Tag: finance

Be wrong; but don’t stay wrong

In Investing, you can’t know everything. But once you understand the most important basics like a target company’s financials, moat (business’ ability to maintain competitive advantages over its competitors), product-market fit, management, risks than you have enough information to make an investing decision.

happy woman in headset sitting in cockpit during helicopter tour
Photo by Maarten van den Heuvel on Pexels.com
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Photo by Francesco Ungaro on Pexels.com

“An investment in knowledge pays the best interest.” – Benjamin Franklin

Lets dissect this:

  1. Invest in the best high-growth businesses
  2. Pay up for a compounding machine
    Quality > valuation investing
    Invest when management is top notch v. Hold onto winners
  3. Be ruthless in cutting losers
  4. Be wrong; but don’t stay wrong

Rules are simple to Explain but Hard to Execute

“Invest, Rather Than Save”

The one important rule in finance to become wealthy: “Invest, Rather Than Save”.

The financial systems punishes savers, (ever heard of double digit savings rate?) and rewards investors. This is done systematically devaluing the USD every year, so you’re losing even though you think you’re winning. If you save, your money becomes less valuable. If you invest, your assets become more valuable.

Education is the great equalizer. Have skin in the game and understand the rules well enough to break it.

Save $1000 a year

There’s a program called Digit that has helped me avoid overdraft fees and automate savings. Digit skims small amounts automatically from your bank account: few dollars here and there. They analyze your spending and pull tiny amounts from your account, so that you save without noticing.Screen Shot 2019-05-26 at 9.26.12 AM

Their algorithm looks at your spending patterns, learns how you spend, and automatically saves tiny amounts. You don’t have to adjust your lifestyle. They’ll learn your habits, and automate the savings for you.

They offer overdraft reimbursement, which means you’re protected from the risk of them saving too much. If you overdraft (which you won’t), they’ll pay the fee.

You spend less than 10 minutes signing up. You could save $1,000 a year. And you won’t even notice.

Make this your quick win for the week.