It took me more than 30 minutes to write down all notes. It is hard work. I like to look into some of rules, and then I need to learn how to invest again on stock market, real estate, and other areas.
1. Gross is not the same as Net
- Many investors like to show off their returns
- ask them "net or gross"
- what you make verses what you keep
- most people regret to mention profit in taxes
ex: stocks
more than one year
long term tax rate
Held for 1 year or more -> long-term capital gain rate
- consider your post tax return on investment
- always think about the investment term
2. Understand value verses cost
- price on value or two different things
- price is not determined by value
- price is determined by market supply and demand
3. Pay attention to expenses
- most investors do not understand the true costs of their investments
- expense ratio is not the only cost
1. the fee associated with an investment
2. transaction costs
3. Taxation
4. Cash drag
- understand the expenses associated with an investment, go above one beyond the expense ratio.
- avoid actively managed funds, buy Vanguard Index fund.
4. Follow the strategies of money
- many old strategies of accumulating wealth still work today
- Follow the map of a successful person with a map
5. Always keep some cash
- Every financially stable individual has a rainy day fund.
- money parks for an investment opportunity
- money parks for an unforeseen expenses
Bad scenario
Needing money and having none!
ex: Too heavily invested in the market
6. Buy what is on sale
- whether it is a stock or laundry detergent
laundry detergent -> spending less money
stocks -> increasing potential profit margin
- if you understand the value of a company and the current price for ownership is less than the value you can make a profit when the price normalizes.
Facts: Most people are afraid to buy stock on sale.
7. Don't be afraid to lose it
- there is no such thing as a free lesson
- every time you lose money, you learn something
- If you are afraid to lose money, you are missing out an valuable lessons
- people do irrational things to avoid loss
- solving money in the bank is a guarantee way to lose money saving
- Your fear of losing money is losing your money
8. Never waste it
- Do not waste your money on unnecessary luxuries
- Direct your money towards the goal of financial freedom
Example: 1. First class travel 2. Prepared food 3. Impulsive buys
Statistics
start time: 11:56 am
end time: 12:53 pm
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