment Hayes lived and worked in Phoenix, Arizona before his big fall and his subsequent rise from the ashes. Like most Americans, he had his fair share of debt but had so far managed to find a balance with his income. However, he loved his job and his life and lived by his philosophy of following his passions. Until he came across the opportunity that changed his whole life. Real estate fad covers country in early 2000s The early 2000s were times of great financial stability. It was a time of prosperity and growth in the world of finance with all markets from the stock market to currency exchange achieving record highs. The real estate market, in particular, was doing really well, with that being described as the age of the real estate boom. With emotions running high, Hayes decided to take a risk on the market. Investing for him meant the possibility of having a debt-free life, and it was too good an opportunity to pass. So having done his homework he decided to buy not one but two condos. Investor gives in to ARM loans’ allure The first mistake that Hayes made was taking a huge risk on multiple investments without being fully informed about the real estate market. He had a payment option ARM (adjustable rate mortgage) plan. In a nutshell, this would allow him to make a small minimum investment with variable interests which seemed like a good idea. In retrospect, giving in to this allure is the worst mistake he made given how much he ended up losing. Financial crisis begins in 2007, put all his net worth at risk Between 2007 and 2008, half of the U.S. suffered the worst market crash in real estate history. For a number of reasons, property values plummeted while interest rates shot through the roof. Hayes, alongside many other Americans, felt this major blow. And as a result of his poor risk management, he was at risk of losing not just his two condos but a majority of his net worth. When it rains, it pours So here was Hayes, in his early 20s, hundreds of thousands of dollars in debt and had lost up to 95% of his net worth. Sounds pretty bad huh? Well, it got worse for him. See the land that his two troubled condos were built on was on a lease that ran out soon after the market crash. This meant that his Homeowners Associated (HOA) fee payments would go up. And boy did they go up; by more than 300% to be exact. Struggling to stay afloat while drowning in debt For the next several years (a decade to be exact), it was an uphill battle to keep financially afloat. Despite having double income through his wife and some investments in the stock market, he did not have enough money to rescue let alone sustain his properties. He was also in constant conflict between dumping the seemingly rotten investments and finding ways to save them. He tried everything from cutting costs to paying off the loans to finding multiple tenants for the property. Unfortunately, it wasn’t enough. He lost one condo a few years after the crash through foreclosure after failing to find someone to buy it. The other one went soon after, and despite finding a buyer and escaping bankruptcy, he ended up selling it at a loss of $40,000. Ten years later, Hayes is finally free. It was a rough several years, and he lost a lot; there is no doubt. But he also learned a lot from his experiences on risk management and how to avoid loss. Lessons learned Here are some of his lessons so you too can avoid making bad investments and losing more than you are ready to. Do your research Investing is more than just having a gut feeling that a market will go up. You need to research. Learn as much as possible about the risks, rewards, and everything that could go devastatingly wrong. And only after understanding the good, bad and the ugly should you take out that check book. Minimize your risks Risks are inevitable when it comes to investments. However, unnecessary risks are purely out of choice. It is important to minimize your risks as much as possible when investing, especially in real estate. The best way to do this is by making a decent-sized deposit with rates that favor you. That way, you will manage to pay off the mortgage sooner and with less interest. If this means getting one investment at a time, then do it. Some risks are just not worth taking. Don’t go all-in on a new investment Whether it is a new company in the stock market or some new investment fad, it is never a good idea to give it all you have. It doesn’t matter how good the deal seems. Instead, invest a little at a time as you get to und

Aaron Walker has founded more than a dozen companies over the past 41 years. He attributed much of his success to having surrounded himself with his Mastermind counterparts. Aaron spent a decade meeting weekly with Dave Ramsey, Dan Miller, Ken Abraham, and five other amazing entrepreneurs. Aaron is the founder of Iron Sharpens Iron Mastermind Group that now hosts 15 groups with national and international members. Aaron is the author of View From The Top: Living A Life Of Significance, a must-read book to fully understand how to live a life of success and significance. He is also a founder of the Mastermind Playbook which is an incredible resource for starting, running and scaling masterminds. Aaron lives in Nashville, Tennessee, with Robin, his lovely wife of 40 years. He has two incredible daughters and five beautiful grandchildren. When time allows, Aaron enjoys hunting, fishing, golf, and is an avid reader. “We have all these plans, yet we're not promised tomorrow. I encourage you to live today like there is no tomorrow in a good way. Surround yourself with honorable, trustworthy people.” Aaron Walker My Worst Investment Ever Story It started as a success story At a young age, Aaron Walker wanted better for himself. He came from a family of six and grew up in about 600 square foot house with barely little to survive. While still in night school, he was working during the days and never stopped. When he turned 18 years old, he impressed one of the largest insurance agencies in the country at that time to invest with him. After signing a $150,000 loan, Aaron opened up his first retail outlet. It became a success, and in 36 months, he was able to pay off a 10-year loan. He kept doing what he had been doing, and soon young Aaron Walker had already opened four stores in Nashville. He got a call from a Fortune 500 company, and they made an offer he couldn’t refuse. At the age of 27, Aaron Walker had made enough money to retire. A tragedy turned his life upside down After 18 months of doing nothing, Aaron had come to a reality that he needed to get back in there, lose some weight and find a new job. So he went back to the company he started with when he was 13 years old. Now, at the age of 40, the company had grown four times bigger than it was 20 years ago. Aaron never stopped working from then on. He thought his life couldn’t get any better. He had his beautiful family, a steady job, vacation home and a big house on the hill. Until a tragedy turned his life upside down. While he was headed to his office, he ran over a pedestrian, and eventually, the head trauma killed the man. Even though it was not his fault, Aaron suffered anxieties because of stress and pressure after the accident. He took a break for five years. The painful realization For more than 20 years, Aaron wanted nothing more than a better life. But sometimes, life slips through a backdoor, and had it not been for that ugly turn in his life; he would not have realized what had been missing–a legacy. Would he want to be just another rags to riches story? No, Aaron wanted more than that. He wanted to have an impact on other people’s lives. So, he changed his focus and started thinking and looking outward rather than inward. He wanted to help people accomplish their goals and dreams. Ultimately, he wanted to transform lives. Lessons learned Build relationships intentionally In today’s society, people hide behind the screens and completely obliterating the importance of human connection. These intentional relationships we create every day gets us out of our own head and lets us focus outward instead of inward. Success comes after gratitude When you are grateful, you build good relationships with the people around you. As a result, natural reciprocity comes back to you. Learn to prioritize A lot of people try to live a balanced life, which is a myth. What needs to be done is to be very out of balance in the right places. Focus on the things that are meaningful, with purpose and that are lasting. Andrew’s takeaways When tragedy strikes, you can never avoid it Tragedy will strike you one way or another. Through these darkest times, the relationships you have with your family and friends will carry you out. Create a legacy that lasts We get so caught up with life and all its craziness that we sometimes forget what our legacy is. How will you leave an impact on other people? How will your existence inspire others to transform their lives? Start with a mantra of helping one person to step towards achieving their goals and repeat it every day. People are intrinsically motivated That management of companies these days have shifted away from judgment to metrics has lead to less focus on relationships. But people are intrinsically motivated, and many times, when we try to put on something extrinsic like a KPI to guide them, it's like you ruin the whole joy of work. Actionable advice It’s really important who you spend your time with. We should be very selectiv

Dustin Heiner is the founder of MasterPassiveIncome.com and the host of the Master Passive Income Podcast. Dustin is a real estate rental property investor, who was able to make enough passive income from his business to quit his job when he was 37 years old. With his podcast, books, courses, and coaching, he now helps other people quit their job by investing in real estate rental properties to live the dream life. Now, Dustin is living his dream life alongside his wife and four kids while traveling and exploring the world. “If somebody asked me before, ‘Hey, Dustin, what do you do?’, I used to say that I work for the IT for this department in the government. Now if somebody asks me, ‘Hey, Dustin, what do you do?’ I don’t say I’m an author or a real estate person, I would say, I am an investor.” Dustin Heiner Worst investment ever Being laid off from a job was not that bad at all Before becoming a master of passive income, Dustin Heiner worked as a government employee for years. As he was going about his daily grind, he received a phone call from his boss who summoned him to her office. At that very moment, Dustin thought of all the worst-case scenarios. While he was walking to his boss’s office, he could not shake the bad feeling that he would lose his job that day since rumors had it that the department had been cutting people off. He was given a two-week notice Then came the blow when his boss confirmed that he had been laid off. Losing a job while trying to provide for your family is a scary thing. But Dustin had to do something. First things first, he had to get a new job quickly. Good thing is, he’s got good connections from his previous jobs and luckily, he got hired a week after losing his job. One word sums up everything he was talking about – network. Planning for some backup Dustin learned his lesson and started to think forward. Being just an employee would not work for him and he needed a way out from his job. His back-up plan—investments. So, he started investing in stocks but turned out, he was losing far more money from it. He then stumbled on real estate which taught him great lessons. Location-based businesses are not for everybody Not all beginnings are great, and Dustin could attest to that when he invested in a retail establishment in 2007. It was a combination of a convenience store and a pizzeria, a market that is heavily dependent on the people around the area which is very promising. And the results for the first 2 years were great. However, the economy crashed and the working population in that area was greatly affected. Consequently, Dustin’s retail business also suffered. So, what began as a good investment, turned out to be his wake-up call. Lessons learned Invest your time and money efficiently Spend your life doing the things that are going to benefit you more than just a job. When you know what those things are, study and master it. The results will surprise you. Get an investment that works for you Dustin cannot stress this enough that you need to create a business that does not need you. Let the business do the work for you. Therefore it is very important to learn and master passive income. Know and control your expenses Easy to say but hard to learn. There is no hard and fast rule on how you successfully control your expenses. It is important however to find the best way possible to at least minimize the costs. For Dustin, he loves real estate and has formed a formula on how to handle his expenses effectively. However, controlling your expenses is as important—if not more—as knowing your expenses. Being able to spot them head-on would save you a lot of time and money. Do not forget your exit strategies Diving into a business venture is one thing and planning the best exit strategy is another. Dustin did not know about strategies when he started but somehow, he stumbled into it. He never starts anything without his exit strategies. It may not be necessarily exercised, but at least, it will prepare him. Andrew’s takeaways Master passive income When someone asks you, “what do you do?”, Dustin teaches us how to answer it. You don’t say, you’re an author or a real estate person, you say you are an investor. And what it conveys is that you are an investor of your money and time. Another key investment strategy is allocating resources. This way, it makes you think differently and start to do things differently as well. Don't put your time and effort on things that will only pay you one time. See what passive income is, and master it. Move towards financial independence Only invest in things that are going to help you move towards your financial independence. We constantly think that financial independence is an important goal for us. The journey to financial independence is to focus all your effort and time on things that will bring you a step closer to that goal. Get yourself out of the employee mindset The key to changing that mindset is to just simply think differently. You ar

A graduate of the American Film Institute's directing program, Max Weissberg co-produced and appeared in the feature documentary film, Hotel Gramercy Park, which included cameos by Ben Stiller, Winona Ryder, Karl Lagerfeld, and Kanye West. The film earned a jury citation at the 2008 Tribeca Film Festival and screened on the Sundance Channel for several years. Max’s micro-budget feature film, Summertime, screened at festivals including SXSW and won best screenplay at First Time Fest. The film is now available on over a dozen VOD outlets worldwide. In 2013, Max's AFI thesis film, Karaganda, set in a Soviet prison camp, was "top 5" jury-selected for the 2014 AFI DGA showcase and won 5 festival awards in 26 film festivals. Max is currently in the midst of a crowd-equity campaign for the feature version of Karaganda and has so far raised over $130,000 from 155 investors on Startengine.com/Karaganda. Max's day job is at Viacom, where he works as a producer/editor. His work there has appeared on MTV, VH1, Comedy Central, TV Land, and Paramount networks. “Well, I think if you cannot explain what the need is for something, then there probably is no need for it.” Max Weissberg Worst investment ever Jumping onto the cryptocurrency market bandwagon Two years ago, Max was probably the only one among his peers who thought that the cryptocurrency market was a total scam. The Bitcoin investment mania had taken off at this point, and there were millionaires left, right, and center. However, his instincts told him that the coin would fall. However, he went against his instincts and decided to join the crypto bandwagon after attending an event at the National Arts club about cryptocurrency. The hype about cryptocurrency was so big, with everyone in attendance talking about how Bitcoin was the future. When they asked the room, who owned a digital currency, most of the room raised their hands. So Max was sold, and he figured that he didn’t want to be the last one on this gravy train. Kind of the same feeling I had when I went one to become one of the thousands who followed the herd to big losses in the dot com era. Without a second thought, he went ahead and took $800 and put it in cryptocurrency. Theory of a bigger fool than the digital currency investor In December 2017, Bitcoin’s value stood at about $19,000. This price went up and down a little bit. And then the prices collapsed. Max was a little bit surprised, but admittedly, he had seen it coming. He had ignored his own advice. So why would he make such an investment mistake when his instinct told him not to? Well, Max went along with the theory of a bigger fool than him, which most people who invested in Bitcoin believed in. The theory poses that there has to be a bigger fool out there. Someone who would believe in the craze and buy his Bitcoin, and he’d make a profit. The idea of intelligent people espousing this philosophy won him over, and he hoped that there was just a huge amount of people who had an interest in crypto trading. He assumed that there were hundreds of billions of dollars of money in the cryptocurrency market. He believed there had to be an institutional investor or somebody out there putting this money. Unfortunately, that was not to be. Max sold his Bitcoins for a fraction of what he had paid. All his Litecoins were almost worth nothing by the time he sold it. Luckily, he knew going in that he did not want to put more money into it than he could afford to lose. It pays to ‘sleep on it’ The number one mistake that Max made was to rush into making the worst investment without giving it as much as a second thought. He fell immediately for the hype that he should have 1% of his assets in digital currencies. Immediately after the event, he went on Coinbase, opened an account, and transferred money the next day. He bought three cryptocurrencies, but mainly Bitcoin. He was excited by the volatility of Bitcoin. One day it would go up 10%, the next day, it would go down. Until it went completely down, and he lost his investment. Lessons learned If you can’t pin down the benefit, there may not be one If you cannot explain what the need is for something, chances are that it’s not something necessary and will, therefore, not bring you any benefit. Intelligent people do dumb things Just because you hold someone in high esteem don’t take up their investment advice blindly. You also have to cut through the clutter and not follow mass hysteria. Try to stick to your investing principles. Andrew’s takeaways Do your research Don’t jump the gun on any investment before doing thorough research. Find out just how solid the investment plan is. Had Max taken time to research the cryptocurrency market, he’d have found out that the excitement about Bitcoin was just a hype that would fade out quickly. He’d probably have been able to save himself from making the worst investment decision. Don’t be driven by emotion or flawed thinking It's very common for people who are selling

... The consequences of not doing so can be brutal Guest profile Denis and Katie O’Brien decided to create a “Chain of Wealth” after having a tough conversation about Katie’s debt that was piling up. She had more than US$200,000 of debt that included student loans, a mortgage, a car loan, and negative equity. After hunkering down and reprioritizing what is important in life, they’ve managed to pay off all their debt in less than two years, all while getting married and paying for their wedding in cash! “We often speak about the ostrich technique in terms of payment where you stick your head in the ground and you pretend it’s not there. Don’t do that.” Denis O’Brien Worst investment ever Denis and Katie O’Brien met at a time when Katie was over her head with debt. Before they met, her way of dealing with the lingering debt was to bury her head in the sand and hope that someday it would all go away. Her anxiety over her piling debt was so much that she wouldn’t bring herself to check the mailbox. But the debts didn’t magically disappear. They followed her when she moved in with Denis in Washington DC. When the stack of bills came knocking in the mail one day, Denis decided that she was done burying her head in the sand and that it was time to deal with the debts head-on. Flashback to when all the mess started It was back in March 2015 or 2014 when she was dating a “smooth-talking dude”. It so happened that he needed a car but he had bad credit and therefore, needed someone to co-sign the car loan for him. After a couple of conversations, the smooth talker managed to convince Katie that if she cosigned a loan for him it would lower his interest rate allowing him to save money for other important things. He promised that this would not affect her in any way and he’d make every single payment. The ironic thing is that at the time Katie was driving an old 2002 Toyota Corolla, with all sorts of mechanical issues. She could have done with a new car! But here she was helping someone else to get themselves a new car she could barely afford. From zero car loan to negative equity Finally, she went to the car dealership with him and he picked out a pretty good car. Not a high-end car but still quite good and expensive, well at least for her. After the purchase, he told her that he had negative equity. She didn’t know much about negative equity finance. She knew that it wasn’t something good for your credit but she didn’t quite understand what the consequences were. What she didn’t understand was that after cosigning his car loan she had also inherited his negative equity loan. At this point, Katie had no car loan. She was a 26-year-old graduate, working a normal teaching job and living on her own. As expected, the relationship quickly came tumbling down as soon after the car purchase. As if that was not enough, the dude defaulted on the car payments. It now became clear that Katie had bitten more than she could chew. After chasing him all over trying to get him to make payments Katie finally went to a lawyer as she didn’t know what to do because the car loan was attached to her credit. The lawyer told her she had two options. She could either make him pay for the car or take it and deal with the mess on her own. She came home one night, she was living with her mom at the time, and in front of her house, there sat the car. He told her she could keep the car, it was in her name anyway. Bearing the weight of someone else’s negative equity So now here she had a car that she did not need nor could afford. On top of that, she had to pay off her ex’s negative equity debt of $20,000! This was a lot of money to pay off with a teacher’s salary. To say that she was distressed is an understatement. Other than having to pay off the car loan and equity, she still had to get his name off the title for fear that he could one day come and take the car back after she’d paid off the loan. A helping hand from her family She finally shared her woes with her mom and brother and they both did their best to help her dig herself out of her worst investment ever. Her mom went with her to a dealership to see how to make things better. Feeling like a bozo, she explained to the dealership manager what had happened. Going in, she thought she’d pick out a cheaper car, get his name off of it, and boom, she’s done and life can move on. Boy wasn’t she wrong! The manager told her that she couldn’t get a cheaper car because she had so much negative equity that she needed a car that would be able to cover a loan equivalent to the cost of the car. So now she was looking at $60,000 cars. The lowdown on negative equity on a car The reason why the dealership wouldn’t give Katie a loan was because she had no collateral. So it was high risk for them to give her a cheaper car but with an expensive car, if she defaulted, they’d have more to claim. Katie was now so frustrated that she didn’t even window shop for a car. She just went and pointed at the first car she

Dan Ferris is the editor of Extreme Value, a monthly investment advisory service that focuses on great businesses traded at steep discounts. Dan joined Stansberry Research in 2000 and became the editor of Extreme Value in 2002. Since then, he’s earned a loyal following and an impressive track record. Dan counts more than 20 major financial firms and well-known fund managers as subscribers. Dan has appeared on Money with Melissa Francis, The Willis Report on Fox Business News as well as The Street with Paul Bagnell on Business News Network. He has also been featured in Bearings, the Value Investing Letter and numerous financial radio programs around the country. Dan also hosts Stansbury Investor Hour, a weekly podcast with a mission to help its listeners become better investors. “People can learn futures trading but it’s really hard and takes a long time. Learn it from somebody who’s already done it well for a while.” Dan Ferris Worst investment ever Dan didn’t have a career in finance in mind when he enrolled in college. He studied music and was a classical guitar performance major. He, however, had his eye on investment, which led him on a journey to his worst investment ever. He had a deep desire to learn everything he could about different ways to invest and be a good investor and then communicate that to other people. He eventually got the opportunity to teach people about investing and risk management and he’s been doing that ever since. Naïve zeal to hit it big Dan was once waiting tables before he became the investment guru that he is today. During this period money was a struggle for him. This fueled his desire to become an investor even more. He continued to read stuff about investing and finance. He gained a bit of knowledge in investing and was naïve enough to believe that he was ready to become an investor. He kept his eyes open for investment opportunities that he could afford. Falling for the futures trading trap One day Dan received junk mail in his email inbox containing a program to trade commodity futures, an activity that had becoming pretty famous. The trading program made all these big sexy promises about all the money he could make and he was amazed at just how easy it looked. And just like that, he was sold on the idea! He had saved a total of $5,000. He opened a futures trading account and deposited $2,000. He traded in platinum and gold futures. With $2800 of the balance, he bought a brand new handmade classical guitar, which he still has to date. Unfortunately, the guitar was the only investment that worked. Interest rates went down and his $2,000 became $268 in about six months. That’s right. He watched $1,700 evaporate before his very eyes at a time he barely had any money. Knowledge is power especially when investing Dan was a green young man who barely knew anything about stock markets. He knew nothing about Treasury-EuroDollar (TED) spreads and treasury bills. He did not even have any futures-trading basics. The only investment knowledge he had in this kind of thing was from hearing somebody say that they go up when interest rates are moving in a particular way. The investment program seemed good and easy and backed by his desire to be an investor, he never thought about taking the time to learn about futures trading before putting in his money. This cost him big time. Lessons learned It’s difficult to make money in stocks It is very difficult to make money in stocks. But forex trading is even more complex and should be approached very carefully. If you want to try it out make sure you undergo some (a lot of) forex trading training first. Learn the art of saving money Mastering the skill of saving money is like lifting weights or exercising a muscle that becomes very useful to you long after you’re finished exercising. The skill of saving money will always be useful even in the latest stages of your career as an investor. The art of saving money teaches you the discipline of not spending money blindly and instead, keeping it so that you can put it into good use in the future. Andrew’s takeaways Reduce your risks Investing is complex enough, but if you go into stock markets, forex trading, T-bills and other instruments, it gets even more complex. The key to succeeding as an investor is to keep it simple. Always go for opportunities that reduce your risks. Actionable advice Don’t be in a hurry as an investor. You will constantly be sold to by brokers telling you to get into one investment opportunity or another. You don’t always have to. Take your time before you invest and make a good decision because ultimately, you are putting your capital at risk. No. 1 goal for next the 12 months Dan and his chief research officer Mike Barrett plan to pay more attention to underpriced stocks in the next 12 months. The stock market is currently witnessing one of the biggest shifts since 2009. The cheapest stocks in the market have finally started to perform, while the most expensive stocks a

Some would say, Rick Nicholson, owner of several franchise businesses is a serial entrepreneur because of the seven restaurants he has owned over the past 13 years. He would say he’s just a guy trying to do the stuff he loves to do while trying to make enough money to survive. He hates the term “serial entrepreneur”. He has a strange combination of skills that include a solid understanding of account and marketing, which helps him identify potential business opportunities. He owns three restaurants, a consulting business and is a partner with Wizard of Ads in Austin, Texas. In his spare time, he coaches his son’s AAA baseball team, sits on multiple boards and wonders where the world will take him next. “Just because you say something doesn’t mean it’s going to happen. You need a legal document for everything.” Rick Nicholson Worst investment ever Rick started as an executive in a franchise business. He continuously got excited about hanging out with franchisees and decided that it was time for him to get into the business. He tried teaching entrepreneurs but he still had the itch to be an entrepreneur. An entrepreneur is born He quit teaching and decided to explore available franchise opportunities. He decided to open a franchise restaurant and in no time he was able to finance half a million dollars for his first restaurant. About two or three years later he bought his second franchise in the same group. With two franchise businesses to run, his wife joined him and they ran the two restaurants turning them into the fastest growing franchise operations in the network. The businesses were growing at 43% annually, where the average was about 3%. Scratching the itch to have his franchise businesses While being part of the franchise group was working well for him, the entrepreneur in him wasn’t satisfied. He wanted his own business and create franchise opportunities from it. He always had this dream of owning a coffee shop that he could franchise. With the experience he had earned running the two franchise restaurants, he decided to live his dream. But he was bound by a franchise agreement that contained a non-compete clause. A man’s word is not always his bond Not wanting to violate the non-compete clause, he called the VP of operations and told him about his plan to start a coffee shop. He talked to him about the franchise agreement and whether he’d be violating it by opening the coffee shop. The VP told him not to worry about it and gave him his word that it wouldn’t be a problem. As fate would have it, just when he was ready to open his doors to his first customers, the VP was fired. At this point, he’d already invested $50,000 into the coffee shop. When the new VP came in, Rick called him just to make sure that he was still in the clear to run his coffee shop alongside the restaurants. The new VP sent him a few questions via email to which Rick provided the answers. The VP assured him that there would be no problem, so he went ahead and realized his dream. Word of mouth – no chance against written contracts Six months later, he got a lawyer’s letter in the mail saying that he had violated his franchise agreement. Now you see, Rick is a rural guy from a town where if a man says something that’s taken as a bond and there’s no need to get legal documents drawn up. So he was in total shock when he realized that the VP had gone back on his word. He thought it was probably just a misunderstanding. However, the VP was categorical that Rick had violated the agreement as he didn’t get the board’s approval, a requirement of which Rick was unaware. He certainly should have had legal documents drawn up after the discussion with the two vice presidents. His dream comes to a bitter end Rick’s lawyer was ready to put up a fight against the franchise group but the entrepreneur figured that it would be a waste of energy. So he decided not to fight them. Instead, he negotiated for some time before he could close the coffee shop. The coffee shop wasn’t the only dream that had to come to an end. Rick felt betrayed and disrespected by the franchise group and he just couldn’t continue doing business with them. He simply couldn’t trust people who couldn’t keep their word. At this point, he was so exhausted and he just wasn’t feeling a creative outlet working in this franchise environment. He decided to sell his two franchises. The decision to sell both franchise businesses cost him about $250,000. It was a painful loss and definitely his worst investment. Lessons learned Get those papers signed Rick learned the hard way that just because someone says something it doesn’t mean it’s going to happen. When drafting franchise agreements always make sure that the agreements are executed with legal documents. Legal documents leave no room for ambiguity or misinterpretation. Go ahead and spend that $1,000 and get some legal advice because it might just save you from losing a whole lot more. Andrew’s takeaways Know when to walk away Not

Victoria Lynn Weston boasts more than 20 years of experience as an intuitive business consultant working with professionals and business owners to provide insight to help them make better decisions. This business intuition coach is also an entrepreneur who loves voice technology. She’s the founder of Studio Carlton, which produces and develops custom Alexa Skills for professionals and companies. Victoria is also a producer of PBS-featured documentaries such as America’s Victoria, Remembering Victoria Woodhull and the America’s Victoria Alexa Skill. As an intuitive business consultant, Victoria offers a broad spectrum of insights to help individuals achieve their professional goals. She also encourages people to trust their own intuition. Fun Fact: She used to be known as a corporate psychic. She founded AYRIAL to feature vetted lifestyle consultants such as Feng Shui experts, licensed therapists, intuitive consultants, etc. Individuals can find a consultant on AYRIAL.com or VOICE search via the AYRIAL “Positive Living” Alexa Skill. “Intuitive insight can be invaluable when used as an adjunct to your facts and logic.” Victoria Lynn Weston Worst investment ever Psychic business coach gets a vision Having worked as an intuitive psychic business coach for more than 20 years, Victoria is indeed a master of helping professionals and business owners make better decisions. It is no surprise that now and then, she will have business visions and ideas that she pursues. One of those visions was to produce the world’s greatest psychic reality show. She thought that this idea was going to work, and that it would be magical. Part of it, she admits, was intuition, and another part was a bit of wishful thinking. She decides to trust her intuition She went ahead and took time off her other businesses and concentrated on writing a proposal for the TV show idea. She put blood, sweat, and tears into the proposal, and it was indeed good. She had the visuals and photos in her proposal. She also had this spectacular test that could be done to convince any skeptic that intuition psychology works. She spent so much time analyzing and putting things together. In short, she had thought of everything to make the show a success and had all those details in her proposal. Meeting the bigwigs in the TV industry With her experience and connections, she was able to connect with TV big shots, including ABC producers, MTV producers, the Game Show Network, and others. She held pretty good meetings with the who’s who in TV production and pitched her reality TV show idea. Her sweat, blood, and tears go down the drain Victoria had spent so much time putting together a solid proposal and had managed to pitch her idea to top TV producers. She was sure that one of these producers would endorse her pitch and her show would be on TV soon. Her show did appear on TV but not in a way she would have imagined. A friend called her out of the blue one day and congratulated her on her show that was running on Lifetime TV. She was taken aback as she had not gotten into any agreement with anyone regarding her show. The friend informed her that Lifetime TV was promoting a show using words so similar to her proposal that when she heard the promo in the supermarket, she thought it was her show. Upon further research, she found out that Lifetime TV had come up with a show dubbed America’s Top Psychic. Somebody had stolen her idea. What she came to realize what that while she was pitching, she had given out more information than she should have. The show producers had everything they needed to create a similar show without her. She had given them all her ideas on a silver platter. Nine good months of burning the midnight oil researching and coming up with the perfect proposal all went down the drain. While for most people, the worst investment involves losing tons of money, Victoria’s loss was about time. Even though she had also lost a bit of money spent on the proposal, the pain came more from losing that commodity that can never be earned again – time. To her, the most valuable thing we have is not money; it is time because you can’t take back yesterday. She had invested a lot of time and energy creatively, and now she had nothing to show for it. Lessons learned Curb your enthusiasm Victoria learned one huge risk management lesson from the whole experience; you never show your whole hand. Don’t get too eager and excited about your idea that you share everything about it with the people you’re pitching to. Give them just enough to know what your idea is all about, but not enough that they can run your idea without you. Unfortunately, Victoria’s proposal was so detailed with all the exercises on what to do that it made it easy for anyone to copy it. Protect your material Never trust anyone with your idea, especially in the TV industry. Protect your ideas because TV people are always looking for ideas that they can implement without necessarily hiring you. Let your

Kirk Chisholm is a known risk taker when it comes to investing and alternative investments. Being a person of full will and perseverance to know the ups and downs of the market, he has learned a lot through experience – good and bad. Currently, he is a principal and wealth manager at Innovative Advisory Group, an independent registered investment advisor (RIA) in Lexington, Massachusetts, in the United States. Since 1999, he has used his influence to promote change in different aspects of the wealth management industry, manage risks and provide options for investors. Kirk has been acknowledged by different investment sectors for his passion for learning and imparting them to others. His ideas are frequently sought out by the media. In fact, Kirk made it to Investopedia’s top 100 - at number 7 - as the most influential financial advisor. Moreover, Investment News recognized him as one of the top 10 social media all-stars in the financial services industry. He also is the host of The Money Tree investing podcasts, which aim to teach listeners how to have their money work for them. “The best investors will acknowledge that [truth] and they’ll tell you: ‘I’m wrong a lot. I’m just quick to make a change when I’m wrong’.” Kirk Chisholm Worst investment ever Analyst perspective and promising reports Kirk can has had numerous bad investments, but just like any of us, one will always stand out. Considering its pertinence to the present global economic situation, he shares his story of investing internationally, in a Chinese coal company. Ten years ago, a friend of Kirk’s, who happens to be a financial analyst, visited a coal company in China. His friend and his team saw directly how operations were carried out. They talked to people, did extensive research, and finally drew the conclusion that this investment had a potential for growth once it was regulated and operated by more astute parties. Having read the reports and in the belief that it is always best to have a reliable team of analysts, Kirk was attracted to investing in the company. For him, researching is one of those tasks that must include a lot of due diligence and should be done by more than one person so it can produce thorough and accurate information. Analyst reports on China investment hide painful truth While every box was checked and all operations had been carefully looked into, a short-seller’s report came out of the blue. At first, Kirk did not take this as a serious warning to reconsider his decision about the investment. Based on his experience, short-sellers are not always reliable. He was also looking for a yield potential of 36% on selling. However, at a certain point, the company halted trading and he tried to limit his losses but to no avail. He found out that the reports presented to him were dishonest. The company had failed to disclose that the company’s shares were used as collateral in order to secure a loan from a private equity firm. Technically, the shares on the US exchange were worthless, and a great deal of money was lost. Poor research and cultural differences This was the point of no return. Kirk had already invested and his money was nowhere to be found. He could have chosen to report the matter to the authorities and file a lawsuit, but the company was on the other side of the Pacific, which made that option extremely difficult and cost prohibitive. Moreover, he believes that cultural differences played a major part in his failure. A property right is treated with as much respect in China as it is fundamental in the US (and most of the developed world). Lessons learned Risks are inevitable As an investor, Kirk is aware that no matter how prepared a person is in a new venture, risks are always there. Likewise, with investing internationally, the risks are greater and mostly beyond research. Risk management is essential in order to plan for, avoid and guard against loss. He has learned to acknowledge these risks and turn them into a beneficial lesson. In some cases, he encourages people to use other options and explore them before sealing a deal. Alternative investments are good, but the risks involved should be considered in advance. Home-country bias must be considered well Investing internationally made Kirk realize that everyone places more importance in areas they are familiar with – their home turf. The cultural differences between investors and companies should be assessed first since what is significant for you may not be as precious to members of another culture. Statistics show that investors are much more likely to pour their money into businesses in their own country. So, for you to manage your risk, look for investment opportunities in your country first before exploring other lands. Invest in what you know Kirk quotes Former Fidelity fund manager Peter Lynch, who wrote phenomenal books in the 1980’s and 1990s, such as Learn to Earn, reiterating the lesson of staying within your comfort zone (your home country)

Raoul Pal is a former hedge fund manager who retired at 36 and is co-founder of Real Vision, a financial media company offering in-depth video interviews and research publications from the world’s best investors. He has run a successful global macro hedge fund, co-managed Goldman Sachs’ hedge fund sales business in equities and equity derivatives in Europe, and helped design the BBC TV program Million Dollar Traders, training participants in investment and risk management strategy. Raoul retired from managing client money and now lives in the Cayman Islands, from where he manages Real Vision and writes The Global Macro Investor, a highly regarded original research service for hedge funds, family offices, sovereign wealth funds, and other elite investors. “Have a framework, use your framework. But do test your framework because it does change. Your framework will keep you on the straight and narrow.” - Raoul Pal Worst investment ever On top of the global macro hedge fund game Raoul started The Global Macro Investor in 2005. He was managing his own money as well as advising many of the world’s top hedge funds, family offices, sovereign wealth funds, etc. He had a pretty good first year out of the gate. His business did phenomenally even in the second year. He was at the top of his game. Around 2007, having understood how the market works, he switched from a long emerging market position to a short emerging market position, a decision that scaled his business to success. By 2008, he had made a huge reputation for himself because his business was thriving and he’d lived and breathed the Asian financial crisis. Where macro is concerned, Raoul had made it. Surviving the global financial crisis The global financial crisis hit the global markets in 2007 and 2008. Most hedge funds barely made it out alive but Raoul was one of the hedge-fund investors who survived the crisis during these years. How did he do it? Raoul has a framework through which he follows and analyzes global economies. It is the framework that allowed him to nail the whole situation going into the crisis. Most economists build a linear model of GDP, which Raoul believes is ridiculous. He’s more of an applied market economist. Raoul’s framework involves observing markets in conjunction with economies and looking for opportunities between the two. The framework worked for him because when you look at the yearly rate of change of oil, gold, copper, the stock market or emerging markets, they’re all the same, they’ll go up and down with the US business cycle. So he’d use something like the Institute for Supply Management (ISM) supply management survey, a poll of purchasing managers in the US, to give him an idea of whether they are more or less confident in the economy. This helped him sail through the storm. Overconfident, he ignores his faithful framework Come 2009, things were different. No one was sure whether they were through the worst of it or not. At this point, unlike the other times, Raoul ignored his framework, which was suggesting that the business cycle had probably bottomed out. Not certainly, but probably. In his view, some hurdles could worsen the cycle. He believed that it was going to go lower. While his framework was telling him that the business cycle would not bring him any return, he believed that there would be probabilistic outcomes and that risk would return to the markets and he’d make some recovery. This never happened. After a series of four years of the best returns he’d ever had, 2009 became by far the worst year he’d ever had investing, and in advising. The market never recovered that year and so his investment didn’t bring him any of the returns he had calculated. Eurozone crisis comes knocking Raoul was able to recover from the worst investment of his life, but psychologically it took a few years to regain his faith. The 2012 Eurozone crisis made it even harder for Raoul to recover from his loss. During that crisis, he was living in Spain. Things were so bad he was having to buy food and store it. The markets were shaky and there was no guarantee that the banking system would last. Greece had imploded, and the Cyprus banking system had shut down entirely. So it was an extraordinary time. It was hard to escape the psychological trauma of the loss he had incurred in 2009. Thankfully, he was able to return to his hedge fund management glory in 2013, 2014, and 2015. Lessons learned Put odds in your favor Nothing is a certainty so always put odds in your favor and not against you. Raoul admits that he should have seen something negative in the market and taken on less risk than he did. Luck doesn’t always strike twice The very thing that has given you the best returns of your life is the very thing that can bite you. Raoul had gone against the crowd several times in 2007 and 2008, and this had made an extraordinary return for him. So understandably, after winning consistently, he became overconfident. He went into that phase

David Barnett is a three-time best-selling author, consultant and business coach who has been working with small-business owners for more than 20 years. For the past 10 years, he has been helping people buy and sell businesses. David works directly with clients and produces online education products to teach aspects of small business purchase and sale transactions and local investing. “(As one progresses in doing business) The deals keep getting bigger and we need these little ones to teach us not to make mistakes when we get into the big ones.” David Barnett Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Background on value-added taxes in Canada David was approached by an entrepreneur he knew quite well who had run several businesses. The latter was building a new business. In Canada, they have a value-added tax called the HST. When a business buys goods it pays HST, when its sells goods or services, it collects the HST, and then business then sends the difference to the government. So when building a business, the founders have to lay out all kinds of money. All of the contractors and suppliers are charging new tax, but the founder has yet to make a sale. So a business pays paying out money in taxes, and it is not returning. Usually when a new businesses is founded it gets a check from the government because when it files a tax return, it has overpaid sales taxes versus what it has collected, and David had been through this many times. Deal done to pay partner’s advance and win off the government rebate In the first filing for a business, the business should get a check back from the government. After that, if it is doing well, it sends money to the government. David’s partner started to run short of cash in building the business because there were unexpected events and he had extra expenses. He offered to sell David and his investor group his HST return at a discount. So the idea was that the group would give the partner an advance and then, within three months, this money would come back to the group because the return would come in and the group would be paid. So the group proceeded. Once business was operating there was more to learn about tax liability David then started to learn more about how the government processes HST. It turned out that when the figure is high enough, the government do not blindly issue checks, it looks at the company more closely. So a few months went by and the government wanted the partner to submit some of those bigger invoices. So he did and when it found out the nature of his business, that there was a lot of cash involved, it required him to do anti-money laundering training, so the partner would become aware of current rules and laws. By this time, it was month five, and because there was so much cash in the business, he had to go through the training. So the group has gone from the business being built and all the money was going out to active operations. But the government withheld the money due to the business because it wanted him to send in more information. It wouldn’t release the funds because he had to do the money laundering training. Business had failed to send in payroll tax, which killed the investment’s chances Sadly, the business’ sales failed to come in as fast as was forecast, and another problem was that the partner had failed to send in source deductions – There were no income tax deducted from employee paychecks. By the time month six had come along, and the tax office was ready to return the HST, it didn’t, because it did some final checks and found that the business actually owed the tax office money. David loses faces with his investor group over loss of $25,000 David had not been entirely comfortable about doing the deal. So he had invited two friends to join him in the investor group. Now he had to face them and give them the news about all these problems that had been dragging on, and of course about the loss of the $25,000 they have put in. He admits he felt quite stupid in front of his friends and for the fact he got involved in the first place. He had failed to make himself fully cognizant of all the potential hazards that could have come about by doing this kind of thing. He was embarrassed and felt bad about inviting friends along with the deal. After two years though, they were all able to write off the loss as it had become an allowable business investment loss. So they were able to offset some other gains with it. But he feels embarrassed also that he had been a person who had written a book on how to successfully invest in small local businesses. It was a hard story to tell and one had not been ready to tell until on this occasion. “There always has to be a clear path to a Plan B … some kind of security or collateral against somethi

Andrew and Chance would like to dedicate this podcast to peace “I stand for life against death; I stand for peace against war.” Pablo Picasso Picasso’s Dove became a symbol for the Peace movement after it was used to illustrate the poster of the World Peace Congress in Paris in April 1949, part of the series of conferences held at the end of the Second World War (also in Wroclaw, Sheffied and Rome). At the 1950 World Peace Congress in Sheffield, Picasso made a brief speech recounting how his father had taught him to paint doves, which he concluded with the quote above. Photo: Tate Gallery, London, 2004 Guest profile Chance Glenn is an innovator and entrepreneur who has been engaged in creative pursuits for the better part of his life. He holds a bachelor of science and a master of science degrees, and a PhD, all in electrical engineering, and has patents and publications in a host of focus areas. He is the president and founder of Morningbird Media Corporation, where he and his colleagues have developed and prepared for launch the Electronic Alchemy eForge, a 3D printer capable of producing functional electronic devices. His team has utilized support from NASA to take this from product from concept to commercialization. In addition to his technical pursuits, he is a tenured full professor, provost and vice-president of academic affairs at the University of Houston-Victoria (Texas), a practicing visual artist, and a Grammy-nominated singer/songwriter. “I got involved with bitcoin ... early. And I’m talking about when it was a couple of hundred dollars.” Chance Glenn Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Bitcoin foray holds investor’s attention on a daily basis Chance got involved with Bitcoin early, when it was valued at around US$100 a coin. It was one of his first investments when he bought his first batch of around five or six coins and he watched as they continued to grow. As he followed the progress of this new currency he felt he never knew where it was going to peak. He was too inexperienced to know how to tell when a downturn was about to hit, and he shared that if tracking something closely like this in the manner of a day trader, when it falls even a little, he felt panicky. Slight downturn is spooks so Chance retreats So he pulled all his money out when Bitcoin was at about $900 per coin. He had made about 10x the money he had invested at that point. After that, he would watch it rise to $14,000 per coin in the next nearly four years and he notes that now it is hovering around the $10,000 mark. The next time however he looked again it was well over $3,000, so he felt he had missed the boat and he probably could have made 100,000 if he had cashed out at the right time. Not so much a bad investment as a bad decision Aside from the loss, he pointed out that it was not the investment that was bad, but more like the decision was bad. The lesson he therefore takes away from the experience is to have the courage in future to sticking with something. Of course he raises the question of how long and how to you tell how long you must stick with something and then when do you jump out. Something good usually comes from failure He said however, “Here’s the good news!” What he did make he actually took and used as a seed investment for what became his current project, Electronic Alchemy and its eForge 3D printing device. So this mistake truly led to what he is starting to build now with his company, which is creating something genuinely revolutionary. He was able to use that money and do some of the preliminary work. But, he again revisits the pain, and says if he had stuck with it, he could have walked away with US$100,000 from Bitcoin investment. “It wasn’t so much that the investment was bad. It was the decision that was bad. Chance Glenn Lessons learned Having the courage to stick with an investment is important No risk, no gain. Chance learned how important is to be willing to take the risk and not just play it so safe. He thinks now that he was playing too safe and that this was a strategy issue. He was not risking too much, he had put in an amount that he could get away with losing, he hadn’t put his family in danger and there were no other such issues. But he says that if he had stayed with it, and was courageous enough, and had used some profit-taking strategy, he could have done a lot better. He was however the victim of panic when he saw it was correcting. Andrew’s takeaways Have a plan So you know, if you have a plan it may have but not sure. Could it could have allowed you to say Nope, I’m sticking with this I’m not selling because I believe that Bitcoin is the future of da ba ba. And therefore, I’m going to stick with that plan. So one. And what we find oftentimes in the world of fin

Johnny FD (Fighter-Divemaster) grew up in San Francisco, in the US state of California, and quit his job at corporate giant Honeywell in 2007 to move to Thailand, travel the world and work as a professional scuba diver. While in the Kingdom, he started training and fighting professionally in Thai kickboxing. He has since written two books: 12 Weeks in Thailand: The Good Life on the Cheap and Life Changes Quick (both on Amazon), started multiple six-figure online businesses and since been has been interviewed and featured in Forbes, Business Insider, Fast Company, Entrepreneur, and the BBC. “The reason why it’s such a bad idea to leave money in cash is you’re guaranteed to be losing at least 2% due to inflation. So even if your money is technically safe in a checking account or savings account, and you’re not gaining interest, you’re not losing money, you are losing, you know, whatever the rate is, which is usually around 2%.” Johnny FD Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Johnny outlined a trio of mistakes Buying crypto and losing He named his most annoying investment ever was buying cryptocurrency and Bitcoin, and described the pain of seeing it crash. He still holds some Ripple because he simply hates selling it at a loss. He blames the Fear of Missing Out (FoMo) phenomenon for some of his exposure and relates the tale of buying in to Bitcoin when it was valued at US$18,000, just because of the FoMo effect amid the hype even against his gut feeling that it was not a good investment. Peer-to-peer lending ties up money Johnny also described getting into peer-to-peer lending via the Lending Club and finding out that it just tied his money up for five years. In that time, he just witnessed all the money he had disappear as loans defaulted one after another. He felt trapped and could not only not retrieve his money, but people were just flaking out on paying the funds back. He bemoaned the essentially and completely unsecured nature of the investment. Cash is not king in this context His number one of the trio though would be one big mistake he made that has recently been in the front of his mind – keeping money in cash or not investing it for the past few years. He did this based on the widespread idea that the market was due to go down “any day now” and that the world was due for another big crash. But, for the past two or three years, this crash is yet to happen, and he has lost the opportunity of all the potential gains he could have made on decent investments. He identified why it is a bad idea to leave money in cash is because you are guaranteed to be losing at least 2% due to inflation. “So even if your money is technically safe, in a checking account or savings account, and you’re not gaining interest, you’re not losing money, you are losing whatever the inflation rate is, which is usually around 2%.” Johnny FD Storing savings in cash means further losses The second part of loss in keeping money in cash is the forfeiture of potential gains, Johnny said. Even if the stock market fails to grow over a year, in the years he just kept cash, he was still missing out on dividends. They might have been another 1% or 2%. So right there, he explained, he was losing 2% on the inflation, 1% or 2% on the dividends that would have been paid out, which would have been either re-invested into your account, or cashed out on. Then there are the potential losses. On average, the stock market goes up by 7-8% a year, he pointed out. And he sat out on that, but also, in the past few years, the markets have gone up even more than that. So keeping a significant amount of money in cash was losing money, “almost like a bucket with a slow drip”. He said that it was almost to a point that he was holding on to a liability because the cash was not really an asset any more. Some lessons On crypto Don’t fall for the FoMo Just don’t feel like you’re missing out on any wild gains because you’re not jumping in to something that looks really attractive. Slow and steady wins the race Instead, his strategy now is slow and steady wins the race. If he can grow his portfolio by 7% a year for the rest of his life, he will be very happy with that. On peer-to-peer lending For such investments, Johnny is still a fun, but he has learned. He still has quite a chunk of money in this class, but now he only gets involved if the loans are secured by real estate. If the people he lends to (invests in) don’t pay of the loans, he repossesses their house, sells it and get his money back. Alternatives are there if we look for them and learn There are always alternatives. Would-be investors just have to listen to podcasts, ask people, do the research to figure out how much return you’re going to get. Why give people money in an unsecured loan w

Andrew Sherman is a partner in the corporate department of Seyfarth Shaw LLP, and serves as the corporate office chair for the Washington DC team. He focuses his practice on issues affecting business growth for companies at all stages, including developing strategies for licensing and leveraging intellectual property and technology assets, intellectual asset management and harvesting, and international corporate transactional and franchising matters. He has served as a legal and strategic advisor to dozens of Fortune 500 companies and hundreds of emerging growth companies. He has represented US and inter-national clients from early stage, rapidly growing start-ups, to closely held franchisors and middle-market companies, to multibillion-dollar international conglomerates. He also counsels on issues such as franchising, licensing, joint ventures, strategic alliances, capital formation, distribution channels, technology development, and mergers and acquisitions. Andrew has written nearly 30 books on the legal and strategic aspects of business growth, franchising, capital formation, and the leveraging of intellectual property, most of which can be found via his author page at Amazon. He also has published many articles on similar topics and is a frequent keynote speaker at business conferences, seminars, and webinars. He has appeared as a guest commentator on CNN, NPR, and CBS News Radio, among others, and has been interviewed on legal topics by The Wall Street Journal, USA Today, Forbes, US News & World Report, and other publications. Andrew serves as an adjunct professor in the MBA programs at the University of Maryland and Georgetown University law school and is a multiple recipient of the University of Maryland at College Park’s Allen J. Krowe Award for Teaching Excellence. “Things happen when people sell their business, closely held companies, entrepreneurial companies – they run around and make a series of business decisions. Some of those decisions are actually diminutive of value or dilute of a value and accretive of value. But because you have chosen to surround yourself only with people that are like the Emperor’s village, and no one’s telling you, ‘Hey! This is a bad decision’ or ‘Hey! This decision could really affect the enterprise value if you were to go sell you are the Emperor’.” Andrew Sherman Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever This episode features a slightly different format As Andrew Sherman has so much experience in the space of businesses, selling businesses and intellectual property and other types of property rights, our host thought it would be a great opportunity for his guest to go through some of the mistakes people have made in this arena that he has seen over the years. Enjoy! ‘Don’t call my baby ugly!’ or ‘DCMBU’ Andrew Sherman compares being in the park and seeing a mother with a baby in stroller and the social necessity of always having to say “Oh my God, what a beautiful baby”, with being the owner of a business and trying to sell it. Perhaps your “baby” is not attractive. Which doesn’t mean it may not be attractive in future or in the buyer’s arms but the first big mistake (1) a seller can make is to be overly defensive about their business. For many sellers, the business is their child, and they can have put more time into building that business than they have in raising their own family. Be ready for Spanish-inquisition-type scrutiny So if people are going to be selling their business, failing to be ready for the exposure and criticism that comes with putting their business up for sale is a huge mistake. He urges sellers to remember that due diligence in the post-Madoff, post-World Com era means that the depth and breadth of questioning the seller about all aspects the business for sale is extremely extensive. Andrew says it slows down transactions and makes them more expensive. Have checklists and humility about your ‘baby’s’ value Such scrutiny though can have a considerable psychological impact on sellers and the response can be defensiveness when people are questioning every business decision that they have made on every customer, channel, relationship, intellectual property action. He says: Be ready for this process. Have a data room, checklists and the right advisors, but also try to attain a mental state that admits not every buyer will think you have the most beautiful business in the world. “In fact, most buyers and buyers counsel and their advisors are trained and are paid to find the flaws in your business.” Andrew Sherman ENC syndrome Andrew spoke here about an issue similar to DMCBU, but one that is slightly different it speaks to leadership, governance and culture. ENC stands for The Emperor’s New Clothes, from the Hans Christian Andersen child

Todd Tresidder is the author of seven personal finance books with an eighth coming out shortly. He created a course on strategic wealth planning and is the founder of FinancialMentor.com, a popular personal finance site. He is a self-made millionaire and was financially independent at age 35, which was more than two decades ago. Since then he’s been coaching clients on how to do the same giving him an unusual depth of experience. Todd has maintained his wealth by remaining an active investor and utilizing statistical and mathematical risk-management systems for investing. Through FinancialMentor.com he teaches advanced investing and advanced retirement planning principles. Take the next step beyond conventional financial advice and discover what works, what doesn’t, and why, based on years of proven experience. “So he had all kinds of great stories about how this company was going to the moon and he didn’t understand the setback but this company was going to fly and I was a stupid kid and I bought it hook line and sinker and I put even more money into it. So I made this stupid mistake of averaging down on a loss you know chasing good money after bad and eventually went to zero, and I lost everything.” Todd Tresidder Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Graduate joins HP, friend in credit department offers hot stock tip Todd made his first and worst investment when he fresh out of college. Holding a fine résumé for a new graduate, he had been the business manager for campus businesses. It was the mid-1990s and he had read the book In Search of Excellence, by Tom Peters. He went straight from college to work for HP, one of the top companies employers at the time, and had a friend in the credit department. One day during a lunch-time chat, his friend told him about a new company they were working with that was buying HP mainframes, and they were listed in the pink sheets on the Nasdaq. Todd’s friend had put his money in the company’s stock after doing financial analysis on the company and all this. ‘Inside scoop’ meant he put in all funds he had saved for his MBA course So Todd felt this was a “cool insider scoop” on this “amazing emerging company”. The company had an algorithm that was dominating how mail was going to be sent. Todd said “it sounds so absurd now, but it sounded cool at the time”. He had been busily saving for tuition fees to study for an MBA after paying his own way through school, and was still trying to pay off his college costs. He was also saving some money but chose instead to stick his savings into the pink sheet stock. Initially, it went up. But he neither knew anything about how new stock issues work or about how this business worked. So he also had no idea that it was standard protocol for new issues to promote them in an over-the-top way to get people excited about the stock, that it was “going to the moon”, in order to create demand. Todd was in early enough to see an initial rise in the stock, and he kept pumping more money into it. The more he had, the more he would invest, thinking this investment was going to pay for his further study. Stock price turned and broker talked him out of selling He then watched his investment fall to zero Then suddenly it turned and started going down. Magically, the stockbroker called Todd (as though he could read Todd’s mind) and “had all kinds of great stories about how this company was going to the moon. And that he didn’t understand this setback, but this company was going to fly and I was a stupid kid”. Todd bought the broker’s story and put more money in. He made “this stupid mistake” of averaging down on a loss, chasing good money after bad and eventually it went to zero, leaving him with nothing of his original investment. That was Todd’s first and worst investment ever. So for his very first investment I lost everything. But it did set him on a course to learn everything about how to stop it happening again. “It was only in hindsight, as I started to learn (about finance and investing), that I realized the depth and the level of all the different mistakes I was making.” Todd Tresidder Lessons learned Don’t buy on hot stock tips Don’t risk money you can’t afford to lose Don’t buy a story If you think about it, you are actually buying a business, so if you are going to buy based on any sort of fundamentals, it better be business fundamentals. You must must must have a risk management plan in place This must include an exit strategy Don’t play a game that you don’t fully understand. Todd was in the new-issue market, which is a very specialized game. There are rules by which that game is played by and he admits violating them all “with pure stupidity”, because he did not know the game. Don’t confuse brains with a bull market Which

William Manzanares IV was born and raised in the Tacoma area of Washington State and is an active member of the Puyallup Tribe. He is a serial entrepreneur, having owned and operated successful smoke shops, convenience stores, and restaurants since 2005. William is passionate about helping small business owners as well as struggling readers. To that end he has written I Can’t Read: A Guide to Success Through Failure, telling the story about being unable to read as a youth and struggling with dyslexia, William hopes his new book will equip kids to improve their literacy and inspire them to pursue their dreams. He spends much of his time speaking with students about career planning and goal setting. “I was excited. He offered high returns … and an equity stake in everything in the business. He talked a big game of how he was publicized everywhere and I said … ‘Okay, let’s do this’ … He did say after signing … checks that were written out in the contract, I’ll just pay you big chunk payments. So I got like a $5,000 payment, then a $10,000 payment … that took about six months to get those and then when a final payment bounced and I think he tried to write me another $15,000 check, it just didn’t go through. This was like six or seven months after I gave him the money and I went: ‘Oh, what did I do? (What have I done?)” William Manzanares Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Meets publisher selling Super Bowl tickets Will met the publisher of a local weekly newspaper who was also the PR representative for his native American tribe in Tacoma because he said he could get all kinds of tickets and Will wanted to take his daughter to see the Seattle Seahawks American football team play in the Super Bowl for the second time in its history. The guy was always around talking about his connections and that he always knew someone who could get show tickets to anything. Will let his guard down. Will invests US$60,000 in regional newspaper The man then started talking to Will about signing up other cities for his newspaper business, that he had just signed up another city and that he needed some investment money to sign up more cities in the Pacific Northwest region. The amount required was US$60,000 so will loaned it to him and got a lawyer to draw up a contract for the deal. Will was excited as the publisher was offering an equity stake in the business, high returns and “he talked a big game of how he was publicized everywhere and I said … ‘Okay, let’s do this’ … He did say after signing … checks that were written out in the contract, I’ll just pay you big chunk payments. So I got like a $5,000 payment, then a $10,000 payment … that took about six months to get those and then when a final payment bounced and I think he tried to write me another $15,000 check, it just didn’t go through. This was like six or seven months after I gave him the money and I went: ‘Oh, what did I do? (What have I done?).” Sees state of the accounts, realizes his money is gone Will called the publisher, inherently wanting to be a nice guy, and the principal made excuses, said he was sick, blamed everyone else but himself, but in the end let polite and persistent Will into the company’s offices to consult and maybe try to save the company. Will then spent half an hour with the bookkeeper (while talking to Andrew he admits he should have done this a long time ago). After he saw the books he realized he was never going to regain his money. The principal owed printers and many other people. He also was the public relations guy for Will’s tribe, so he had been telling people including Will that the tribe owed him a lot of money, and the tribe has a multimillion-dollar casino, so people thought they had the revenue. Thinking ‘success the best revenge’, Will starts his own So will did what some entrepreneurs would do, and instead of getting mad, decided to get even by starting his own online publication called Grit City, after the nickname they have given Tacoma. What he discovered was publications in start-up phase do not make money, so essentially, he was funding this new venture and in so doing, was throwing good money after bad. His CFO also told him later about sunken-cost fallacy. He had already lost so much money with the other weekly paper owner and he was sinking money into the new publication. One day he decided he could not continue, and as a gift, handed the business to his partners, and walked away, another $60,000 out of pocket. While his former partners made the publication work, Will will never make any ROI from any of the decisions he made. One small satisfaction though is that soon after he left Grit City, it was outranking the publication of the con artist he had had dealings with originally. Lessons learned Do due dilig

Shawn Walchef is a restaurant owner, digital entrepreneur and a proud father. Since 2008, Shawn has owned Cali Comfort BBQ in San Diego County. In order to survive, Shawn knew early on to operate his family restaurant and sports bar like a tech company. Now whether it’s his annual #BETonBBQ “Turf and Surf” tasting event in August or his expanding catering empire in San Diego, Shawn’s many business ventures all incorporate technology, especially the kind you use everyday on your cell phone. That’s how he discovered podcasting. Since Shawn first started a business and BBQ-themed podcast almost three years ago, he’s watched podcasting grow, with many shows popping up that he’s helped inspire. Shawn has played a big part in getting so many fellow BBQ business owners into podcasting. Listen today to his Behind the Smoke: BBQ War Stories podcast where he guides viewers and listeners through the ever-evolving world of digital marketing and this helps his fellow restaurant and business owners adapt and succeed. Shawn will begin releasing weekly audio and video episodes in the fall of his new Digital Hospitality podcast. On the show, he and his guests will get personal and truthful about what it takes to truly thrive in business, sharing advice on social media, blogs, and digital tips and tricks. The show will also explore topics that aren’t usually discussed on a business podcast like health and wellness. To find episodes, educational blogs, and behind the scenes content online at CaliBBQ.Media. “Basically, he wanted me out and he wasn’t going to pay me back. He wasn’t gonna pay me back the money, and he was going to keep the liquor licence. And you know, at that point, I had never been spoken to like that in my life. I had trusted him. My business partner, Corey, my best friend at the time, we had trusted him, we had put all of our hopes and our dreams into this restaurant business. But we did it in a way that we had no control.” Shawn Walchef Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Grandfather trusts him to run real estate business Shawn never knew his father, but learned a great deal from his medical doctor grandfather, who raised Shawn with of course the help of his grandmother and mother. From a very early age, his he taught Shawn that hard work is good, but that hard work and education would get you ahead in life. Shawn grandfather also sent him to university in Colorado and Alicante in Spain. During his time abroad, his grandfather asked him to return to San Diego as he had been made the trustee for grandpa’s estate as Shawn was the only person he trusted. After his grandpa retired as a medical doctor, he had started investing in real estate. So he needed help with his real estate business so Shawn transferred to the University of San Diego. This allowed him to spend time with his grandfather, to help him write his memoir, and to just be there to learn from him, about his life and business. Attempts to enter law schools fail Shawn thought he was going to be an attorney, so he took the L-sat, studied very hard, and applied to law school. He was rejected by all three of San Diego’s law schools, which hurt a great deal. Then his best friend who was with him in Spain moved to San Diego and Shawn suggested Corey help Shawn manage his grandfather’s real estate, which they did around 2006. Early on invested eatery with liquor license Grandpa had purchased a property in East County, San Diego that had an existing restaurant, which had a liquor license, a type-47 liquor license, which allows you to sell beer, wine, spirits at an existing restaurant space. The license is very valuable in the San Diego market. They thought, if someone wants to open a bar, or restaurant, anywhere, the profit is in the liquor, which was a very attractive proposition for the two budding business partners. They decided to purchase the license for their grandfather. So at the time was valued at US$75,000, but they bought it for $50,000. They also raised another $50,000 so that they get into the restaurant that was being operated by a man named Howard. He had been operating a breakfast restaurant and Shawn and he had become friends. Howard was looking to expand his business so the boys said they would add the liquor license and help by including a dinner service and turn it into a sports bar. Boys take 49% share in restaurant with ‘Howard’ The deal was this: Howard would run the restaurant and he would have majority interest, a 51% ownership stake in the company. Shawn and Corey had 49%. Young and naïve, and not knowing Howard nearly as well as they should, the boys started working, making capital improvements to the business, adding flat screen TVs, adding products so that they could create a dinner menu, and adding staff. Howard

Ted Seides, CFA, is the son of a teacher and a psychiatrist. Perhaps by genetic disposition, he is passionate about sharing his insights and investing in people. He is the chief investment officer of Perch Bay Group, a single-family office he joined in 2017 to manage a diversified portfolio of direct and fund investments across asset classes. Ted produces and hosts the Capital Allocators Podcast, which by the by the end of 2018 had reached one million downloads. From 2002 to 2015, Ted was a founder of Protégé Partners and served as president and co-chief investment officer. Protégé was a leading multibillion-dollar alternative investment firm that invested in and seeded small hedge funds. Ted built the firm’s investment process and managed the sourcing, research, and due diligence of its portfolios. In 2010, Larry Kochard and Cathleen Ritterheiser profiled Ted in Top Hedge Fund Investors: Stories, Strategies, and Advice. Sharing the lessons from his experience, Ted authored So You Want to Start a Hedge Fund: Lessons for Managers and Allocators in February 2016. He began his career in 1992 under the guidance of David Swensen at the Yale University Investments Office. During his five years at Yale, Ted focused on external public equity managers and internal fixed-income portfolio management. Following business school, he spent two years investing directly at private equity firms, Stonebridge Partners and J.H. Whitney & Company. With aspirations to demonstrate the salutary benefits of hedge funds on institutional portfolios to a broad audience, Ted made a non-profitable wager with Warren Buffett that pitted the 10-year performance of the S&P 500 against a selection of five hedge fund of funds from 2008-2017. Ted is a columnist for Institutional Investor, wrote a blog for the CFA Institute’s Enterprising Investor, and wrote guest publications for the late Peter L. Bernstein’s Economics and Portfolio Strategy newsletter. He is also a trustee and member of the investment committee at the Wenner-Gren Foundation, an active participant in the Hero’s Journey Foundation, and is a decade rider with Cycle for Survival. He previously served as a trustee and head of the programming committee for the Greenwich Roundtable and as a board member of Citizen Schools-New York. Ted holds a BA in economics and political science, Cum Laude, from Yale University and an MBA from Harvard Business School. “It was one of those examples that the market can stay rational longer than you can stay solvent, and that really anything can happen. There was nothing about the fundamentals of these assets that would have told you that this could have happened.” Ted Seides Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Ted chose one of his worst investments ever based on its outcome. In 2002, during his early years at Protégé Partners around the launch of that fund, one of the core investments they were making was in a multi-manager hedge fund portfolio. Within that portfolio, one of the core investments was in a relative-value arbitrage hedge fund called Parkcentral Global Hub. Principled fund group included Perot family It was a group that had spun out of or was included in the family office of the late Ross Perot. And the group had been managing its strategy for a long time very successfully in a kind of value-oriented, relative-value manner with a very long time horizon. There was a tremendous amount of co-investment (a minority investment made directly into an operating company alongside a financial sponsor or other private equity investor, in a leveraged buyout, recapitalization or growth capital transaction). Perot had put around US$500 million into the fund and there were highly skilled people running it. Seides said it was a rare case of an investment management organization run with great business principles. Fund launches in 2002 and grows to nearly 3bn in assets The fund launched to outside investors in July 2002, growing to US$2-3 billion in assets until they closed it to new investors. It continued to progress well under the goal of making 10%-12% a year with relatively low volatility. And they had done that historically. They found new structures and strategies, were very insightful and had good communcations enabling investors to know exactly what was going on. Few blips in Spring 2008 but nothing major But, heading into Spring 2008 the situation became shaky for them. A few things went wrong, but they were within the bounds of their understanding of risk and in the summer and into the fall, they would come by the office and said their largest position was a relative-value trade in the commercial mortgage-backed space. Out of the 2008 crisis, most people remember that subprime residential mortgages blew sky high. But in the comm

Michael Oyster is the founder and CIO of Oyster Capital, a multifaceted investment advisory organization dedicated to providing customized solutions for planners, advisors, investment managers and asset owners to assist in the achievement of all types of investment goals. Previously, Michael served as senior quantitative analyst with options advisory firm Schaeffer’s Investment Research conducting research on options, markets and behavioral metrics, as well as managing proprietary options-based investment strategies. He joined investment advisory firm Fund Evaluation Group (FEG) in 1999, and began researching traditional and hedge fund managers as well as conducting topical research on markets and the economy. As FEG’s chief investment strategist, Michael served as a thought leader and frequent presenter on markets and the economy. Michael is the author of countless papers as well as two books: Mission Possible, Achieving Outperformance in a Low-Return World, which was published by Dearborn Trade in 2005; and his new book, Success in a Low-Return World was published by Palgrave Macmillan in November 2018. Michael is a graduate of the University of Cincinnati with a BBA in finance, a CFA charterholder, and a CAIA charterholder. “Now I’m thinking this is the worst possible case scenario. And it really ended up being a terrible situation because everything that I had put into the portfolio that I thought was a terrific long term investment turned out to be absolute garbage.” Michael Oyster Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Portfolio chief has final say on what goes into investment packages In the middle of 2014, Michael was head of the portfolio management team at FEG, a very good group of talented people who advise institutional investors, and non-profit institutions, which are mostly endowments, foundations. His job at the time was to build portfolios for the clients that gave us discretion. Within a range of asset allocation targets, he and his team could build portfolios out of whatever investment ideas they thought were going to make the best return on investment with the least amount of risk. He was the primary investment person, part of a team, but he ultimately was responsible for the decision on what was the best for the portfolio. Based on firm’s philosophy, portfolio is diversified well His firm believed: it should take a very long-term approach with investing; valuation criteria should drive investment decision, that portfolios should be built out of cheap investments, not expensive; and, in the importance of diversification in portfolio construction as it is a good risk mitigator that opens opportunities to other areas of the investment world that you might not otherwise consider. Philosophically, that is where Michael and his team were starting. At the time, his investment choices were diversified into such directions as domestic equities, international equities, emerging markets, many types of fixed income, commodities, master limited partnerships, and real estate investment trusts/ Expected win with big weight in cheap emerging market stocks Michael was satisfied. They had a large allocation to emerging markets, because in mid-2014, emerging markets stocks, relative to US stocks in particular, were about as cheap as they had ever been. They had a triple weight relative to targets in emerging markets, so they thought when things turn upward, it will be a big score and they will make a killing. Suddenly, with US oil flooding global markets, the price collapses But then in the second half of 2014, something terrible happened for Michael’s portfolios. It was the beginning of the United States’ flooding of international oil markets with increasingly more capacity, and the start of the realization of what US fracking was doing to unlock the massive amount of supply coming out of the country. So the oil price collapsed. The price of oil is inversely correlated to the US dollar, meaning that the dollar rose strongly in value. Commodities, emerging markets in portfolio make for triple blow So now he has two facts working against him. He has commodities in his portfolio (for diversification) and they are being crushed as the price of oil is collapsing. All the while, the dollar is strengthening, meaning all his emerging markets and other international investments are affected as in the value of currency in those offshore spaces is weakening rapidly, inevitably damaging his investments. Emerging market currencies were collapsing, because they were working inversely relative to the dollar. At the same time, China’s economic growth, which had been skyrocketing for years, was slowing a lot faster than people had expected. So you had emerging markets, currencies collapsing and China’s weaknes

David Stein helps individuals to become more confident investors via audio, video, and books. For the past five years, he has hosted the weekly personal finance podcast, Money For the Rest of Us. The show has more than 250 episodes and more than 10 million downloads. David’s upcoming book, Money For the Rest of Us: 10 Questions to Master Successful Investing, will be published by McGraw-Hill in October 2019. Previously, David was chief investment strategist and chief portfolio strategist at Fund Evaluation Group a US$70 billion institutional investment advisory firm, where he co-headed the 21-person research group. David’s former institutional clients include The Texas A&M University System, the University of Puget Sound, and the Sierra Club Foundation. He lives in Phoenix and Idaho. “And so I started trading and quickly found that it’s not that easy.” David Stein Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever David’s worst investment occurred during the transition period after he had quit the investment business and was trying to decide what he wanted to do in “retirement”. He had set up then shut down a few websites and had reached the point where he thought that even though he had retired, he could be a trader. He was experienced. At his prior firm, he was joint chief of investment researchers and money managers and trading was just part of what he and his team did, which included hedge funds and private equity. As his group’s head strategist, he would go to New York once a year and meet hedge fund managers, because he liked to see what they were thinking, to learn from their successes and mistakes and to see their take on the world. Visit to hedge fund piques interest in trading About a year or before he retired, he went to a commodities trading hedge housed in a Connecticut mansion. He met the founder and went to the trading floor. It grabbed his attention immediately. The floor was separated, with quantitative traders on one side and discretionary traders on the other. He said you could tell where the quants sat and where the discretionary traders say because the latter were messier and their desks less organized, but it looked like a fun and cool place to work. Then once he saw them at their desks trading, David got the idea that trading wasn’t that hard as he had had 15 years of investment experience. Trading turns out to be a lot harder than he had thought So a year after he quit his job, he decided to be a trader in commodity futures, currencies, options just to see how it would go. He knew enough to know that he would not be risking all his money into it, because he had known many people who had suffered huge losses in trading commodities. But he thought with his experience that he knew enough. He had economic models to use, and other investing tools, so he started trading and quite quickly found that it was not nearly as easy as he had suspected it would be. Some of the trades went well, and some didn’t. The problem he found mainly with commodities and foreign exchange (Forex), gold, silver, and other precious metals was the volatility. They trade almost 24 hours a day but it is extremely volatile, and there is no rhyme nor reason for that the volatility. Decides to stop trading but forgets to close one trade So he realized that there were things happening that were not at all like the investing he was used to. He had done fine, if fine is losing a little bit of money, but nevertheless he decided to stop trading. What he forgot was that he still had one trade in silver left open. It was a stop-buy order set up so that when silver fell to a certain price, the system would buy an open contract on silver that would go long on silver. He had neglected to close the position, so the trade went as intended: silver fell to the resistance point and the system trading bought him silver (set up to bet that silver would increase in value), but then silver kept falling. Before he realized what had happened, he had lost around US$25,000 in this particular silver contract. Good decisions are so due to processes not outcomes At this point in his story, David is reminded of Annie Duke, who in her book, Thinking in Bets, makes a distinction between decision outcomes and decision processes. A good decision, certainly a good investment decision, doesn’t happen because it has a good outcome, a good decision is the result of a good process, he related, para-phrasing Duke’s argument. He had not had a good process for buying commodity futures and trading because he didn’t understand what the market was like. He thought he knew enough about investing, how commodities work and economic trends, but he admits that he really didn’t. ‘You must know who’s buying or selling and the volume’ He also recalled a professional t

Mario Nawfal is the founder of the Athena Group of Companies, a conglomerate that operates in more than 40 countries. He started in 2012 with $300 in the bank selling blenders door to door and built that into a business (Froothie) that generated $10m in its second year. Next he built global brand status with Optimum Appliances, a brand he created from scratch. Next he established a range of brands in niches such as personal mobility, fitness, and e-cigarettes. In 2016, he started GoGlobal, an incubator that helps businesses scale their product or ecommerce operations to more than 30 countries rapidly and efficiently.In 2017, he established International Blockchain Consulting (IBC), a network of experts in more than 40 countries that rose in less than a year to become an established industry authority in the rapidly growing blockchain and crypto space. After the success of IBC, Mario launched IBI Ventures (a venture capital fund), IBA (blockchain accounting), and IGC (cannabis and hemp business consulting). In 2019, he launched a new company, Zense, to provide entrepreneurs with insight on how to launch a successful business with a limited budget. Currently, he has created the 7Figure Launchpad, the world’s first and only full-access business program.&nbsp;“That’s when I realized that the person I had trusted to build my business and I was actually in discussion with to become the CEO, because I didn’t want to get too involved in my VC (venture capital) had just walked away and taken clients with him.”Mario Nawfal&nbsp;&nbsp;Support our sponsor&nbsp;Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net.&nbsp;&nbsp;&nbsp;Worst investment everAfter e-commerce success, Mario looks at blockchainBack in 2017, Mario’s main enterprise was Froothie, an e-commerce business and an area in which he had expertise. But he was very interested in blockchain technology after looking at it for a while. He had free time, was travelling around Europe and started learning about the industry, mainly by reading to learn as much as he could and building contacts, calling people. With an assistant scheduling calls from morning until night, that’s what he would do day in, day out. One of the people he talked to was a Mr. “M”, with whom Mario started working, and who along with another gentleman, helped him start IBC. Mario knew how to start, build and scale businesses, but had no knowledge about blockchain, was not a developer nor could he write code, so he needed some experts around him.IBC starts well and grows to seven figures in six monthsWhile his businesses were doing OK, Froothie took a hit with a legal challenge over a supplier mishap. IBC was his next venture but he had to be careful as he couldn’t put in a lot of money. So he had brought on people working to build the business. It started out well and the experts he had brought on built the company as Mario was learning and pivoting when pebbles started to hit and testing different tactics to ensure they worked. He started doubling down and all this worked well to that point that IBC had scaled to seven figures in less than six months. So everything was going well, but he had forgotten to attend one of his main weaknesses - due diligence. Mario trusted people too easily.‘Trusted’ colleague earmarked to be CEO ‘disappears’Everything was going well, the company was going well, the company was scaling despite a few issues over delivery that he had to get involved in, but at the end of 2018, suddenly M. vanished. Initially, he was in hospital for a week and Mario was very worried, and sent messages to him and got everyone to send him wishes for a speedy recovery, and then he just disappeared and Mario had no idea what was happening. Then a payment in large six figures bounced from IBC’s biggest client, and they were unresponsive also. Even though some alarm bells were ringing in the back of his mind, he felt there was no way anything was wrong.Betrayal sinks inBut then when M completely disappeared, the facts of the betrayal started to sink in. Mario even sent him forgiving messages: “Don’t worry about what you did. I don’t know what you did. I’ll forgive you, it doesn’t matter man. You know, everyone makes mistakes, chasing money. It’s a game,” but the messages on WhatsApp were being read but ignored. The biggest client was still not responding and other clients M was close to were also concerned. M had been screwing Mario and IBC for a lot longer than they had initially thought. M had also bad-mouthed Mario to everyone he spoke to, including clients, team members and other partners. So that’s when he realized that the person he had trusted to build his business and was in discussion to appoint him CEO had just walked away and taken many clients with him.Hits keep on coming as industry also collapsesBut the story became

Lex Sokolin iLex Sokolin is a futurist and an entrepreneur focused on the next generation of financial services. He is the global fintech co-head at ConsenSys, a blockchain technology company building the infrastructure, applications, and practices that enable a decentralized world. Lex focuses on emerging digital assets, public and private enterprise blockchain solutions, and decentralized autonomous organizations. Previously, Lex was the global director of fintech strategy at Autonomous Research (acquired by AllianceBernstein), an equity research firm serving institutional investors, where he covered artificial intelligence, blockchain, neobanks, digital lenders, roboadvisors, payments, insurtech, and mixed reality. Before Autonomous, Lex was COO at AdvisorEngine, a digital wealth management technology platform, and CEO of NestEgg Wealth, a roboadvisor that partnered with financial advisors. Prior to NestEgg, Lex held roles in investment management and banking at Barclays, Lehman Brothers and Deutsche Bank. Lex is a contributor of thought leadership to The Wall Street Journal, The Economist, Bloomberg, the Financial Times, Reuters, American Banker, ThinkAdvisor, and InvestmentNews, among others. He is a regular speaker at industry conferences such as Money2020, LendIt, Schwab Impact, In|Vest, T3 Enterprise Edition, and Consensus. He earned a JD/MBA from Columbia University and a BA in economics and law from Amherst College. “The good news is that I didn’t have any money, or whatever money I did have I put into some discounted Lehman stock thinking these guys knew what they’re talking about. And if there’s so much confidence, and they have such fancy suits, and they get paid so much, this thing’s got to … go up. And of course ... it didn’t go up, not at all, not in any way whatsoever, it just went down.” Lex Sokolin, on his time at Lehman Brothers in 2007 Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Fresh graduate joins Lehman Brothers analyst program The year was 2006. Lex had just graduated from his undergraduate degree in economics. It was still cool to work in finance. He joined the Lehman Brothers’ analyst program alongside 40-50 people when the brand was very strong. His intake were young kids out of school, and associates. They were starting at the investment management division. One of the orientation activities was a stock-picking contest in which new staff had three months to generate the highest returns in a no-risk setting. Wins stock-picking contest just as big banks start to fail He won, which did amazing and damaging things for his ego. He was on top of the world as he had bested Stanford and Harvard people, and was on the road to success. It was now 2007. Bear Stearns appeared to be failing and collapsed shortly afterward. Rumors were circulating that the big banks had a lot of bad debt on their balance sheets and that they couldn’t meet their obligations. A liquidity crisis was looming and Lehman was in the crosshairs. Staff 401K packages are matched in Lehman stock At the time, Lex was in this investment management business and the Lehman price was around US$120 per share. Then it started to fall. It halved its value to 60. Then it plunged to 20 and Lex remembers that day. There was a strong corporate culture at Lehman Brothers. The corporate color was green so people would say everybody leaves green because everyone’s on the same team. So managing directors got paid in Lehman stock as a percentage of their accomplishments. Analysts such as Lex were matched in their 401K plans in stock. If you saved $10,000 you would get $10,000 in Lehman stock and nothing else. Also, staff could buy more stock at a 20% discount. Gordon-Gekko type invokes team spirit, tells staff to invest in Lehman stock So Lehman stock was $20, and it had been falling for months. Lex watched as the New York branch manager, an 80s throwback with Gordon Gekko suspenders and haircut, was saying that the stock price was ridiculous and that it had never been so cheap, so he was directing staff to buy more Lehman stock. Mr. Greed is Good was among people managing $80 billion in that business and another $200 billion in an adjacent business. Lex was 22 so seeing such experienced people made him think it was a good idea. The good news was that he didn’t have much money, because the stock never recovered and due to politics and personal animosity, and the devious dealings of Goldman Sachs, the whole company was the only one not saved by the bailout or takeover deals. Lehmans went to zero. Lehmans alone was left out in the cold Merrill Lynch also collapsed, but it was taken over by the Bank of America. So it didn’t go to zero. Bear Stearns had collapsed earlier but it was bought by JP Morgan. Lehman was the example for the

Suresh Mahadevan is the CFO of SureCash, a fintech firm in Bangladesh. Prior to that he was group CFO at Digiasia, an Indonesian fintech firm after spending close to 12 years with UBS bank in leadership positions in Hong Kong, India and Singapore, working in the Asian equities business. Suresh has been an angel investor for the past four years, participating in more than 20 investments. He also advises several start-ups on strategy, culture building and fund raising. He has an MBA from Columbia Business School, a post-graduate diploma in management from the Indian Institute of Management (IIM) Calcutta and an undergraduate degree in electrical engineering. “We have tried raising a lot of money … the company’s out of cash and I have no other option but to close the company.” Email to Suresh Mahadevan from solo founder Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Suresh ventured into angel investing around four years ago, driven in part because his employer UBS, a large investment bank dominant in Asia, decided to ban staff from investing in listed stocks anywhere in the world, at any time. So what could he invest in? UBS said he could invest in ETFs and private companies. So that interested him and he started researching them. Angel investing target tries to harness India’s other religion – cricket This worst investment ever story centers around his third bid at angel investing, which featured his other passion (more or less India’s No.1 passion), the game of cricket. So the company he was looking at was a would-be unicorn market entrant - a fantasy sports betting app. The way it planned to make money was to let people to pick up their own teams with a mix of players from any teams. Then people could put money behind their teams. Depending on the performance of the individuals, you could get a big win if you picked all the right players. So the model was simple. The company collected all the prize money and distributed 80% of it. Fantasy cricket app was to be first of its kind In India, cricket is like a religion and Suresh had followed it closely for at least 40 years, so he was very attracted to the idea. The company was a software operation that built an app to allow subscribers to bet money on the people they picked, and they would strongly advertise this as a game of skill, not a game of chance. If a person has followed cricket or baseball for years, then they know who to pick based on the prevailing conditions. So having been an ardent fan of cricket, this was a big factor in why Suresh got excited about the company. Invests US$100K as noted cricket personality is solo founder What also excited him was 11 or 12 years ago, there had been established an Indian Premier League, professional Twenty20 cricket contest called IPL, and it was a big success. On top of that, the solo founder was highly qualified; he had been to all the right schools, the best engineering school, the best management school, and was a prominent cricket celebrity with millions of followers. Suresh consulted friends in the sports content business, who said Suresh was onto a great idea and also wanted to invest. Suresh felt he was looking at a once in a lifetime opportunity so he put US$100,000 into it, without sufficient due diligence. It was also early days for his angel investing career. He believed that such an astute and market-making play on cricket popularity in India couldn’t lose. ‘I forgot to tell you, he’s bad with numbers’, the first of many red flags Suresh signed up and introduced many friends to the idea, and they also invested. But the first warning signal sounds was when the very friend who had introduced Suresh to the founder said: “Hey, by the way, I forgot to tell you, this guy’s not great with numbers … he’s such a great guy. But his number sense is a little wanting.” Suresh said: “Why didn’t you tell me this before?” Another thing Suresh noticed was that the founder used to visit Singapore regularly from India and he was always smoking and drinking. Suresh gently asked him about his health, as he was thinking this could be a matter of serious “key-man risk”. With so much riding on one man, there was danger he could become seriously ill or die on the job. Another red flag was the founder’s lavish lifestyle: he liked to ski, always stayed at expensive hotels, and would pay $15 for a gourmet coffee when a $5 Starbucks would have sufficed. Suresh started wondering if he was funding this guy’s luxurious tastes. Excessive personal and business spending ‘didn’t matter’ to founder Suresh eventually called him on his spending, but the guy fobbed him off, saying these things didn’t matter. Another strange thing was the founder wanted more introductions and he was constantly fundraising. Another problem with the busin

Jen Greyson is one of the top eight women in crypto and is a genius at failure. She’s currently running co.co, a start-up that’s the Airbnb of office space, speaks internationally on topics ranging from AI to being a female tech founder and knows the struggle of being a working parent through the longest summer. “I should have left sooner, I would have still prospered like I did had I left when I knew I should leave. I stayed because of my investment, because of my sunk costs. I stayed longer than I should have. If I would have trusted myself when I knew I needed to go it would have been much more beneficial.” Jen Greyson Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Chance meeting with computer engineer on an AI quest About four years ago, Jen had built the perfect life for herself. She was a new single mom, was ghostwriting for an amazing client that she had had for a few years and worked one day a week. She would go hiking with her dog and had a great home on a lake. Then she met a captivating computer engineer who was into AI. Over long lunches she would hear from him about virtual reality, AI and other things she thought only existed in science fiction. His goal was to build artificial intelligence “for good”, to create a level playing field so that some young person in Switzerland who wants to use AI to complete a college exam has the same chance as a CEO working for a Fortune 100 company that can afford to pay a huge AWS bill. Drunk on idea’s Kool Aid The more she started looking into the idea, the more she liked it. She offered to help with his writing really wanted to be a part of the process because it was world-changing. She was also newly divorced, had a lot of freedom and was financially doing well. So she dug into his business plan and her business brain kicked in. She had run some big businesses but had left corporate America never wanting to return. He suggested one afternoon: “You should come run my company for me.” And at this point, she was fully wrapped up in the idea, “had drunk the Kool Aid” and was really excited about it. Writer becomes investor and CEO to re-invent corporate world While not wanting to get back into her pantsuit, the idea of reinventing the way corporate structures worked appealed greatly. So even though she would be running this company, it was a start-up and they would be doing it on the global stage using crypto. That community was very welcoming and she saw the potential of the project and the potential to have an impact on small businesses, through neigborhood stores to college kids, and other players who really needed AI could have it. She had some money saved and the engineer didn’t but she decided to back the idea because she believed in it. They had a good plan in place, as with every start-up in the beginning. And the thinking, as with all new businesses is, in 90 days they would be rolling in money. Jen agreed to bridge the company us for 90 days and took out some loans. Costs sink in as deadlines pass and pass After the 90 days, they had some momentum so Jen decided to bridge the company for another 90, and another 90, and another 90, and we ended up raising some money from some other people. But, it started to go badly. Targets were not getting met, things were not getting done, sections of the project were not getting coded. It was her first experience with software development and she was really having to rely on his expertise. But she was also relying on her own expertise in running the business. She knew very well about deadlines and managing people and projects and making sure that what they promised, gets delivered. Major complications hit They started having many major complications and Jen as CEO held the fiduciary responsibility. She started feeling uneasy about what their investors were getting out of the deal and that her partner was wanting to start raising more money. She also felt bad about the risk she was taking because the SEC was really starting to look at crypto projects but the regulations were opaque, which meant risk. She was having conversations with lawyers around the world and in-house to navigate the regulation landscape. And Jen was personally committed to the tune of US$150,000, which made decisions difficult to make as a CEO without thinking about the money she was risking or that she had committed. Mentor asks hard ‘zero-based thinking’ question She was making decisions that might have been different if her money was not at stake. She met a mentor and, while she didn’t want to give up on the project, needed clarity. She had invested in it, believed in it, and truly wanted to have an impact on all those lives. The mentor asked her: “What would you say to a CEO in your position if you were coming on today as an advisor?”

Douglas Tengdin, CFA, is the chief investment officer (CIO) of Charter Trust Company, where he has worked since 2000. He graduated magna cum laude from Dartmouth College in 1982, and received his CFA Charter in 1992. He was the founding president of CFA Society Vermont and remains an active volunteer with the CFA Institute. His first job in the investment industry was as a mail boy and securities runner in 1974. He has also worked as a bond trader, currency trader, mutual fund portfolio manager, bank treasury analyst and manager, and private wealth portfolio manager before becoming a CIO. He began to produce a monthly market commentary in 1993, and started blogging in 2007. His daily blog is called the Global Market Update and he produces a one-minute podcast and radio spot that accompanies it. He has been married for 35 years, has six children whom he and his wife have homeschooled, and is active in church and outdoor activities. He currently lives in Hanover, New Hampshire, with his wife, their youngest son (about to enter college), and his mother-in-law. “The government can take anything away. They’re not predictable. You may think you have a way of predict them but they’re not.” Douglas Tengdin Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever Douglas says his story was not as much a terrible investment as it was memorable. It was 1988 and he was in his late 20s and a bond trader for a mid-sized US bank. He sat on a desk with other bond traders, and bought and sold United States Treasury securities during trading day hoping to speculate on price movements, which are relatively random on any particular day. He had built a lot of financial models, without all the great software we have today, just Lotus 123 spreadsheets, but he had created a lot of them, and they have macros built into them and macros that built other macros, and they were continually processing the price activity, looking for clues. Built models used to help his bank trade in treasuries He had had considerable success with these models and had been hired to help manage the bank’s Treasury department. He was then invited to do the same thing for the traders and so he started doing that and making predictions. Then his leaders suggested he put a “paper portfolio” together to see what he could do, so he used his models and put the paper portfolio to work, with some success. Bank puts him trading real funds and he makes early wins Then they put him to work trading live funds (real money). He was invested in two- and five-year treasuries. He would buy and sell those securities, going short or going long, but he would always be ahead by trading day’s end. Suddenly, Greenspan’s Fed raises discount rate He remembers the day well. It was August 1988. The market had recovered from the 1987 crash, and the economy was moving along. There was speculation about the future of oil prices, which had crashed in 1986 and they were starting to climb out. There were of course doing okay. But there were always “squiggles and giggles”, always turnarounds. So he had purchased the four-year Treasury bond, had watched the price move up and it was close to his return target, when the Dow Jones newsprint machine sounded three “dings”, which meant there was a news item. Immediately following that alert, the machine dinged twice, which meant the US Fed has raised its discount rate. Modest profit in four-year Treasuries turns to big loss Alan Greenspan was new to the Fed, and at the time the central bank was engaged in a policy of “creative obfuscation”. So he had been chairman for a year looking at the economic landscape and instead of adjusting monetary policy through the Fed funds rate, or through the money supply, which was what they were doing at the time, they occasionally changed the discount rate. That was a surprise. And his modest profit in the four-year Treasury turned into a more than modest loss. He recalls seeing that happen and thinking: “How can they do this? Don’t they know that I’ve got a financial model that’s working and it’s working really well.” Besides that, it was the first part of the month and he yet to have his monthly profit and loss statement made. “And my modest profit in the four-year Treasury turned into a more than modest loss. And I remember seeing that happen and thinking, ‘How can they do this? Don’t they know that I’ve got a financial model that’s working and it’s working really well.” Douglas Tengdin Trader has severe instant emotional response Mind racing, brick in the stomach, wind sucked out of his lungs, numbness in his limbs. All the issues at hand flashed through his mind. The thought of being in the hole despite his risk-controlled position in four-year Treasuries to the tune of US$4 million made him feel like a brick had

Darryl Tom is a private wealth manager who delivers personalized comprehensive wealth management strategies and solutions to high-net-worth (HNW) individuals. Previously, he was a private banker at DBS and ANZ private banks and an investment manager with HSBC Australia, providing investment portfolio construction across multi-asset classes, including unit trusts, ETFs, equities, global fixed income and currencies. He provided investment guidance to relationship managers to meet the investment needs of their clients. Darryl has worked as a financial planner for AMP, Australia’s largest wealth manager, and was also based in Tokyo, Japan, where he was a private wealth manager for a boutique wealth management firm catering to HNW expatriates and specializing in wealth management and asset protection. His experience includes business training and development for large multinational firms, such as Goldman Sachs, Pictet Asset Management, Baxter, Roche and Microsoft. “I come across a common theme across all of my clients, which I guess if you were to boil that down into a simple sentence, it would be that clients are chasing the market or following the market as opposed to following a strategy.” Darryl Tom No.1 mistake witnessed as a wealth manager Chasing the market rather than following a strategy Darryl has been on the front line talking with a lot of investors and people wanting to protect and grow their wealth for future generations and one of the common themes across all of his clients’ mistakes has been chasing or following the market as opposed to following a strategy. He says investing is a very disciplined and patient game. Investors’ styles likened to The Tortoise and the Hare He also says investing is like the moral in Aesop’s: The Tortoise and the Hare fable. Consider the tortoise as being the slow, precise, and disciplined investor, just doing what he needs to do and staying the course. Meanwhile, the hare races ahead, but stops every five minutes to talk to people, responding to different information in the market, basically just being distracted. This is a common theme across most of his clients and as a private wealth manager, it’s his job to sit back and try to steer clients more onto the tortoise track as opposed to running with the hares. Following the market instead of following a clear strategy would be the overarching theme. How to be the tortoise? Stay in your lane! Darryl asks his clients if they’ve ever been stuck in heavy traffic, trying to leave town on a long weekend Friday afternoon. He asks them to recall being stuck in the right lane while watching cars go by and feeling desperate to join them and get where they’re going. So they wait for a break in the traffic, pull out, do a few car lengths and the car in front slows down and they’re stuck again. Suddenly, while looking to the right, that lane starts to move forward. They do that two or three times, but if they had actually stayed in their lane, they would have gotten to their destination a lot sooner, and a lot more free of stress. He adds: “We’ve all done that”. Industry and media often drives investors to be the hare The way the financial system operates and is structured and the way the media also markets the financial services industry does not really help investors or clients. They talk up this stock or this “hot buy”, or come up with plausible reasons for why the markets are going up or down, what people should buy and what they should sell. They try to excite, because if they were just saying: “Let’s put together a strategically allocated all-weather portfolio and just let it run its course,” that would make for pretty boring TV, Darryl says. “(If the media were saying:) ‘Let’s put together a strategically-allocated, all-weather portfolio and just let it run its course … that makes for pretty boring TV.” Bankers’ and advisors’ advice makes them money too Often our bankers and advisors are remunerated based on commission, so they are driven to make money for themselves. They will never say: “Let’s put a portfolio together for you, and come back and see me in six months or 12 months, and we’ll rebalance it a bit. But otherwise, shut the TV off and just go about your life,” because that is not going to make the bank or the investment firm any money either. State of the industry is really quite sad for investors Fee-for-service models are evolving, but clients still struggle to invest money and struggling to, put in cash on a 1% annual management fee basis. Then they are told they are going to be charged 1%, but the broker also had to justify their existence by giving market updates. “It’s a vicious circle. And it’s something that really needs to be addressed.” Darryl Tom Worst investment ever Professional should have known better Overactive trader fits the gung-ho profile This is the story is of an error made by a financial professional that Darryl was advising, so this is someone who should have known better. Darryl was based

Jason Bible, aka Mr. Texas Real Estate, is a full-time real estate investor who is thriving after a long journey in the field working with buyers and sellers of real estate. He is the co-host of the live call-in Right Path Real Estate radio show on Houston Business 1110AM KTEK, Monday to Friday at 9am. On top of that, he is the managing partner and chief operating officer at HoustonHouseBuyers.com. His knowledge encompasses landlord investing, wholesaling, flipping, lending, banking, money and finance. In July 2013, Jason started a company that specializes in buying distressed houses directly from home owners. He has bought, sold, renovated, and leased hundreds of properties, raised capital, and borrowed nearly US$10 million in bank and private capital. Further, Jason has been an invited presenter at multiple local and national business and real estate events. He completed his undergraduate degree in environmental science from Sam Houston State University then worked for the University of Texas Health Science Center at Houston (UT-Health), during which he completed an MBA in finance and an MS in Security Management. After that, he started as an environmental waste specialist and prior to leaving UT-Health to start his first company, was the risk manager. He lives in Houston Texas with his two sons, Cameron and Carson, and my wife Sarah, he is an avid home brewer and craft-beer enthusiast. “I will never forget sitting in a meeting, probably two months before, (discussing) should we get flood insurance on (a property in Memorial, Houston) or should we not. And the house … (had) just a little piece of the backyard that was in the 500-year flood plain, so we thought probably don’t need flood insurance on it. Well, this was 1,000-year flood event (Hurricane Harvey).” Jason Bible Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever House refurbished for flipping valued at US$1m Jason’s worst as far as amount of money lost was on a property in Memorial, Houston, one of the last houses that he and his team ever invested in during their flipping operations. It was 3,000-square-foot beautiful 60-year-old house and it needed complete refurbishing, which they had just finished doing. Hurricane Harvey drenches city for four days Of around three houses in flood-prone areas, only with this one had they decided against insuring for flooding. Alas, after 40 about inches of rain per 24 hours of a storm that returned to the mainland a second time and hovered over Houston for about four days, and the ensuing unprecedented flooding across almost the entire city, their $1-million mansion was rehabilitated property was devastated. Signing away $250k was heartbreaking So he and his team were discussing over and over in their sales meeting when exactly they would sell the house. And on about $1 million dollar house, they lost about $250,000. He said writing a $250,000 check to get out of a deal was absolutely heartbreaking. But the real pain comes in thinking that in six or seven years, that house will again be valued at up to $1.3 million. Some lessons Traits essential for investing in real estate If you’re risk averse, don’t do it. Real estate is not for people who can’t handle the risk. If you look at how the SEC qualifies real estate, it’s called “a considerably risky venture”. Don’t apply the emotion of home ownership to your investment portfolio Jason points out to budding property investors that those areas are two totally different things. You’ve got to take action At some point, you have all the necessary information, so just go and do the deal. “You have talked to all the experts, your wife, everybody in your team, your attorney, your appraiser, your bank, your lenders, and all of them have said this is a good deal. … Don’t stand at the altar, get cold feet and walk away before saying ‘I do!’.” Sometimes there is nothing you can do to prevent a huge loss You can have flood insurance. But the real loss was came down to that of the reduction in value. The reality is your portfolio is just not big enough. How do you hedge for a risk the size of Hurricane Harvey, an event that had never happened before in living memory? It’s really tough. “Sometimes a hurricane, sometimes a storm blows in and it’s going to rock your portfolio and there’s just not a damn thing you can do about it.” Jason Bible Andrew’s takeaways You can’t plan for everything Statistically, there are anomalous events that can happen, but if you then build your business around them happening again, you will never take the risk needed to really make money. Don’t overcompensate after tragic events We often see tragedies and cataclysms in America and the rest of the world, and people’s, businesses’ or governments’ responses to them are a massive over-reaction in tryi

This podcast was recorded on 25 April 2019, and is dedicated to the birthday of Andrew’s mother, Kathryn Stotz, 81, who was born on that day in 1938. Mrs. Stotz is alive and well and a daily listener of her son’s podcast Scott Carson (aka “The Note Guy”) has been an active real estate investor since 2002, solely focused on the distressed mortgage and note industry since 2008, in which he buys and sells non-performing mortgages directly from banks and hedge funds on properties across the United States. Scott is the CEO of WeCloseNotes.com, an Austin, Texas-based real estate firm. He has purchased more than half a billion dollars in distressed debt for his own portfolio and purchases assets in more than 30 states across the US, while also helping thousands of real estate investors make money along the way. He is a highly sought after speaker on distressed debt, marketing and raising private capital. He has also been featured in Investor’s Business Daily, The Wall Street Journal and Inc.com. Scott is also the host of the popular podcast, The Note Closers Show and provides regular content across his YouTube, Facebook, and other social media channels. An avid sports fan and reader, he spends his free time attending sporting events, concerts, and traveling to new places. “I felt depressed, I was sick. I even kind of burrowed myself in … when I should have probably reached out for help a little bit sooner from some outside sources. I think we all kind of get our heads down, and don’t let anybody know about the deal. But then I said: ‘I’ve got to take responsibility, I got to step up’.” Scott Carson, on how he felt about losing US$250,000 in a property deal Worst investment ever Scott invested in distressed home loans in Chicago with a group of investors. The deal went south, legal proceedings took much longer than he expected, especially for out-of-state buyers of the distressed debt. Eventually, he bought out his investors and worked to close the deal, but in the end he lost about US$250,000. Some lessons Always double-check legal proceedings Scott talked with his attorney often, but never asked the attorney realistically what the worst case scenario would be. Plan for the worst-case scenario Reach out for help sooner Take it easy Often escalating a situation is not the best way out. Andrew’s takeaways It’s so important to reach out for help when times are tough ‘Stress is a killer’ I removed stress from my life when I stopped saying the word “stress”. You don’t need to draw a confrontation, stay calm Separate research on return from research on risk Collated from Andrew’s My Worst Investment Ever series, the six main categories of mistakes made by interviewees, starting from the most common, are: Failed to do their own research Failed to properly assess and manage risk Were driven by emotion or flawed thinking Misplaced trust Failed to monitor their investment Invested in a start-up company If you can separate the work that you’re doing on the return (which is very exciting) – what you’re going to make from it – from the work you do on the risks involved with an investment, then you have segregated that work and then you can look clearly on all the things that could go wrong, and potentially prevent them. Actionable advice If it’s too good to be true it probably is Seek counsel rather than seeking advice Listen carefully when that counsel is delivered. #1 goal for next 12 months Remove stress from work life Parting words Take action! You can also check out 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 Connect with Scott Carson Podcast Note Buying Blueprint Course LinkedIn Twitter Website Instagram Facebook Pinterest YouTube Blog Connect with Andrew Stotz Astotz.com LinkedIn Facebook Instagram Twitter YouTube <a href=...

Shaun Rein is the founder and managing director of the China Market Research Group (CMR), a globally prominent strategic market intelligence firm focused on China. He works with boards, billionaires, heads of state, CEOs and senior executives of Fortune 500 and leading Chinese companies, private equity firms, SMEs and hedge funds, to develop their China growth, political and investment strategies. Rein wrote international best-sellers The War for China’s Wallet: Profiting from the New World Order, The End of Cheap China and The End of Copycat China. Rein is regularly featured in The Wall Street Journal and the Financial Times. His op-eds have appeared in The New York Times. He frequently appears on CNN, BBC, MarketPlace, CNBC, Bloomberg, PBS and MSNBC. Rein formerly taught executive education classes for London Business School and was a weekly columnist for CNBC and Forbes. He also wrote a column for Bloomberg BusinessWeek. Rein is one of the world’s most sought after keynote speakers for his focus on innovation, consumer trends and the economy in China. His speaking engagement clients have included: Estée Lauder, Adidas, HSBC, AXA, Credit Suisse, Baker McKenzie, Blackrock, Baillie Gifford, KPMG, Macquarie Bank, Nomura, Baird, Deloitte, CLSA, Solvay, Sodexo, and Nestle. Apart from China and Hong Kong, he has spoken in economies such as South Africa, Australia, the US, the UK, Canada, Singapore, Thailand, Mexico, Vietnam, Japan, and South Korea. “I had the students but it was very difficult for me to actually turn a profit. The difficulty in human resources in China has become a central theme of my business and most businesses that we’ve worked with over the past two decades. Mine started with the difficulty of hiring foreign talent, but actually the lack of top Chinese talent and the inability to retain good talent has been a major problem for me in my company China market research group ever since we started in 2005.” Shaun Rein Support our sponsor Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net. Worst investment ever In around 2001, while Shaun was a 23-year-old a graduate student at Harvard University, he was putting some thought to the big question: “What am I going to do with my career?” What he did know was he never wanted to go the corporate route and work somewhere like McKinsey or Goldman Sachs, even though most of his classmates were headed in that direction. Instead, he had been interested in entrepreneurship ever since he had run an event-organizing company in Canada while he was a student at McGill University. The company managed 3,000-head dance parties, populated mostly by pre-legal-drinking-age (21) Americans that he bussed up to Montreal, where the legal drinking age is 18. At the time, he was living in Tianjin, China, going to and from there and Cambridge, Massachusetts. He realized there was a great opportunity for teaching English because “Chinese love America”, and they wanted to learn English. Budding idea to start English learning center in China So he decided to set up an English language learning center for 5-15 year olds and teens in China. The center’s focus was on speaking, because a lot of local children could already read and write well, but he and his team wanted them to learn correct American-accented English. So he returned to Tianjin, found Chinese partners, and set the company up with the unique selling point that every teacher would be a current or former Harvard student or teacher. Center opens with a bang but various snags emerge He opened the company and to big celebration. Classes started and people were very excited to have Harvard students or Harvard graduates coming to Tianjin. Within day one, the center had registered more than 300 students. It was a really exciting time but quite soon the enterprise was not to go quite as planned. There were small problems. There were big problems. On opening day, the police came in and said: “We’ll protect you. We want protection money.” Shaun declined so the police rapidly closed down the center. Hard to entice Harvard types to Tianjin On opening day, they had to find new office space, which they did on the campus of Tianjin Normal University. They made a deal to use classrooms and the police could not bother them. So that was one of the “small” problems, the “regulatory” issues with the police. Then they had the bigger problems. Even though the Chinese students wanted to learn from Harvard graduates, Harvard graduates were not too fussed about living in Tianjin. At the turn of the millennium, the enormous port city was polluted and not very amenable. Expensive to set up and maintain Rental costs, even for the time, were quite high in China, especially to fit out a learning center than met the style demands of the parents of the little emperors and empresses. They re

Natali Morris is a former network news anchor turned personal finance educator and motivator. Her specialties include personal finance, business, and technology. She is currently a contributor to CNBC and MSNBC where she was previously an anchor, a role she also filled prior to that at CBS Interactive. Her experience includes being a contributor to CBS News and the TODAY show, along with CNN, ABC News, G4TV (a former US digital cable and satellite TV channel), BBC, The CW, Fox News, Fox Business News, and Univision (Spanish-language reporting). She has written for Consumer Reports, WIRED, Variety magazine, MarketWatch, TechCrunch, The San Francisco Examiner, PC Magazine, ELLEgirl (now defunct), the Oakland Tribune (now the East Bay Times), and more. She has a bachelor’s degree in journalism from California State University East Bay, and a master’s degree in sociology from the University of Southern California. Prior to 2010, you may have seen her work under her maiden name, Natali Del Conte. Natali is from the San Francisco Bay Area. She lives and works with her husband Clayton and their three small children. Her sole focus is to not screw them up. “I don’t want focus all the time on shrinking my life, because that’s what I’m worth, I want us, all of us to expand our lives.” Natali Morris Andrew’s question about learning finance “When you first looked at the idea of learning finance, or learning investing for yourself … how did you feel about what you were faced with?” Natali’s response “If you look at your finances, how to get them in order and how to then save and invest, as a whole, it’s too much … I started reading these books about how many fees are in your funds, and your IRA and your 401k, and I got myself all worked up and pissed off. And then I was like, well, where do I put them? … So … that wasn’t getting me anywhere until I decided: ‘Okay, take one thing, learn that one thing and that teaches you the language of finance to go to the next’.” Andrew’s points on learning Learn one book or take one step at a time Someone once asked Andrew: “How many books have you read?” The answer was: “Thousands!” The query continued: “How did you read so many books? Andrew answered: “I read them one at a time.” In reference to Natali’s “learn one thing at a time” strategy, Andrew agrees, saying: “Take one small step at a time.” Mother set example for family financial planning Andrew’s mother was very much involved in his household’s financial decisions and money management. His mother and father worked together for years to build financial security, so that they lived a period of 20 years retirement without financial trouble. When Andrew’s father passed away, his mother moved to Thailand with him and she is still financially independent. Cutting costs has a limit, growing wealth has few You can never get to true success in business, investing or in building wealth by cutting costs. There is a limit to cutting costs, so the other part has to answer the question: “How do we grow?” Worst investment ever FBI probe of investment dare not speak its name Natali had some trouble choosing her worst, as she’s had so many challenges. One story she can’t really talk about because it is the subject of an active FBI investigation into some funds that were in her IRA. This investment was particularly heartbreaking because she had her children’s investments tied up in that situation, as well hers and her husband’s. Another situation also involved trust Natali and her husband Clayton (a previous guest on this podcast) got into business with someone during the past five years. They were helping other people invest in off-market properties. Their partner was a fiduciary (a fiduciary relationship is formed between two parties who trust each other. In real estate, a fiduciary relationship is created between a real estate agent, known as the fiduciary, and a buyer or a seller, known as the principal) who was selling all the houses and Natali and Clayton we were getting referrals on any investors that went through him. Towards the end of their relationship, they realized that a lot of the rehabs he had said he had carried out, had not been done or were incomplete. And so that really ended up exposing them to a lot more liability than they had planned for. General lessons It’s very hard to save your way to wealth In fact, Natali says it’s almost impossible. She found that a very difficult change in her thinking. But change she did, and now she tells her clients and students that if she could achieve that shift, then other people can do it too. Andrew’s takeaways Collated from this My Worst Investment Ever series, the six main categories of mistakes made by interviewees, from the most common, are: Failed to do their own research Failed to properly assess and manage risk Were driven by emotion or flawed thinking Misplaced trust <li...

Venkatesh is an author, speaker, investor and entrepreneur. He has spent 22 years in the Asian markets in senior roles across listed equities (with JP Morgan and Credit Suisse), private equity (with Macquarie and AMP) and corporate strategy (with Masan Group). He is the co-founder of strategy consulting firm Dhyana Partners, and has served as a director on the boards of several companies. He is also the author of suspense thriller, KaalKoot: The Lost Himalayan Secret, which has been a No. 1 bestseller on Amazon. In the listed equities space, Venkatesh has held several pan-Asia roles, including as head of India equity research at JP Morgan, and sector head for the Asian metals team at Credit Suisse and Deutsche Bank. He led the Credit Suisse Asian metals team to No. 1 position in the Institutional Investor survey in 2002. At Macquarie, he was a senior member of the team investing and managing US$1.2 billion funds in the Indian infrastructure sector, and was a director on the board and an investment committee member for the SBI Macquarie Infrastructure Fund. He led investments in Indian infrastructure assets at AMP Capital, and headed group strategy at Masan, one of Vietnam’s top-three largest private sector companies by market capitalization. “Within a year both revenues and margins were under severe pressure and there was a fall in earnings. Eventually the stock halved so I lost 50% before I finally sold out last year. (This means) I held it for two years and lost 50%.” - S.Venkatesh Worst investment ever Sudden changes turned tables for ‘perfect’ investment In 2016, Venkatesh acquired what he thought would be a good long-term investment – and the company’s profile showed it had good potential based on its statistics and then-current standing. It was a large, generic-pharmaceutical manufacturer, one of the top three in India and 20th in the world. With sales of more $1.5 billion, market cap running into billions of dollars, good return on capital, great management, and an excellent track record, one could easily ask: “What could go wrong?” “I felt that the company had things going for it: new product launches, and so on … so I dismissed the market concerns.” - S.Venkatesh Despite the company’s overall performance in its niche, its fundamentals and sentiment toward it slid unfavorably. Venkatesh said, at that time, the US market was experiencing “huge pricing pressure”: a severe decline in prices and an increase in customer consolidation. In the same year, the US government also implemented stricter rules over imported goods and drug pricing. This led to “stricter inspections and adverse alerts”, which in turn equate to higher import costs, with the product demand remaining constant, if not gradually decreasing due to increased local and/or foreign supply. Disregarding the red flags, Venkatesh held onto the investment, thinking that the market would eventually make a comeback, that the pricing pressure would stabilize and then return to its historical trend, and that new product launches would aid this recovery. He also thought the regulatory environment was a sentiment issue. This worked for the first few months. However, after a year, the effect of the changes in the US market was drastically felt in revenues, margins, and earnings, and after one more year, the stock’s value was halved. “Rather than holding it all the way down, it’s better to cut losses and get out of a position that has gone wrong. But by the time I finally did that … I was already down 50%.” - S.Venkatesh Some lessons Investing is a lot of hard work Stay on top of your stocks’ fundamentals all the time. Even with the apparently safest company in the world, conditions can change very fast. Pay attention to margin of safety in valuations Sometimes at the top of a bull market, investors can feel that if the stock is good, they can pay more for it, which might work for some time. But with expectations so high, a small reporting change can mean that the stock corrects quite rapidly. A stock can still look as good or inexpensive as it has in its history, but if the company’s earnings halve, it can suddenly look very expensive. Be ready to correct course Keep a close eye on market concerns, and be ready to adjust your weight in a stock and cut your losses, especially if something is fundamentally changing. If Venkatesh had done that, he would have cut his losses earlier instead of holding on to it as it fell all the way down. About changes: get past denial, accept and act Accept when the fundamentals change, and avoid anchoring yourself to your old investment road map. Venkatesh realized that the time between his denial and acceptance took too long. When the expected stock rebound did not happen, he should have accepted the change and acted by taking money out of it and reallocating it into something with better long-term prospects. “If something changes, and your thesis itself is compromised, you need to exit that.” - S.Venkatesh Andrew’s take

Sloane Ortel is an explorer and definer of the connections between capital markets and economic/cultural forces. Our guest today is the publisher of The Sloane Zone, “an email newsletter that comes when you least expect it, and makes more sense than it should”. She holds a bachelor of arts degree in English from Fordham University, was one of the youngest registered representatives of Oppenheimer & Company, and has served and helped establish Newport Value Partners as a consulting analyst. She now works as an independent strategy consultant for big investment organizations after spending nearly a decade supporting the members of CFA Institute as a collaborator, commentator, curator, and subject matter resource. “(At the CFA) I spent the better part of a decade talking with folks from every conceivable time zone about … really doing things that mattered for people there like building better financial markets that can better serve the people. And that’s wonderful and noble, but for my own personal investing, it sort of created the idea that investments came in a particular package.” Sloane Ortel Worst investment ever Bitcoin bubbles waiting too long to invest In the summer of 2010, when Sloane had just joined the CFA, she had a very unusual, purely meat-eating Eastern European person move into her house who was “in the process of moving all of his personal wealth into Bitcoin”. While he piqued her interest in the topic, she did her own research and decided to avoid involvement, as her perception of her influencer as bizarre kept her from taking action and getting into what might have benefited her. Skeptical but curious in 2012, when her roommate moved out, Sloane decided to have another look at it, doing the numbers on setting up to mine it. Again she dismissed it due to its connection to the extremely eccentric guy she associated with it. As more “legitimate” institutional interest started being paid to this new asset class, she decided to invest in Bitcoin herself, with initial funds of $200, and tried to lose it on purpose, as a sort of validation of its difficulty to trade in it, therefore its validity would be proven and she would dive in more. “If it actually takes skill to trade the thing, I should be able to lose money on purpose. And if I could do that, then I do actually have evidence that there is skill involved in trading the entity, and I can sort of rationalize putting a larger allocation into it.” Sloane Ortel Things took an unexpected turn as her investment skyrocketed and gave her $1,400 in profit in around six weeks. She withdrew her capital and left her profit as her initial perception of the investment had affected her investment decision. As investors took a huge blow after its sudden drop in value, Sloane looked back at her investment and found that it went way downhill. From a 600% profit, it went down to just $35. But … “The overall upshot of the story is that I allowed my perception of one particular person to keep me from participating in this giant secular bubble until it was almost too late.” Sloane Ortel Some lessons Believe in yourself Part of the reason Sloane was not talking about the investment was out of a fear that people would perceive her as being as strange as the person who had first suggested a foray into bitcoin. Take the impulse to actually trust your own instincts Listen to that inner voice, is what Sloane says she should have done. Be open to input from outside conventional packaging People can be very resistant people to things that are not presented or come in the manner they expect. Sloane said she is one such person. In institutions, there is almost a parade-type function that a process need to satisfy for those with power to accept and execute it. Andrew’s takeaways People around us can influence us and our thinking Andrew pointed out that we all hear the expression that we are the average of the five people closest to us. But when it comes to investing, he said it is wise to remember that we often think and operate in a bubble, and that the people around us are tend to be maybe like-minded thinkers, and therefore whatever is happening around us is what shapes us. Build your ideas inside and outside the bubble Although we are prone to be affected by external factors, we must not let them become the main drivers of our decision making. Of the six main categories Andrew has drawn from the My Worst Investment series, Sloane took three hits Failed to properly assess and manage risk. In Sloane’s case, back in the early days of Bitcoin, there were hardly any risks, as its value continued to rise by the day. However, during the following years – which was the time when she started investing in it – the market showed signs of its depreciation, and she had failed to see those. Were driven by flawed thinking. The people around us influence us and influence our thinking. Sloane allowed herself to become affected by what other people might think of her if she is to put he

Tyler Stewart has always been an educator at heart; whether it was his previous life as a stock trader, or his current life as head of investor relations at RealCrowd, an online commercial real estate investing platform with more than U$6 billion in deals, Tyler has made teaching investing fundamentals his life’s mission. This calling led him to the founding of two nationally recognized platforms: the RealCrowd Podcast – where top investing minds discuss the most pressing issues facing investors today – and RealCrowd University, a free, in-depth educational course that will teach you the fundamentals of real estate investing. “The quickest way to grow your bank account is to save money, don’t spend it, have a monthly budget. Once you start saving, find a financial advisor and have them help you build out a portfolio and figure out what your goals are and what your risk tolerance is.” Tyler Stewart Worst investment ever Tyler catches fear of missing out from teacher’s story One of Tyler’s memories from his first-year high school business class was that the teacher said that back in the 1980s he had received a tip to buy Microsoft stock. The teacher said: “I didn’t move on it. Had I done so, I would be worth millions.” Tyler never forgot that lesson and since them, all he could think was: “The first tip I get, I’m all in.” College kid gets ‘big break’ stock tip from workmate Later, during his college years, he did construction work in the summer, seven days a week, 10 to 12 hours a day. He was making enough to pay for college and to put a little money aside, for what he was as yet unsure. Then one day, a co-worker said: “Hey Tyler! I got a stock tip for you.” As soon as he heard that, he recalled what his teacher had said and the promised he had made to himself. This was the first tip he had ever received, so he had to go “all in”. The tip was about a drug company that could “cure any disease”. Cancer, HIV, whatever the illness, apparently the company could cure it. So he read about it and thought: “This is it! I’m rich.” So he invested all his extra money when the stock price was at about US$1.10. Feels like a genius as stock is up 10% in first week Within a week, the stock went up to $1.20. It was the first investment he’d ever made and he had seen a 10% gain in a week; one, he thought he was a genius. Two, he was certain he was going to be rich. He started doing calculations on his TI-83 plus calculator, trying to figure out what a 10% gain would mean in a week, in a year, and how rich he was going to be. Stock hovers around the purchase price for a year A year went by and the stock hadn’t moved beyond the range of around $1-$1.20. He finished that year of college, returned to the construction job, made more money and continued to plough it into the stock. When the stock went up, he believed he was the smartest guy in the world. When it went down, he wanted to hide. Stock falls to 30 cents despite all his scientific research Alas, the stock eventually went down to 30 cents, which is a considerable percentage fall for an investment. And the whole time, he was reading every piece of news and press release about the stock. He checked online forums and read reading anything he could about the science behind the stock, even though he was studying a major course in business. He read journals, and was trying to pretend he knew what he was doing and trying to reassure himself that he was involved in the right stock. He read forums and saw people question whether the science worked, and all he could think was such people didn’t know what they were talking about because he had become an expert. He knew “that this science was going to work out” and that this stock was going to deliver a big result for him. Five years on he realizes tip will bring no gold It took probably about five years for him to see that the first tip he’s ever received was not going to make him rich. Eventually, the company dissolved and no longer exists as it was. After the firm folded, he only received pennies on the dollar back. Some lessons Tyler’s investment know-how You have to know why you’re making an investment You have to know why you’re holding an investment You have to know why you’re exiting an investment Don’t base all those stages simply on a tip The decision at each stage must be based on fundamentals and plenty of research. Your investment’s performance does not define you When a stock price is climbing, it doesn’t mean you are the smartest person in the world. When it’s going down, you’re not the dumbest person in the world. What your investment does is separate from who you are. Know why you’re venturing into an investment Separate your ego from the investment Research before you invest Tyler admits he only started the research when he already held the investment. He adds that the research was not about whether to sell or buy more, it was research to just validate his decision for being investment, so it was very much a case of

Giacomo Arcaro is one of the most important European growth hackers, with more than 140,000 “crypto-followers” and has been featured in the Financial Times, Forbes, Wired and the Los Angeles Times. He’s had 2-million-euro exits with two start-ups, CercaClienti.it and SocialAutomation.online and is the founder of Black Marketing Guru. Giacomo has now been involved in the world of cryptocurrencies and initial coin offerings (ICOs) for quite some time, establishing himself as a veteran in the industry and a pioneer of its processes. Currently, he is the No.10 advisor on ICObench and the No.1 on ICObazaar. Giacomo has extensive experience in understanding the specific requirements of a business regarding the models through which it can generate capital that allows it to thrive in competitive environments. He has raised 18.4 million euro so far for the ICOs he has advised and is a published author, with this book: Get Rich with the Blockchain: 47 Ways to Build your Future. “(The man asked:) ‘Can I pay for your services with tokens?’ I asked him: ‘What the hell are tokens? How can I pay my mortgage and my employees’ salaries with tokens?’ So I kicked him out of my church. Three weeks later, I had totally forgotten about this appointment and opened the newspaper to read that this man had made $27 million in one day of fundraising. So I picked up the phone and called him – he didn’t answer; he was probably off buying his private jet.” Giacomo Arcaro Worst investment ever Company starts in a 12th-century church Giacomo’s story starts just after exiting one of his successful start-ups when he took those funds, bought a 12th-century Byzantine temple in Rimini, Italy, on the Adriatic coast, hired about 20 staff and set up Black Marketing Guru. They help start-ups and industries to increase business, revenues and clicks, and views. So one day, a guy in short pants came to his office to ask him to help set up a start-up. When asking what the new company was about, the guy in short pants said it was a cryptocurrency start-up. Giacomo asked: “What the hell is that?” Because, at this time, he wasn’t involved at all in that world. It was 2017. ‘How can I pay my staff or my mortgage with tokens?’ He decided to learn more about it. The man told him it was an interesting business and that people were making a lot of money. People were making a lot of money and then he said “the word no one should say, and this was he wanted to pay for services with tokens. Giacomo had no idea what they were. “How could I pay the mortgage, how could I pay staff salaries, with these tokens?” So Giacomo more or less kicked the guy out of his church. Man he rejected raises US$27m in one day Three weeks later, after Giacomo had totally forgotten about this encounter he opened the newspaper to see that the same man had raised US$27 million in one day of fundraising for this start-up. So Giacomo picked up the phone and called him but he didn’t answer because “he was probably off buying his private jet”. So he called the man who introduced the two, nad got an appointment with him in Lugano, Switzerland. Once he arrived, the meeting situations were like scenes from The Wolf of Wall Street. As in the film, people were also throwing dwarves in the middle of the room, and wine and Champagne were flowing. It was crazy. He met people who had made about $10 million overnight in trading cryptocurrency. Crypto-money bubbling everywhere like Champagne He was very excited and shared his knowledge with all the guys in the room, not even knowing which company they were from. People were making a lot of money, minute by minute, hour by hour. Finally, he spoke with a few people who offered for him to get involved in some initial coin offerings (ICOs) and some other business. He was now even more excited. On the way home he was studying blockchain and cryptocurrency in the car, looking at YouTube videos on his iPad and watching news about blockchain. So after a four-hour trip, barely understanding the basics of blockchain and crypto-currencies, he stopped at a petrol station, picked up his phone and laptop, and started investing randomly in ICOs. Within two hours of returning home, he opened up his laptop and saw that he had doubled the 50,000 euro he had intially invested. Europe’s biggest crypto player offers dream chance So he had 100,000 euro, and then his new friends invited him to invest in more ICOs and he doubled his money again. The “best” was yet to come. Finally, one of the biggest crypto companies in Europe offered for him to build a company focused on marketing for ICOs and other projects in the cryptocurrency world. So he designed the company, created it, and all the while, crypto was still going up. The new firm was swamped with requests for 15-20 quotes on projects a day. Each quotation was for about US$500,000 in billing. So they started sending out dozens of brochures, quotations and invoices. Crypto loses 98% of its value in early 2018 One sad point

Erik Bergman started his career as a professional poker player while still a teenager. At the same time, he founded his first companies. At age 24 he started in 2012 Catena Media, a company that only three and a half years later would be listed on the Stockholm Stock Exchange with a US$200-million valuation. He left Catena Media a few years ago and today is just starting up his latest project, Great.com, a company where the name alone cost $900,000. But this time around, he wants to do everything differently, which means giving away 100% of the profits to charity. “We invested so much emotions and so much pride and ego into not failing, something that should have failed long time ago.” Erik Bergman Worst investment ever Cash losses were never as bad as this In thinking about his worst investment, Erik said he had lost a lot of money in a variety of ways. He did a lot of damage with a raid into crypto almost. He has done quite a few “shitty” start-up investments. But he realized that his worst investment cost a lot more than money, and that was when he lost his health, harmed his friends, and lost relationships. First mistake was thinking ‘it’s gonna be easy’ In 2012-2013, he was busy starting several different companies at the same time, including that of a venture capital firm. One company was working with payday loans. His team were running a marketing company that had a lot of payday-loan clients. So they decided that if they could do the marketing, they could do it all. Of course it turned out to be much harder than they had ever anticipated it would be, and that was the first mistake they made: thinking it will be easy and then jumping into a business area with almost no understanding and with far too little research. ‘It’s never easy’ So they started building the company and hiring people to run it. However, very early they realized that it was so much harder than they had predicted. Nevertheless, they soldiered on, and Erik hired one of his closest friends and a few others to help run the company and a couple of others. But this company just never found any traction. They had many technical issues and many struggles. Erik’s old friend was in charge of the technical side, which kept facing major challenges due to the size and complexity of the big system they built. By the time the system was up and running, they ran into troubles with the bank, which didn’t want to co-operate because they were competing with them. Thus, they couldn’t finance the operations and they needed to find other ways to fund it. Whenever they managed to solve one snag, they would be hit by the next one. It took a year before the venture became somewhat sustainable. Legal environment changes, adding huge workload Having already lost a lot in time and having spent a lot of money, there was then a change in the legal requirements that forced Erik and his team to change all of their back-ups, all the systems behind their sites and they had big problems getting access to more data. So they had to change the entire back-end of everything. Erik’s friend and business partner was already overworked and he and two others were in charge of running this. Right in the middle of the regulatory changes, those two people resigned. One, his girlfriend, got pregnant, and other other, just wanted to leave Malta and move back home. Friend left holding the bag So Erik’s friend had to do this three-person job alone. He had to rebuild everything and worked day and night for weeks. Erik was unable to help because of his lack of tech expertise. The friend put one system together but it had been put together quickly. Because his friend lacked the time and energy perhaps to do it properly, the system crashed within around two weeks from being made operational. Exhausted business partner collapses after system fails So Erik and his friend had struggling for so long and just when they could see the light at the end of the tunnel, the legal requirements changed, his friend the entire system alone, and then it failed. Erik’s friend had a complete breakdown out of physical and mental exhaustion. Erik, being busy with other projects, was unaware of the shape his friend was in or the pressure he was under and his friend, who had not slept for weeks, didn’t come back to work. Erik admits being too distracted looking at the numbers instead of being there for his oldest friend, who would take three years to fully recover. ‘Small side business financially’ takes huge toll This was a small side business financially compared to the bigger companies he and his team put together. But they had invested so much emotion, pride and ego into it not failing – something that should have failed long time ago. They just kept focusing on it, and it cost them a lot more than money. They never got it up and running, and had to sell the remainder of the database and other things at significant losses. It also took Erik a long time to recover from such strong emotions as well, beca

David Keller, CMT, is president and chief strategist at Sierra Alpha Research LLC, a boutique investment research firm focused on managing risk through market awareness, and author of the blog, Market Misbehavior. David calls himself a right-brained person in a left-brained industry and prides himself on his ability to bridge the gap between academic and practical finance. He is past president of the Chartered Market Technician Association, and most recently served as a subject matter expert for Behavioral Finance. David was formerly a managing director of research at Fidelity Investments in Boston as well as a technical analysis specialist for Bloomberg in New York. At Sierra Alpha, David combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities for active investors and enrich relationships between advisors and clients. He uses his blog to teach readers about investing through metaphors, most frequently paralleling the process to aviation and flying. The blog platform also provides him the opportunity to make observations on market psychology. On top of this, David is a featured contributor on StockCharts.com, where he authors The Mindful Investor column, and on the See It Market platform for “smart, unbiased financial minds”. David is also a published author; his articles have appeared in Bloomberg Markets magazine and he edited the book, Breakthroughs in Technical Analysis: New Thinking from the World’s Top Minds (Bloomberg Press). His talents took him to Waltham, Massachusetts, where he was an adjunct professor for three years at Brandeis University International Business School. David has a bachelor of science degree in psychology and a bachelor of arts degree in music from The Ohio State University. “One of the reasons we fall into a lot of behavioral challenges or poor decision making as analysts is because you are programmed to do just that … pound the table, put your foot down and insist that you have the right answer … to be completely fair, probably almost half the time you do not have the right answer.” David Keller Worst investment ever Markets begin to recover after bottom of 2009 In mid-2008, David left New York to work for Fidelity Investments in Boston and what followed was a very difficult first year on the job from a market point of view. The market topped out in late 2007 while a lot of stocks topped out in early 2007. Then 2008 started a little weaker. It then continued its sell-off into autumn on that year. The market bottomed out at the beginning of 2009. His March, April and May was very confusing and there was a great deal of volatility at the low points. Through 2010, 2011 and 2012, market start to recover consistently, with some surprises along the way. People were starting to put 2009 behind them. David’s wrong turn begins as he goes bearish in 2013 In mid-2013, David took the completely erroneous view on the markets by turning bearish on US stocks. Of course he now knows that that was not the time to be bearish as the next few years showed strong growth across the board, especially in the US. The upshot for him leading up to it was that he was very focused on the March 2000 high, when the S&P was nearly right on the 1550 mark. And then in the beginning and then late stages of 2007, it reached almost the exact same level. So as the market had once again approached the same level, it triggered in David the beginning of his wrong call as he was expecting a repeated pattern when, he has realized since that if he had looked at all the evidence, it would probably not have supported his call. How did that impact David professionally? He said he learned a lot. As an analyst and as a professional researcher, he pointed out that in such jobs you need to take a stand, to have an opinion. One of the reasons we fall into a lot of behavioral challenges or poor decision making as analysts is because such professionals are programmed to do just that – pound the table, put your foot down and insist that you have the right answer. He admits thought, probably almost half the time you do not have the right answer. The markets make for a very humbling report card for your calls. So he learned very quickly that while it is important to have an opinion, it is also very important to have the humility and intellectual honesty to understand when your call is not working out and then being open and clear on what evidence has caused me to change your mind. Road to when ‘Dr. Doom’ realized he was wrong It was definitely a contrarian idea to be bearish at that point because stocks in general were pretty strong and the US market looked very good, riding at record highs. He realized that he’d made his mark when the trading desk chief referred to him as “Dr. Doom” to a group of people. The driver behind his call though was not just the market being at new highs. He had looked at price momentum in different ways. One common way that technical an

Clayton Morris is a former Fox News anchor who left the No.1 cable news show in its timeslot, Fox & Friends, after achieving financial freedom. Through his Financial Freedom Academy, Clayton now devotes himself to helping others build passive income and achieve financial freedom like he did using methods he had to learn the hard way. After some epic failures, he’s learned how to build a meaningful life, and shares these lessons on his top-rated podcast, Investing in Real Estate with Clayton Morris. At age 13, Clayton saw his dad unexpectedly lose his job. Ever since then he had a fear about money, and always knew there had to be a more entrepreneurial way of creating wealth. He got into purchasing performing assets to secure a future for his family so they didn’t have to go through the same financial pain as he did growing up. After spending years building up enough passive income through performing assets to quit his high-paying media career, Clayton launched the Financial Freedom Academy because he realized his passion is in helping others learn that they don’t have to just work for a pay check, and they don’t need US$1 million to achieve financial freedom. “So what happens to a lot of people that start to make money is that they quickly find ways to squander it because money flows to those people who take care of money … and guess what? Money flows away from people that don’t take care of it, and not taking care of it doesn’t just mean making stupid investments … it also means you … think you need to hold on to it like a hoarder.” Clayton Morris Worst investment ever Clayton catches property bug after flipping condos for good profit It was 2006. Clayton was working for Fox News’ The Daily Buzz program out of Orlando, Florida, in the US when he caught the real estate bug. He had lived in and fixed up a one-bedroom condo on a golf course he had bought for US$75,000 since he moved to Florida in 2004 to work on the TV show. Then the woman in the two-bedroom condo next door died and her family were looking for a private sale as it needed renovation so he made an offer to buy it. Without any experience, he started carrying out repairs on the place every day after work. He then listed them and sold them for a handsome profit of around $80,000 just before the market crashed. He had made a fortunate investment and definitely had the bug. Rolls money into golf community in the North Carolina mountains He then took that money and rolled it into a speculative land project in the beautiful mountain area of Cashiers, North Carolina. The project, a Phil Mickelson golf course community that a friend of Clayton’s had found in a backroom seminar in Manhattan, required $30,000 upfront for two blocks of land on which two log cabins would be built with funds from a construction loan. The idea was that Clayton could flip the cabins and double his money. He was shown marketing materials on a website with running water sounds and visions of the proposed clubhouse and multiple phases. Negative associations with money almost drive him to get rid of it Some emotional negative associations with money were happening with Clayton from his upbringing that made him feel uncomfortable holding on to the profit he had already made. He said he never felt he was worthy of the money or worthy of success. Visit to beautiful but empty mountain site briefly inspires investor A short time later, while waiting for the cabins to be built, the market collapses, the builder withdraws from the deal, and they have to find another builder. Clayton drives to North Carolina to see his plot of land meets a promoter at their “beautiful” offices in Cashiers town that has posters with a demonstration building, the construction phases, a log cabin in a field, and lots of hot tea and coffee. They go to visit the marker where Clayton’s plot is and the clubhouse site which is also yet to be built and there is a wood sign with a picture of a clubhouse on it. Despite the lack of any progress, Clayton still could imagine how good it was going to look. Everything falls apart as economy collapses and all stakeholders withdraw But, just after the visit, everything started to fall apart: with a balloon payment coming soon on the construction loan, the economy collapsed. With it, the land value fell to very little, the second builder, Phil Mickelson, and the realtors all backed out, leaving Clayton apparently holding the bag. He had to go through deficiency judgment and foreclosure. One day while working at into Fox News, he went to buy coffee and because of the deficiency judgment against him, he found he could not use his debit card. He worked down the hall from Bill O’Reilly and Sean Hannity, national news figures, and went back to his office to log into his Bank of America account to find everything was flashing red. All his accounts were frozen, meaning every single note of cash he had to his name was frozen. Long climb back to financial health He had to work with

Avery Konda is all about positive business, impact investing, and #SocialImpactEverywhere. He is 23 years old, a podcast host, and an impact investor in 18 start-ups; all of which have a bottom line or mandate for positive impact. Avery works as the chief community engagement officer for Tandempark, an online volunteer platform, centralized volunteer portal, and volunteer management software that helps organizations recruit, schedule and communicate with their teams, while making it easier than ever for volunteers to discover and engage in local opportunities to strengthen and enrich their communities. The Social Impactors Podcast is all about impact. Avery works to highlight impactful individuals making positive social change in their communities. “Some of the red flags of their competitive analysis just did not make sense. Their product although it was pretty was really, really just a shell of what it could be. And so all these things were red flags that you really should look at as a private investor or just in the investment space.” Avery Konda Worst investment ever Avery started in investing young and slow. Putting a toe in the water, so to speak. He did not go in aggressively, but low input and low-risk investments. He would make some profit and learn, but that gave him “the investor itch”, mainly not itching for more money, but he did want to learn more and he loved the idea of making money from money. It was the sporadic start of a sometimes dangerous journey. Young investor goes through learning phase He learned about investing a lot, losing a lot or winning big. He learned about formulas strategies, and how some things will make money, but some things do not always work. And he learned these things the hard way, making some “pretty stupid” investments based on emotion, putting money into companies that he was emotionally attached to, which you should never do in the beginning or at any time, because you should never invest on an emotional basis. It should be very much an objective decision. He was an 18- or 19-year-old man and thought he knew the world, but he didn’t. His emotionally charged investments failed, he would regain confidence and invest again sporadically, making a little money one month, and investing more the next. Not a good idea, because you should only invest about 10% of your net worth. Sometimes he would invest more than 10%, when he points out he could have “saved that or … done the smart thing and taken my girlfriend on vacation. Because the ROI on that’s a lot more attainable sometimes.” One early foray in angel investing tainted by emotion Eventually he got into the private investment realm. One company he can’t name was a technology company, and again, it was based somewhat on emotional attachment as well, while trying to remain objective. He started off asking the right questions: What’s your burn rate? How much capital have you spent already from initial investors? Who is in the team that you have behind it? What was the mission? But there were a lot of red flags. The Avery would like to highlight for young investors is the idea of using intuition, not as a basis for investing, but as a protector. If your intuition tells you something isn’t right then there is usually a good reason behind that. With this company though, Avery didn’t listen and was kind of caught in the Wow factor brought on by the “incredible product” and the “incredible team” who are doing “incredible things”, and that they “couldn’t fail”. Some of the red flags of where money was being spent and their competitive analysis didn’t make sense. And their product, although it was pretty was really just a shell of what it could be. So, as a private investor, or just in the investment space, these were red flags that you really should look. So he lost the entire investment, and at his age at the time, and the amount of net worth he had, it was a big deal and a big investment. Company loses every month, is transparent, but does it through nonsensical spending It did not happen overnight. He had kept telling himself there could be a way for this company to do something good, that these people could be good, but it slowly fell apart. Anytime the company would do an investor update, normally monthly, but they were still losing money, and they were losing money consistently. There were no signs of turning it around. The great thing was, the founders were very open about their failings, but while the transparency was nice, their spending didn’t make sense. They were in a new market that none of the founders had been in before. So he watched it slowly fall apart. Failed angel uses loss as a learning opportunity The good thing for Avery though was that he used it as a case study for himself. He stepped back and researched about where the company failed, learned about what they had done wrong, and he has used his takeaways as his guideline for investments since. He follows his guidelines to the T. And now, if his intui

Viola Llewellyn is the co-founder and president of Ovamba Solutions, Inc. She oversees innovation, strategic implementation, investor communications, and business development. digital undivided included her as one of only 34 black women in the US to have raised more than US$1 million for a technology company. She is a TED speaker and has been lauded as a Global Technology Pioneer by the World Economic Forum. Recently she was listed in LATTICE80’s Top 100 Women in Fintech 2019. Her family is from the Central African republic of Cameroon. She was born and educated in the UK and lives between Africa and the US. “Oh, this is a great idea. (At least) 1.1 billion human beings on the African continent, you guys are rushing in and are doing something that’s not charitable; it’s going to be fantastic. What could possibly go wrong?” Viola Llewellyn, quoting friends, family and supporters Worst investment ever Idea to fill African SME funding niche between microfinance and banks Back in 2013, Viola and her business partner Marvin Cole decided they wanted to create a business that would help African business, that is, SMEs, to get access to capital, so that they could grow. Everyone knows that small businesses need capital to sustain themselves. Africa has microfinance institutions and banks. But the whole new era of peer-to-peer, marketplace lending was just beginning, and the partners hit on the idea to be first movers in the African market to do this. Viola points out that when people start a new venture, no one thinks about failure. The partners also hadn’t seen any models that they could emulate the good and improve on the bad. All they knew was that we were going to create technology, be innovative, find business partners, raise capital, and help these businesses to grow. And they would be the heroes of the continent. Partners revel in broad support for their finance revolution To kick things off in 2013, they did a successful friends-and-family raising and spoke to everyone they knew all of them knew that, “Oh, this is a great idea. 1.1 billion human beings on the African continent, you guys are rushing in are doing something that’s not charitable, it’s going to be fantastic. What could possibly go wrong?” At first, not a lot went wrong at all. It was almost 2014 and there was a new association that was formed to bring all the peer-to-peer platforms together, which was what the partners thought they were. Viola points out that is not what Ovamba does today at all. It is now a marketplace maker that funds businesses that are in the trade sector. It creates and innovates technology to do all of that. So the failure she shared with Andrew was what led to the hugely successful innovation that emerged at end of her tale. Dynamic duo draws strength from their diverse perspectives In April 2014, Viola’s business partner (who she says is a great deal more cautious and sensible than she is) says they were going to a big association conference. She recalled her youth here and considers herself very lucky. Viola was unable to attend university because she made what she called one of worst mistakes a young woman can make: getting pregnant while not being married. At the time, her life was derailed but that upheaval put her on her own path to understanding the world from a very different perspective compared that of her business partner, who has an MBA. And because she went into sales and marketing, she loves to jump feet first into anything and figure it out later. She does not believe you need to go systematically from A to Z, as long as you can see the Z. Marketing activities net big-fish investor at conference So ahead of the conference, Viola started creating templates and presentations and sent them out to everyone who might be attending. She had a lot of promising responses and apparently everyone was interested to know what the partners were doing. “A factor about the beginning of either a bubble or a new industry or a new asset class is that everyone jumps in the pool. There are sharks, piranhas, dolphins, and mermaids in the water. They’re all there. Everybody’s trying to find anything to jump onto.” That includes the start–up community, which is how they were involved. One company was most aggressive and ended up being signed as their first institutional investor. Viola described it has the most beautiful courtship: trips to London, meetings, and all the while, other businesses were also trying to figure out deals. Failure to ask right questions should have been first alarm The day came when they started to negotiate the transaction and that was when the first red flag went up. The partners thought they were being clever smart by asking: “Who else has done business with you and how did it go?” And everybody said: “It went fantastically.” But Viola and her partner had failed to ask: “Who went through a cycle of misunderstandings or violations of contract and how was it resolved?” All they could see was the shining

Gaurav Sharma holds a post-graduate degree in management from Birla Institute of Management Technology (Bimtech), in Uttar Pradesh, India, and a bachelor of science degree from the University of Rajasthan. He has had a rewarding five years of experience at various multinational companies in the domains of wealth management, investment analysis and portfolio reporting. He is presently working towards democratization and simplification of the wealth management services by leveraging machine learning, AI and data science. Gaurav aims to solve problems across customer segments comprising the masses, the affluent middle class and high-net-worth individuals (HNIs). During his tenure at Moody’s Analytics, he gained practical exposure to global standards of investment research and reporting through various tool such as Bloomberg, Morningstar, FactSet and other proprietary tools. At Mercer, he gained exposure to asset allocation, financial and retirement planning, and investment consulting. Prior to these, Gaurav worked in the global wealth and investment management business-line of Bank of America-Merrill Lynch and supported ultra-HNIs in managing their wealth. “If the company’s growth plans are there, it will work.But if the management is not able to understand and … make investors’lives easy by telling them everything, if they try to hide and try to play with the accounting standards, and of course, if they try to siphon off money,at the end of the day, investors will get to know.” Gaurav Sharma Worst investment ever Young blood catches bug for stock investing Gaurav was very young when he became interested in the stock market and was one of those guys who “jumped right into it”. He borrowed some money from a friend’s father, who was kind enough to believe in his investment philosophy. Due to his youthful enthusiasm, he was trying to make it big very soon in the market. First foray rides educational technology wave in India So, he decided to invest in education technology company, Educomp Solutions (Educomp, EDSO.NS). He did some balance sheet analysis and most of the basic research, and invested in the stock around its peak in 2008-2009. The company appeared to be at the forefront of the education-plus-technology mix, and for India, with hundreds of thousands of public, private, international and specialty schools all looking to drag their classrooms away from chalk boards, it seemed a no-lose situation. He bet really big on it, the numbers looked good, and every one or two years, there was very good news about Educomp winning contracts with 15 to 20 schools. Add to that the promotion of the K-12 education system, and government policy wanting to put a tablet into every student’s hands, everything was going great. Hidden mismanagement leads to company’s downfall Gaurav says that if the company’s growth plans are there, it will work. But in Educomp’s case, the founder and CEO of the company had other plans with regards to managing. He was not doing the right thing with regards to the proper management of the company’s money, and was siphoning some off to other transactions, investing in other asset classes by taking money out of the company books, and was basically fudging of the books. The Gaurav had done extensive research on the company’s numbers, its balance sheets, growth plans, and growth in the sector; it all looked good. But as for the management quality, he was unable to assess that very well. Investor loses 90% of borrowed funds as stock plunges That’s what made his life difficult, because when the shares started falling, due to the management quality, he sought to assess the business, but he could not trust the management. The stock took a beating and it ended up a 90% loss of the whole money he put in. He then exited, and the only profit was considerable lessons learned. Some lessons Read between the lines when it comes to management. A company can have excellent prospects, great products or provide great services, have good numbers, great balance sheets, fine growth outlook, but all of that can come to zero if the management is poor. If the C-suite is lacks ability and is not smart enough to understand different root causes that can emerge to disrupt its business, it will fail and hurt investors very badly. Sometimes it’s very difficult to prepare for corrupt management. If the founder/CEO had not misspent company funds, siphoned money off for bad transactions and family members, the company would have been in a much better state. Numbers tell a story but they do not tell the whole story. Investors need to check the background of management, and this kind of analysis must be done on the quality of the management team, their consistency as well, because balance sheets can be fudged. Such misreporting can go on for a long time before investors get any hint of it happening. There must be checks and balances also on management, through vehicles such as active board members and shareholder activists deman

Nate Abercrombie lived in Syria for two years trying to learn Arabic before attending graduate school. He had hoped the language skills would help him secure a job in the oil and gas industry. Ironically, he ended up working in the renewable energy industry as a financial analyst. He loved having the opportunity to analyze and research large capital projects, but financial analysis in the wind energy business can become very repetitive. He needed a new challenge and equity research was something that he really wanted to do. Nate got a shot at Janus Capital Group (now Janus Henderson Group). It was a phenomenal learning experience and he got to know some great investors. However, Nate ultimately came to realize that the corporate objectives were misaligned with fund-holder returns, so he started thinking about next steps for himself. Something he did really enjoy about the equity research process was meeting management teams. Considering that the average investor never has the chance to listen to management, Nate decided to start the podcast, Investing with the Buyside, which has now become The Stock Podcast, which is described as: “The only investing podcast that gives everyone the chance to hear fireside chats with public company CEOs and CFOs regarding their business, industry, and financial outlook.” “In autumn 2018, the company decided it would cut its distribution (dividend payout) by 67% … the stock went down something like 45%. So when I bought in, it was probably at around US$10/share, and it declined to about $5/share. But then over the next few days it just kept going down.” Nate Abercrombie Worst investment ever And still in progress Nate said he has made a couple of bad investment missteps, but the one he spoke of was one that remains in play as he still owns some of the shares in the company he talked about. As an energy industry financial analyst, he covered the midstream space (“Midstream” is a term used to describe one of the three stages of oil-and-gas industry operations, and delineate the processing, storing, transport, and marketing of oil, natural gas and natural gas liquids). One of the things he did as an investor was that he could invest outside of the portfolios he was managing, but also invest in some of the stocks that he was not covering, but were within his sector. Experienced oil and gas analyst makes a play at a midstream outfit He was a big investor in exchange traded funds (ETFs), because it was very difficult to trade in and out of individual equities back then. Also, he had been cleared to invest in a couple of midstream stocks on an individual basis, and one in particular was Sanchez Midstream (SNMP:US, SNMP.K), a subsidiary of Sanchez Energy (SN.US), an oil and gas exploration and production company in the United States. These companies pay a lot of their profits out to investors, but in this industry, rather than call them “dividends”, they call them “distributions”. The distributions that they were paying out at the time were very attractive, some in the double digits, and Sanchez Midstream was no exception. Idea was to use dividends as income while getting podcast off the ground Nate had been exploring what was going to come next for his livelihood. He was thinking about starting his own podcast and that he was going to need extra income. Sanchez Midstream was paying out a 20% distribution yield, it had a very solid balance sheet, and it had growth. The important indicator for a midstream company, Nate pointed out, is to see volume growth in its system. And that was there too. Despite the contemporary commodity price collapse, there were some quarters during which volume growth had slid a little. But by the same token, its distribution looked extremely stable, because most importantly, the distribution was covered more than one time. Rather than call them payout ratios, this sector does the inverse, and calls it the coverage ratio. So as long as coverage is north of 1x, one times, that means that they haven’t enough cash flow to pay that distribution out. Senior management talk up the company nicely on Nate’s podcast Things were looking good. Nate even had a member of the Sanchez Midstream management team on his podcast to talk about just how the outlook was positive and how things were going well. This was a stock he had bought thinking that it was going to provide him an income, just given the fact that he was moving to a new career and that his outlook was not very bright from a revenue standpoint. So he bought and owned the stock, and had management on his podcast to just talk about the business, and how well the company was doing. Management announces 67% cut in dividend payout, stock plummets Then, in the autumn of 2018, the company decided it would cut the distribution 67%. When that happens, the stock usually goes down a lot. That day, Nate recalled the stock went down something like 45%. So when I bought it was probably around $10 a share, but after the annou

Reed Goossens moved to the United States in 2012 to pursue a career in structural engineering, however he then discovered a passion for real-estate investing. With limited funds and no credit, Reed went from purchasing a small duplex to growing his own real estate investing firm, RSN Property Group. Reed now syndicates large multimillion-dollar deals across the US and certainly lives up to the “never-say-die” Aussie attitude when it comes to being a successful entrepreneur. Reed is also the host of the up-and-coming podcast, Investing in the US: An Aussie’s Guide to US Real Estate (and has recently published a book of the same title), wherein he invites other distinguished real estate investors and entrepreneurs to speak with him about their success and help guide other international investors who want to successfully invest in the US. “The ARV (After Repair Value) was not large enough to justify how much money we ended up spending to add this third story.” Reed Goossens Worst investment ever ‘Networking on steroids’ typifies Aussie engineer’s view of first real estate event in US Reed moved the United States in early 2012 and was without a job, so he took the brave move of walking the streets of New York City to visit every engineering firm he could find, with his portfolio in hand and saying, “Hey, give me a job!” He quotes Tony Robbins, who says: “One ‘yes’ will change your life”. And it did. He looked at medium-sized firms, and admiring his spirit, one actually did employ him. Within two weeks of moving to the US, he was at his first real estate networking event, and he realized the Americans were on a different level than he was coming from Australia. He called the US experience “networking on steroids”. Learning about US property Realizing he had much to learn in his new home country, he spent the next six months doing just that. He realized quickly however how low the barriers to entry to the property market are in the US compared to those in in Australia, in that he could go out and buy a property for US$38,000. He was amazed, stating that you could never buy in Australia for under around $250,000-$300,000. He visited upstate New York and bought a number of properties but quickly ran out of his own money and banks were shy about lending to this new arrival. So he found a partner, and with him, started looking at properties in Philadelphia, as he wanted to try his hand at flipping houses. He was confident he could do so as a chartered structural engineer who had worked on many ground-up developments, including the London 2012 Olympic Games site. Reed finds a partner and they buy a row house in Philadelphia to flip So, he and his business partner bought an early 1900s two-story row house in Philadelphia for $110,000. Their goal was to add a story to match adjacent houses and make this row house similar to others in the city and those in New York, and thereby add value to the property. Reed did all the structural engineering drawings and they hired a general contractor (GC). Contractor’s thievery and other horrors make for a lengthy and costly project And here Reed explains the two main problems with the investment. The story he said is a very good lesson in After Repair Value (ARV) and underestimating the cost of carrying out the renovations. In the end, the ARV was not large enough to justify the amount of funds they ended up spending to add the third story. Combine that with shoddy GC work – the general contractor stole materials from them and Reed had to take over the GC work himself and handle all the subcontractors. There were other problems on the mechanical, planning and electrical sides, as the original GC had cut corners and sealed walls before the city had inspected plumbing and electrical wiring. They even found some of their stolen materials at project site a few streets from the house, as they had been networking and were invited onto another developer’s project site. Extra pressure hovers nearby as investor’s father is also involved The situation was also riding on some emotional issues. Reed’s father was also invested in their project and it was Reed’s first foray into syndication. They all thought the build was only going to take around six or seven months, but it ended up taking about a year. And they were holding it the more spending was happening on the debt, the soft costs, and just really having to try to get it out of a hole. One of the subcontractors also ended up being jailed over a bar fight. So, suffice to say, a lot went wrong. At the same time, Reed was trying to move to Los Angeles to be with his girlfriend, who was from there, and his business partner stayed to finish the job. Heart of the loss was how much the home would be worth after repairs The summary though was this and Reed points out the heart of the problem was in the ARV. They bought the house for $110,000, spent about $220,000 or $230,000 on it and sold it for only $375,000. Reed did take care of his father, an