Most traders would be better off as investors who just buy and hold. All these posts about how this market is "so hard to trade right now" while it's near record highs. If you can't make money in this market, you probably need a new strategy.
Way too many people have a loser mentality about money. They’ll say:
“You can’t beat the market picking stocks.” - 10%-20% of investors do. Considering all the people who panic sell during dips or go big on garbage meme stocks, you can absolutely be in that top group if you know what you’re doing.
“Credit card rewards are a scam, you’re never going to beat the banks at their own game.” Dave Ramsey says this all the time which is how you know it’s a trash take. Cash back is literally the easiest way to make extra money, all you need to do is pay off your credit card every month.
“It’s not how much you make, it’s how much you save.” - Savings rate is important but no one’s getting rich on $40k a year. This is just an excuse to settle for a low income. You’re gonna get much better results if you’re relentless about making more money instead of spending hours becoming the best budgeter.
A winner’s mindset is the best tool for building wealth.
Been working from home since 2014. I've been more productive than I ever was in an office.
If all job duties can be done remotely, WFH should be an option. There's really no reason to force people to waste time commuting and come into an office.
Easiest way to beat the market:
-Buy winners. Companies with a strong market position, that consistently grow sales and EPS, have high margins, outperform $SPX over the last 5 years.
-No investments with a high probability of losing all your money: meme stocks/coins, short-term options.
-No short-term thinking. Plan to hold at least 5 years.
-Do less. You don't need to invest in something new every day.
The Amex Platinum, Chase Sapphire Reserve, and other premium cards make zero sense for most people. They're marketed as luxury products but they're more like expensive coupon books.
They can be worth it if you travel often and don't mind using their travel portals. Or if you want to earn the sign-up bonus and cancel/downgrade after the first year.
Most are better off with a cheaper travel card (like the Chase Sapphire Preferred) or a cash back card (any 2% card or Amex Blue Cash Preferred).
Stocks like $NKE and $PYPL are a good example of how price anchoring leads to poor investment decisions.
You get fixated on a specific price: the stock's peak, or wherever it was when you originally invested, and you figure that's what it's really worth. If it's trading for less, it's "on sale," and you should double down. You tell yourself "this is a $100 company trading at $35."
A company's value depends on its current financial results and its future growth opportunities. It has nothing to do with whatever the company was worth last year or five years ago. "It has to bounce back eventually" is never a good reason to invest in a company.
Investing credit card rewards is an easy way to add to your portfolio. You can technically do this with any cash back card - just redeem for a statement credit and send the money you save to your brokerage account. But there are also some cards that let you deposit your cash back directly, including:
Robinhood Gold Card: 3% back on purchases that you can deposit to a Robinhood account. Requires Robinhood Gold ($5/month).
Fidelity Rewards Visa: 2% back on purchases, deposit to Fidelity account.
Bank of America cash back cards: Can deposit to Merrill Lynch account.
Chase cards: Can deposit points/cash back to JPMorgan account.
At 2% to 3%, every $10,000 you spend is $200-$300. If you spend $50,000 per year, that's another $1,000 to $1,500 invested.
I called it wrong with $SPCX. Wrote an article in July when it was about $135 predicting it'd be trading in the $110-$120 range in September, mainly due to the valuation and insider shares unlocking.
It fell even lower than that but bounced back quickly and has been around $150 for most of the month.
SpaceX stock has been a lot more resilient than I expected. But we're also in a bull market, which has helped. In a bear market, high valuations usually compress.
I've liked SpaceX as a company from the beginning. Still have it on the watch list for the time being, as I think there are better investment opportunities available right now. At a $2 trillion market cap, it's in the same range as businesses like $TSM, $META, and $AVGO, all of which make a lot more money and are highly profitable.
I've been self-employed for 12 years. It used to feel a lot riskier than having a job. Now I think it's the safer path.
A job's one source of income that you can lose at any time.
Self-employment means having multiple clients and knowing how to find more when needed.
There's so much free money out there. Bank account bonuses. Broker bonuses. Credit card bonuses.
Financial companies will practically throw money at you to be their client, especially if you have a good credit score.
Pretty easy to make $1k+ per year this way.
I can't imagine buying a home with mortgage rates at 7.45%. Terrible deal. Glad I don't mind renting.
Better move right now is to invest heavily. Get your portfolio as big as possible, maybe buying will be more advantageous in the future.
You don't need to take profits when a stock goes up. If you still think it's a good business, why would you?
A huge key to success as an investor is hanging onto your winners.
$META is a great example and a favorite of mine. It literally just turned things around. I think long term it still has plenty of room to run. The last thing I'd do is sell now, this is a company I want to hold for the next decade.
"It's never too late" is terrible investing advice (and life advice, but I'm gonna focus on investing here).
I see this all the time, usually followed by some story about how the writer didn't invest in their 20s but really buckled down in their 30s and caught up.
But in your 30s, you still have decades of prime earning years left. I never see anyone say "I started with nothing at 65, and I'm doing great now!"
Because by then, in all likelihood, it's too late.
The longer you wait, the harder it is. Start in your 20s, you can build wealth pretty easily. Start in your 30s, it takes some extra work. Start in your 40s, and it's an uphill battle.
Start now. Do things with a sense of urgency. Don't assume you have all the time in the world.
The problem with compound interest calculations is that nobody dreams of being a multi-millionaire at 65.
When you're 25 or 30 it's not very motivating to think "Just 40 years of grinding and I'll be rich!"
I like a more aggressive approach to building wealth. Maximize income, invest in individual stocks, get to seven figures when you're in your 30s or 40s and still have plenty of time to enjoy your money.
Underrated investing skill: Being able to sit and do nothing.
You don't need to invest in something new every day or micromanage your portfolio.
Do your research, invest in great companies, and give it time.