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In the 40 years I’ve been investing, I’ve made a few inspired moves and lots and lots of dumb ones.
Accentuating the positive and eliminating the negative is the key to success in investing, as well as most worthwhile endeavors in life. The question: How do we go about it?
The path most of us choose is the least efficient: stumbling around, making mistakes and gradually learning the habits and processes that most often result in success.
A better method? Learning from other peoples’ mistakes rather than your own, and adopting habits that have been proven successful by those who came before you.
That’s what this week’s “Money!” podcast is about. We’re going to discuss numerous habits of highly successful investors.
As usual, my co-host will be financial journalist Miranda Marquit. Listening in and sometimes contributing is producer and novice investor Aaron Freeman.
Sit back, relax and listen to this week’s “Money!” podcast:
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If you’re not able or willing to listen to the podcast, the entire, unedited transcript is below.
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Want more information? Check out these resources:
- The 10 Golden Rules of Becoming a Millionaire
- 7 Secrets You Should Learn From 401(k) Millionaires
- 28 Investing Tips From Today’s Financial Geniuses
- Fidelity: 6 habits of successful investors
- U.S. News & World Report: 7 Habits of Successful Investors
- Bloomberg: The 7 Habits of Highly Effective Investors
- CNBC: 6 habits of successful investors
- Charles Schwab: 7 Habits of Highly Effective Investors
- Money Talks News’ savings account search tool
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- Take our course The Only Retirement Guide You’ll Ever Need
- Take our course Money Made Simple
- Miranda Marquit’s website
I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.
Computer-Generated Show Transcript
The 15 Habits of Highly Successful Investors
Stacy Johnson: [00:00:00] Hey guys, and welcome to the money podcast today. We’re talking about how to play and win the investment game. Specifically. We’re going to talk about the 15 habits shared by highly successful investors. In short, we’re gonna give you the tips to make you both smarter and richer, and we’re going to do it without bore you to death in the process.
I’m your host, Stacy Johnson. I’m here with my cohost Miranda. Mark would say Miranda. Hey. Oh, and producer and novice investor. Erin Freeman say higher ed. Hello? How’s it going? Okay guys. Ready to rock? Let’s do it. But before we do a quick disclaimer for you out there, folks, you may hear the names of stocks or other investments on this podcast, but that doesn’t mean they’re recommendations.
You never invest based solely on our advice because it may not relate to you personally, get your own advice, make your own decisions. Let’s get into our thing today. We’re going to talk about the habits that make investors successful, who would like to lead us off let’s
Miranda Marquit: [00:00:56] let’s have a look. No yeah, no, I think, I think that’s an important, and I think you know, making sure that we are being successful investors as a good thing, and I think one of the best things you can do is start with a plan.
So put together a strategy, think about a plan. You know, well, well, it works to just go ahead and start setting some money aside. You know, if, especially if you have a small amount of money and you’re using your company’s retirement plan once you get past that, it’s really time to have a strategy and figure out what you want that money to accomplish.
So put together a
Stacy Johnson: [00:01:28] plan and, you know, I, I don’t disagree with that, but you know, when I read that one, first of all, let me say this. When I was researching for this podcast, I pulled up, I don’t know how many, there are maybe eight or 10 stories, all of which are pallets of highly successful investors.
They’re from Bloomberg and CNBC and U S news world report, blah, blah, blah. They were all crap. Honestly, I did not like them at all. And so I sat here this morning and I put down 16 things that I think are habits of highly successful investors. And it reminded me of that Miranda because you said plan. I’m a successful investor.
And I don’t know that I’ve ever, you know, literally planned. I mean, I’m talking about just in investing, it’s good to have a plan in your life, you know, goals that sort, but when it comes to investing and less and less a plan means. No, don’t invest. Don’t be an idiot. Don’t take stupid rumors, you know, or stuff like that.
I tell myself that every day, it just, it doesn’t work all the time, but I mean, as far as like, I’m going to do this by then, you know, I don’t really do that when I see something that I think I should invest in, I invest in it and, and, you know, also, I, I tend to invest a lot more when the market sucks. Then when it’s high.
Well, and I think that’s
Miranda Marquit: [00:02:43] a plan. Yeah, actually, that’s, that’s what I mean by a plan, like have an idea. Okay. Well, if I want to grow my wealth to X dollars in my portfolio, I need to figure out how much I should be setting aside. That is a plan. Okay. I would like to figure out, you know, like I, like I personally, right.
I have money. I have cash that I keep on the sidelines and say, when we have a market crash, I put an extra money. Other than that, I dollar cost. Cost average. And like, my money goes to different. Like it goes to my travel fund, it goes to my emergency fund. It goes to my retirement account. Like, so I have a plan for that money.
Right. And it’s going, and I set aside a set amount of money each month for each of these goals. And then I also have money on the sidelines that when the market crashes I can put. Extra money in. So like, that’s what I mean when I’m talking about a plan, like have some sort of a strategy for where your money’s going and what you’re doing with it.
So that you don’t freak out. Right. And so,
Stacy Johnson: [00:03:43] yeah, that, that makes total sense. I
Aaron Freeman: [00:03:45] think one of the first things you should do. Is listened to money with Stacy Johnson as much as you possibly can.
Miranda Marquit: [00:03:52] Yeah. Okay. So that’s that’s number two. So number one is have a plan. Number two is listened to this podcast. So, all right.
We’ve got two great, great habits already. What’s number three. There you go.
Stacy Johnson: [00:04:03] Yep. You know, here’s something I said and you guys have a lot of stuff. I’m going to say today. You guys have heard me say before, but hopefully the people listening won’t be bored, but like you’ve heard me say not long ago, don’t confuse luck with talent.
And I think there’s a lot of people in danger of doing that right now. I mean, you bought zoom at 50 and it went to 300 and you think you’re a genius, but the rising tides float all boats. Now let me, let me throw it one more stupid idiot. And then I’ll have three of them, a hat trick of bear or bears make money bulls, make money and pigs get slaughtered.
So don’t think because the market’s going up floating all boats, that you’re a genius because it was administer. You think you’re smart? You’re not. You agree. I agree.
Aaron Freeman: [00:04:46] People are going to go back to their offices,
Stacy Johnson: [00:04:48] definitely for a woman to just tripled her money and doge coin. Cause she thinks she’s an expert at crypto.
Miranda Marquit: [00:04:55] Well, I mean, I’m an expert about writing on crypto, but I wouldn’t call myself an investing genius because I played around with doge coin
Stacy Johnson: [00:05:04] and it just made a bunch of money at doge coin guys, for those of you who don’t know who don’t listen regularly, I too have made money at crypto. Although I didn’t, I did not triple my money in a week.
But I have made money in crypto, but I certainly do not consider myself an expert. I consider myself lucky, not smart. And, but believe me, you get that feeling, you know, when you, when you buy stuff and it goes up to the next day, you do get a feeling sometimes that, you know what you’re doing. I’m not, and I’m not suggesting you don’t know what you’re doing, but you know what I mean?
The market, what the market give us, it can take it away. I’m just, I’m just talking completely an idioms today. Okay. Here’s another one. I have to be a successful investor. Invest in things, you know, look around you. There was a book called one up on wall street by Peter Lynch. You guys ever hear of it or read it?
Miranda Marquit: [00:05:51] I know who Peter Lynch is. I have not read the book.
Stacy Johnson: [00:05:54] It’s a great book. Peter Lynch was the investment manager for fidelity Magellan fund, which back in the day. When you guys were in high school probably was the largest mutual fund in the world. And he’s anyway, it’s a really well-written book. I advise you our listeners to read it.
It’s cause it’s not, it’s not hard to read at all. It’s not technical, but what the point was, what Peter does, he says, look, just look around the reason I own apples. Cause I saw everyone carrying around an iPad. And, and he was saying like, your, your kids are dying for this sneaker or this, you know, these outfits look at the stores that sell that stuff, see what people are doing because successful investment ideas are likely all around you.
I bought Facebook because every time I went to a restaurant, my wife was like, I’m like, what are you doing on your phone? I’m just, I’m letting everyone know where we are checking in. I’m like, what the hell are you talking about? But then I noticed that everybody was on Facebook. So I bought Facebook at $89 a share.
Now it’s 300. And I’m and I’m on Facebook now, some, but I said to my wife, the other day, I said, don’t, you tend to make you mad that I told you to buy Facebook and you didn’t. And she said, no, well, you bought it. So what difference does it make anyway? So look around you. Yeah. You, you will find investment ideas all around you.
If you just pay attention to what’s going on and then simply go and see if the companies are publicly traded. It’s not the, that’s not the end of your research, but it’s a great place to begin research. Got it. Got another w what habits have made you successful? So
Miranda Marquit: [00:07:16] I think, I think getting started a lot of the time just like getting started and getting started immediately.
A lot of the time we. We don’t get started. We think it’s, you know, we worry that we’re going to choose the wrong thing, or we don’t have enough money, but today we have, there’s so many things that you can do. You can invest in index ETFs. There are fractional shares you can get started investing with as little as a dollar.
So I think getting started is actually one of the best habits, right? Just, just doing it.
Stacy Johnson: [00:07:44] That’s a good fair. I think that’s good. A lot of people sit on the sidelines. You know what my dad used to say, you can’t get a hit from the dugout. I’m telling him all expressions today. I can’t stop. How about this one?
Cut your losses short. Let your profits run. I meant, I know I mentioned this on a previous podcast, but too many people and now I was a stockbroker, right. So I had a lot of clients and you know, the stock goes up two points. They sell. Cause you can’t, you can’t go broke taking a profit and then a stock goes down two points.
He’s like, well, when it comes back, I’ll sell it. And then it goes down four points and it goes down to six points. Oh yeah. When it gets whenever, as soon as I break even I’m out of this thing. Well, the next thing you know, you made two points. I want to talk and lost six on another one, and that is not the ticket to profit city.
So you you’ve got to the reason I own so much apples cause I bought it a whole long time ago and, and I still own it today. About 20 years ago. And I still own it today. And boy it’s, it’s made up for a lot of bonehead moves because I’ve made so much money in that one stock it’s made. It’s made up for a lot of bad moves that I’ve made in other stocks.
So cut your losses short, let your profits run one way to do that is another, another tip. I have pay attention, but not too much. If you want to be rich. Buy into high quality stocks hold onto them for long periods of time. Like I did with Apple. If you want to kick yourself buying a high quality stocks, then sell, but to drop a hat based on something you saw on CNBC or you read online.
And that’s what you’ll do. Do you have any times I watch CNBC every day. I’m on this website all day. And then I watched Jim Cramer. I watched fast money. You know, I watched this thing. Do you want me times I would have sold Apple if I’d listened to everybody on TV. Oh dear God. Right. So pay attention, but not too much.
And let your pride.
Miranda Marquit: [00:09:27] Yeah, I think though, that is another good habit. Right? Ignore. Excessive noise, right? Another good habit is, is kind of ignoring the noise and, and paying attention to once again, that, that whole planning, you know, watching the profits, finding something good,
Aaron Freeman: [00:09:43] it’s kind of hard to like ignore the noise at the same time you know, study everything to become, you know, knowledgeable enough to know what it is that you’re doing.
You know, cause you got to listen to all these people, like Kramer’s telling you like, Oh my God, you know, sell your stuff now. And you’re like, well ignore these people because we know the long run, the long run and you at the same point in time, if you’re a new investor, you got to listen to learn how to
Miranda Marquit: [00:10:06] ignore them.
Fun fact, I’ve never actually watched Jim Cramer. He’s kind
Stacy Johnson: [00:10:10] of fun. He’s kind of, he’s fine. He could be annoying, but I’ve watched him for 20 years. I mean, really I’ve
Miranda Marquit: [00:10:15] never actually, I’ve never actually watched it, but, but that goes back to, I mean you know, I’m boring AAF and mostly index. So, so I don’t need to watch Jim Kramer
Stacy Johnson: [00:10:25] and there’s nothing wrong with that either.
I mean, I, as you, as we all know that these, the three of us know I’m a huge stock investor. I have 35 different individual issues with stock. But I also own mutual funds, too. Nothing wrong with that at all. But, and a lot of these rules will still apply. Even if you’re just a mutual fund investor. And for example, what you just alluded to Erin, which is another one, one of my habits always be learning.
Always. I’ve done this for 40 years. I’m watching TV every day. I’m reading. I have a grade and now this is part of my job, but I read at least 20 articles every single day. Well, every single weekday and I, and I usually watch a couple of hours of Bloomberg and CNBC. Every day. I wake up at four o’clock in the morning because I’m old and I’ll record these shows and watch them at four in the morning.
Because my wife won’t have anything to do with it. She, you know, to her that she’d rather watch a static. You know, I watch this stuff every day. I’m always learning stuff and
Aaron Freeman: [00:11:22] putting your money into it too. It’s it starts to become more concerning. You’re like, well, my money is in here. I butter. And I think,
Miranda Marquit: [00:11:28] I think that’s important though.
I, I like that always be learning, but. As you’re learning, I think understanding, okay, what’s sensationalist noise. That’s, you know, meant for clicks and ratings and what’s actually going to apply to your personal portfolio. And I think part of that always be learning is also, you start learning how to weed out the things that aren’t serving you.
Stacy Johnson: [00:11:50] How about this always be learning. Always be discerning. Ooh.
Miranda Marquit: [00:11:54] Yeah.
Stacy Johnson: [00:11:56] Now creating new expressions.
Miranda Marquit: [00:11:57] Great. I love this.
Stacy Johnson: [00:12:00] And, and, you know, actually point well taken though, Brenda, because you know, a lot of stuff you’ll see, like CNBC every morning, they’ll have some CEO on. Or every app all the time, frankly.
And so does Jim Kramer and you know what? I don’t really pay attention to that because he’s hyping his own company. What do you think I’m going to go on there and say money talks is a risky bet. Don’t hate money. Talks news. I’ve been so lucky. It sucks. It’s horrible. Don’t ever go. I’m going to do that.
Put me on CNBC. I’ll be like, Oh my God, I’ve discovered the internet. My website is the best website that ever happened. So a lot of people, you know, you can’t believe what they’re saying. So why listen to them. They’re selling, they’re being salespeople. So there’s a lot of stuff that I, as you said, I’m discerning of what I listened to.
If they’ve got an ax to grind, they’ve got a dog in the fight. I’m not listening to what they have to say. And are you saying by saying those
Aaron Freeman: [00:12:49] two things, like a couple of things that you’ve already mentioned so far. Are you saying that we’re just, we should just pay attention to the masses only when it comes to investing
Stacy Johnson: [00:12:58] now?
No, no, no, no. Here’s what I would say. I would say both of these situations, both when you see people around you doing something or buying something, and when you see a CEO pumping up his own company that may bring, it brings something to your attention. That’s where your research begins, not where it ends.
So it’s fine. If some CEO gets on to Jim Cramer show and says, you know, we’ve got this new thing, like, okay. I just, in fact, just last week, I can’t think of the name of the stock. W we’re we’re going to be able to do the Corona virus vaccine with an inhaler. Or w where with the pill? I think it was an inhaler, actually, whatever.
That’s an interesting idea. And so I’d look, I’m going to look at this company I did, but you know, th there’s a whole bunch of other things that go into it. So the CEO did bring it to my attention, but that’s that doesn’t make me buy it. So I have to go and see if they have any hope of making money. How long has this guy been in the business?
What do analysts think? Are there other people on message boards and stuff you’d like to stock? You know, there’s, there’s a lot of ways that I look at. I try to you know, I put these, I put my suggestions through a funnel and see how they come out. But, you know, and I, you know, there’s also a loot, like Miranda was saying about a plan.
When you look at a stock, you know, what is your plan? How do you evaluate it? How do you vet the stock and keep that in mind? So, in other words, let’s say I bought Facebook because it was, it had a PE less than its growth rate. So it’s growth rate. It’s growing at 30% a year. It’s probably starting ratio is only 20 plus they developed a way of advertising that nobody else can duplicate.
They have so much information on their users. You think they’re getting something for free or actually they’re actually the product. But anyway, they they’re getting so much information there and they’re able to segment their audience so well that advertisers are going to pay extra for that and that unique.
I mean, Facebook has a lot of information. Other companies don’t have, so does Google. They’re following you around the internet. They know exactly what you’re buying, what you like, and they can channel it directly at you. So because of these things, it’s growing faster than the, than the PE. And it has this, this thing is going to be very difficult to duplicate for, for targeted advertising.
So for those two reasons, I’m going to buy the stock. Now, how long am I going to hold it until those reasons no longer apply. Right. Yeah. So it doesn’t matter how high it gets or how bad the market gets until somebody else comes up with another method or a total its growth rate is under its price earnings ratio.
I’m going to hold the stock. It’s a plan. This is my point. You see? All right. All right. Oh, and by the way, I’m sorry. Cause I’m droning on, but we have to take a really quick break. We’re going to be right back with some more of these things that you really need to know. You’re going to have to develop these habits.
If you want to be a successful investor, we’ll be right back. Okay. Welcome back. Let’s get to some more of these things. I don’t know how many we’ve covered. I should have numbered them, but at any rate, any, have any other ideas, Miranda Aaron.
Miranda Marquit: [00:16:00] So I think consistency. So investing consistently is important.
You know, I mentioned dollar cost averaging a little bit earlier. Dollar cost averaging is this idea that you put in the same amount of money on a regular basis. So I personally put the same amount of money every week into these different goals. And so I think consistency. Is hugely important and get used to doing it and prioritize investing in your financial planning.
Right? So when I’m putting together my spending plan investing gets prioritized and I’m consistent about it. And that is part of why I’ve been able to grow my portfolio over time is because of this consistency.
Stacy Johnson: [00:16:37] Very cool. I like it. And it’s true. And I agree with you. What about being flexible? You don’t, you’re not the first investment I ever made was.
A house. So in other words, I made as much money in real estate as having stocks. And I was a stock broker. You have to invest in stocks for 40 years. I’ve also invested in real estate for 40 years. I, my first house I bought with another guy because I couldn’t afford it myself by myself for $28,000. And so I’ve also owned classic cars.
So the point I’m making here, good habit be flexible. Don’t be tunnel visioned on one thing. If you can, at least if you have the, you know, the wherewithal and the attention span to do it, I’ve, I’ve invested in real estate. What about peer to peer lending opening a business, which I also obviously have done.
So, you know, the stock market is not the only way to make money. It’d be, be flexible and be open to other things that might make you money. I bought the house next door to me in the last year session for 360 grand, I sold it for 625, again, with a partner actually. But you know, so be, be open to learn, learn it as much as you can to be flexible, go wherever you can make money.
Miranda Marquit: [00:17:41] Yeah. I think that’s a really good point. I like this idea of, you know, being flexible, learning more and, you know, because it’s uh, you know, we talk about how like, yeah, for the most part, I’m an indexer and boring AAF. But now that I’m feeling a little bit more confident in my portfolio and learning more about, you know, taking the time to learn more about individual stocks, taking the time to learn more about these alternative investments.
I’m trying some things, right. I’m trying new things. I’ve, I’ve bought a few individual stocks. I’ve dabbled in some cryptocurrencies. And so I like this idea of being flexible and not completely not completely like you know, shutting it all down. And, and, and being, and being stuck in one lane and, you know, every now and again, I think about real estate, I’m still like, eh, my whole lot of work to me, but I’m looking at, there are some other ways to do that.
Like investing in with real estate syndications and, you know, putting your money into these other people who manage the portfolios and then you, you know, invest with them and they give you a portion of their returns. So I’m looking into that. I don’t know if I’m going to do it, but it’s an interesting way.
Beyond real estate investment trusts, which I do have in best, you know, which I do invest in it’s a way of looking at real estate, just beyond that as well. So I like this idea of flexibility, learning new things and trying new things. You just, you just. You have to be aware that like, okay, while you’re doing this you could end up, you know, losing some money.
And so you do need to be prepared for that. I would
Stacy Johnson: [00:19:11] like to learn more about that myself. Right. And maybe we should do a podcast on that one day. Yeah. If have you written,
Miranda Marquit: [00:19:16] I have not yet, but it’s on my list of things to do.
Stacy Johnson: [00:19:20] How about this one, knowing your risk tolerance, especially when you’re talking about going to all kinds of things like crypto or you know, things that may be a little, a little riskier w w I want everyone to picture your, you live on the Serengeti.
Are you going to be an old lion? Are you going to be a young rabbit? There’s somebody tell you something. I want you to be an old line. I want you to be, you’ve seen everything. You’ve done everything, and you ain’t scared of nothing. You’re going to hold stand your ground, as opposed to when the market crashes being a rabbit, darting everywhere, freaking out and not knowing what the hell you’re doing.
So, and how do you do, how do you become that old lion with well experience, obviously one, but also knowledge know your risk tolerance. If you’re finding yourself staring at the ceiling at night, you got too much money in the stock market. Now think about how much you can, because the market will fall 50%.
We hope because that’s going to allow us to back our trucks up and fill them up with good quality stocks. So, but it’s got to happen. You’re going to be okay with that. And if you’re not going to be okay with that, then don’t do it. Know who you are. And everyone’s not the same. There’s nothing wrong with having a low risk tolerance, but don’t get caught, you know, cause you’re not going to be happy if you lose 50% of your money, especially if you need it.
So knowing your risk tolerance is really important. And especially now I think we, I think we keep saying this every week too, you know, there’s gotta be a correction here. And a lot of people who’ve only been in the stock market for 20 minutes are not going to be ready for it. Okay. What else? Oh, well here’s the, how about diversifying?
Miranda Marquit: [00:20:48] Yeah, I think so. I mean that, that diversity, I think one of the reasons that I was drawn to indexing was because I had, when I first started investing, I had such a small amount of money and Indexing provides you with instant diversity, right? You have access, you get this instant diversity you’re you’re if you’re doing the S and P 500, then you’re buying a little piece of everything on the S you know, the fi the 500 largest cap stocks in the market.
Right. And so that diversity is really good, but, you know, eventually you do want diversity across asset classes, as well as. Sectors and geography. And so, you know, I’ve got some bonds, I’ve got some real estate investment trusts. Now I have some cryptocurrency, I guess, that counts as diversities.
Stacy Johnson: [00:21:30] Well, yeah, it does.
It does. Now, one thing you don’t have that I do is real estate too.
Miranda Marquit: [00:21:35] And I have it in real estate investment trusts. So I do have exposure to real estate, but you’re right. But I don’t have like the hard real estate. I don’t have like the thing and yes, and I don’t
Stacy Johnson: [00:21:44] have a ton of it. I have a little around land and then the house I’m sitting in.
That’s about it. And that, that is a little bit more
Aaron Freeman: [00:21:49] labor-intensive
Stacy Johnson: [00:21:50] the real thing. Yeah. There’s, there’s something Aaron can comment on because he does this. Yeah. We’re
Aaron Freeman: [00:21:54] actually thinking about investing in a duplex here down the road pretty soon. Really? Yeah. Well, it’s kind of one of the markets, even though all the single family homes out there are gone crazy.
It’s one of those little spots that hasn’t gone crazy.
Stacy Johnson: [00:22:10] How far away? Well, if
Aaron Freeman: [00:22:12] like, if. If you find an investor who’s actually, or is holding out of the property and they’re just trying to sell it for a gazillion dollars. Cause they don’t care. You can’t buy those, but there are a lot of fixer-uppers out there that are just trying to be thrown away and they take a lot of work.
So that’s what I’m trying to say is like, yes, if you go down that route, when there’s a bad housing market, like right now where it’s unaffordable, you got to find the dirt. But that dirt is going to be very labor intensive.
Stacy Johnson: [00:22:39] So I guess you say Aaron is that you want me to go in with you on this duplex, but you’re going to do all the work.
Aaron Freeman: [00:22:47] That’s what you’re saying. That’s what I’m saying. It’s going to be a
Stacy Johnson: [00:22:49] little work. Awesome. I’m down by the way. You guys listening. Aaron is great. At fixing stuff, he’s fixed my boat on more than one occasion. He’s fixed my motorcycle. He fixed his houses. He knows everything about this stuff.
Aaron Freeman: [00:23:01] But to get there, I think Miranda, you alluded to something that was, that’s true.
Like you, at first, you, you invested slow and you’ve built it up to the point now where, you know, you’ve got some extra spending cash. So you’ve, you’ve messed around with, with some riskier stuff like Doris coin. And I think what we didn’t get to in the, in the beginning of this is to get there is that you have to spend less than you earn.
And that’s a mistake that I was making in my past where I was just blowing cash. Now that I don’t blow cash. I save every little penny. It grows quick. And then, you know, once you can put that money away, then you can invest your money to play with.
Stacy Johnson: [00:23:34] Well said, Oh, and you know, by the way, this is going to sound weird, but be frugal.
Not unlike what you just said, but do you know if you go to the mall and spend 200 bucks on clothes, if you’d invested that instead, the scald opportunity costs. If you’d invested that instead and earn 12% in 30 years, you’d have six grand. So every $200 you spent them all, it could be $6,000 in your pocket that could help you retire a month or two early.
Yeah. Do things
Aaron Freeman: [00:23:56] like that. So like, if you like are jonesing for, I don’t know, like an Apple iWatch or something like that, which helps us to invest in Apple. Yes. Like you ask yourself before, you know, do I really need, do I really need it? You know, is that really going to like majorly improve my life? Don’t need to spend that $200.
And if you are going to spend a $200 and you don’t need the iWatch, then go, like you said, go put that $200 in a stock market.
Stacy Johnson: [00:24:19] Yeah. Here’s an expression that I coined 20 years ago when I wrote my first book called life for debt. You can either look rich or you can be rich, but you’re probably won’t live long enough to do both.
What most people tend to do is want to look rich now. So you can impress their friends and they’re never going to be rich later as a result because they’re at the mall spending that $200 on clothes. What I chose to do is wear crappy clothes. I’m going to have the house, a third of what I could afford.
I’ve never owned a new car in my whole life, and now I’m rich. But I never looked rich and I still don’t look rich because I was still wearing crappy clothes and drive a used car. But, but you know, this is a, it’s a real, simple thing, folks. I mean, it really, it is, it works a hundred percent of the time,
Miranda Marquit: [00:24:53] so yeah.
Yeah. And I like to buy quality clothes. So, so they may not be like name brand clothes, but I like to buy quality clothes that lasts a long time. So they’re usually a little bit more expensive than like the super cheap stuff and they fit me better. But I also, I also don’t have very many clothes and most of my clothes are very.
Like basic primary colors that can make several outfits. And that I keep for a long time. Like I, yeah. And so I, I think, so I think for gallery too is about like, okay, what’s this quality you know, we’ve talked about in the past how I do actually in fact buy new cars, but when I buy a new car I buy it with very, you know, very low interest financing.
And and then instead of having that money go into the car, which is a depreciating asset, that money stays in the market. And so yeah, and then I drive my car for a long time. I’ve had my current car for 10 years and I’m currently like, it’s a good quality Subaru. So yeah, so I don’t look rich. And while I’m not rich, like you, but you know, I’m comfortable, rich and friends.
That’s right. That’s right. Rich
Stacy Johnson: [00:25:58] and old, like me either fair. But you know, but it’s funny though, because you know, the, the title of this podcast is the 15 habits of highly successful investors. So one would think what is B fruit will have to do with anything? Well, it has to do with everything because this is what allows you to have the, the money to invest.
So well done now to if I said this already be fearful when others are greedy and greedy, when others are fearful, you
Miranda Marquit: [00:26:20] have not, but that’s one of the best Warren buffet quotes.
Stacy Johnson: [00:26:25] Yes. What’d you guys think I was going to try to take credit for it? Forget we’re above it. Like, you know,
Aaron Freeman: [00:26:29] we’re just, you know, maybe
Stacy Johnson: [00:26:31] just who hasn’t heard it.
Well, it’s true. So, and, and, you know, and this is absolutely positively true. I actually just checked us this morning. I put $125,000 in the stock market, 2009, which was a ton of money for me at that time. And it’s worth $400,000 now. And, you know, because everything was cheap, cheap, cheap because, you know, because everyone thought the sky was falling, that we were all going to be, you know, hunting for aluminum cans on the side of the road.
I mean, everybody was really, really dismal. The outlook on the economy was horrible and that’s when you buy rich people ring the register when the economy is moving like now, but that’s not when they created their wealth. You get rich by investing, but nobody else will, when unemployment is high, the market’s tanking, everybody’s freaking out and there’s nothing but fear and misery on the horizon.
That’s when you want to back the truck up, it’s hard though. And the only reason I was able to do that 2009, it was because I was standing on this, on the sidelines, like a deer in the headlights for the two, two recessions previously in 19, in 1987 in 1991. And I, you know, I could go on and on 2001, I mean, I sat there and watched this happen.
And so finally, in 2009, I finally had enough experience. I’ve been around this block enough to know that, Oh, wait, this is what I’m supposed to buy, not be a coward. So it took me, it took me till I was 55 years old to, to get this message. So you guys, now you have it. You don’t have to wait till you’re 55 to do it yourself.
I hope so. Now, you know, now in the market side, I’m not really buying very much. I’m nibbling, like, you know, I bought a little crypto for, you know, something to do, but I bought it, brought a couple of stocks when I thought they were really cheap, but by and large, when the market’s tanking. That’s what I’ll be buying.
Miranda Marquit: [00:28:13] Yeah. And I think that’s a really good point. I mean, that’s, I, I kept putting money into the market all through the downturn I didn’t sell. And, and that’s, and that’s kind of what you need to do is just kind of realize that that’s when things are on sale and, you know yeah, you gotta, you gotta watch
Stacy Johnson: [00:28:32] out for that.
Yeah. There’s another expression. Wall. Street’s the only, only place in the world where when things go on sale, people are afraid to buy. So don’t be afraid to buy. When things go on sale, it’s hard to pick a bottom of course, but what you do Miranda and what most people do with 401ks, et cetera, is they’re buying every month.
Anyway, your dollar cost averaging. So you’re always putting some money and even if the market’s high, but when it’s low, you’re buying more shares. And when it’s too high, you’re buying fewer. So, you know, that’s, that’s a way to invest at the bottom automatically. And, and like I said, most people do that.
It’s a great system. I am just about, I have just about out of of habits. Here’s one more though, taking charge, being in charge of your money, seeking advice. Hey, always a good idea, but no matter who that advisor is or how smart they are, could be worried about it. Your money is always going to be more important to you than it is to them.
So if you’re not doing everything yourself, at least understand exactly what the hell is happening with your money, always be in charge. And I think that may run me out of a. Habits for successful investors. What about you guys? Anything else? I always say
Aaron Freeman: [00:29:39] let’s not forget. Anybody that has a 401k through their employer who matches.
Oh, thank you. And do that. That’s something I never did. And I wish I did that through my work history. I never a free money follow that
Stacy Johnson: [00:29:50] rule was stupid. And now I would also fees speaking it 401ks. You don’t have to pay you
Aaron Freeman: [00:29:55] to explain that one a little bit because You know, when I invest, I got a portal I invest through and they’ve got no, no fees for doing trades,
Stacy Johnson: [00:30:03] which has gotten a lot better and than I used to be.
But I did a story. You probably shot it. Did you shoot a story with me at a Ferrari dealership? One time?
Aaron Freeman: [00:30:12] No, that was before me. Okay.
Stacy Johnson: [00:30:14] Aaron, Aaron was as my videographers, we used to shoot news stories together. We stopped doing TV news not long ago, but anyway, we’ve worked at lots of stories together.
Anyway, if you hear here’s how these work, your 401k, your, your mutual fund, that you’re in your stock fund, your growth fund earned 8% last year. But what if it, what if it actually our nine and a half? And they took a one and a half percent fee. They’re they’re showing you at her date. They’re not showing you it actually or nine and a half, but after fees and all your date, they’re not telling you that.
They’re just saying it earned date. Okay. So now let me tell you this. If you pay that one and a half percent over your working career, it sounds like nothing, right? Over a hundred thousand dollars, depending on how much you’re making under 401k, a hundred grand, that’s so much money you just gave up and fees.
That’s what you could have had. But because if he’s where, how you did and you think, well, your employer, Oh my employer, like, let anything bad happened. They’re not going to pay me a bunch of fees. You have no idea. And they might not either. Cause they might not be smart enough to figure that out. So you really have to pay attention to fees.
However you invest
Aaron Freeman: [00:31:19] in the stock market scares you, but you still want to get in it. Cause you you’re like, Oh man, I really wanna do it, but I want somebody else to manage it. What would you say is a, a, a. A nominal fee to like, look for like what, what should be the average that should be charged out there that people would be like, well, that’s, that’s charged us too much at this.
Stacy Johnson: [00:31:36] pretty fair. I, you know, that’s, that’s a tough one to you’re talking about hiring. What I was alluding to was the fees that are built into mutual funds, which you’re alluding to now, I think is, is actual human beings that are giving you advice. It really depends on what kind of advice you’re getting and how valuable you think it is.
But, you know, nowadays they tend to, they want to have wrap fees, which are, you know, they’re charging you 1% of all the assets that they’re managing. I find that to be a little high. What I would prefer to do is when I need advice is to pay for it by the hour. That’s what I’d prefer to do, but again, you know, it depends there.
I can imagine a scenario where I’m tired of all this stuff and I don’t want to do it anymore. Then I would probably go to like a Vanguard or something like that. They have, they have I know they have mutual funds, but they also have people that’ll manage your money for a little less than
Aaron Freeman: [00:32:23] they say, like the only charge, like.
0.04% or something
Stacy Johnson: [00:32:26] like that. So would you say that they’re mutual funds, but you could actually have a human being that is a stock broker or investment advisor for you at Vanguard also. And I think they charge, I want to say this is off the cuff could be wrong, but I think like 0.6%. So you could do either one now I’ll probably never obviously have a.
Real human being managing my stuff, but I have, I have taken my portfolio, had showed it to investment managers before to see what they thought of it. I mean, you know, I’m not above getting advice, but I’m probably not going to be paying, but if you are paying, talk to several people compared their fees and their expertise and then make a decision just that simple.
I know we do have to go. Do you have anything else
Miranda Marquit: [00:33:05] Miranda? No, I think we’ve covered it pretty well. And I think you know, the main takeaway here though, is, you know, figure out what works for you and your investing life, because you know, all three of us have like different investing styles. So it’s kind of figure out what works for you and your investing life.
And then you know, start applying these habits to your own portfolio and see what happens. Oh,
Stacy Johnson: [00:33:26] that’s awesome. Oh, I’m sorry. Just thought of one more thing now. Don’t. Do stupid investment tricks. What I mean by that is zero sum games. I’m not going to go into that whole explanation again, but let me just put it this way.
Do not speculate with options. Do not speculate on futures contracts. Do you not expect under commodity futures? Do you not think, do sinks that are dumb and you’re going to be a lot better off. In other words, if you don’t screw up, you’re probably gonna end up with more money and wait a scripts to speculate.
Do not borrow money to buy stocks. You’re not use margin. Just don’t do anything dumb and all you have to do when, if you’re about to make an investment. You’re wondering if it’s dumb. Think to yourself. Oh, it’s Stacey dude.
Okay. Okay guys, I’m afraid we are out of time, but you know, we’re never out of topic. So dig a little deeper. You’re going to find links to lots more and phone or show notes. Remember if your goal is to make more, to spend less to retire rich, your online home is money talks, news.com. And don’t forget to check out Miranda’s online home as well.
That is Miranda. Mark. quit.com. There’s a link to her website is also in our show notes. You’ve got a question, comment or topic you’d like to suggest we’d love to hear from you. Email us at hello at money talks. news.com. That’s hello at money talks, news.com. And one last thing. If you appreciate what we do, do something for us.
Subscribe to this podcast. Also, you can give us a good review, too. It takes you two seconds. Really helps us. If you like us, show us and subscribe and tell your friends. You got a friend out there who wants to hear the stuff, you know, you do. So tell him, I’m Stacy Johnson
Miranda Marquit: [00:35:05] and I’m
Aaron Freeman: [00:35:06] . And I’m Aaron Freeman.
Stacy Johnson: [00:35:07] Thanks so much for hanging out with us guys. We’re going to see you right here. Next time.
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