My Worst Investment Ever Podcast

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 their idea about investing in something to be so convincing and confident in their arguments, that it puts a level of confidence in you. Put your emotions aside when making any investment decisions. Don’t be overconfident Be careful about being overconfident about an idea. Remember that the person selling the idea to you has been telling this story 1,000 times, they've figured out the hot buttons of the audience. They know what they're doing. No matter how smart you are, if you’re not careful, you can make mistakes with your money. Because smart people have feelings, just like everybody else.   Actionable advice Don’t make hasty decisions Before you make an investment decision, take some time out to yourself and sleep on it. Take a few days and let the emotion pass then see if that investment makes sense without the emotion.   “If you don't do things quickly, I think you'll always have a slow and less emotional approach to things and how you invest and probably do better off in the long run.” Max Weissberg   No. 1 goal for next the 12 months Max’s number one goal is to make the Karaganda film and have it in theaters. And also make a profit from it. This film tells the story of Vladimir, a prisoner in a Soviet prison camp on a mission to rescue his wife, a journey that will transform him into a powerful crime boss in Brighton Beach, Brooklyn. Max’s greatest desire is to prove that the crowd-equity model can work in the feature film industry too. So go on and support his crowd-equity campaign on Startengine.com/Karaganda.   Parting words “Be wise and get a good night's rest before you invest.” Max Weissberg   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 Max Weissberg LinkedIn Website Vimeo IMDb Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

... 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 saw sitting right on the showroom floor, a blue Honda Crosstour. She didn’t test drive it, she just signed the paperwork and left with a car she’d have to pay $663 a month for seven years. That amount was exclusive of insurance and everything else. Remember, she’s a teacher! While she had managed to get her ex’s name off the car by trading it off with a more expensive car, she also inherited all the debt to go with it. She had never envisioned her first car purchasing experience would turn out like that. Getting out of debt for good About a year and a half after buying the car Katie moved in with Denis and when the stack of bills came in the mail, Denis told her that it was time to get out of that mess for good. He told her that their relationship could not move forward until she got the debts in control. Either she would commit to pay off her debts or forget the ring. However, he was going to offer her all the support she needed to do it. Getting the debt-free plan together Denis, a chartered accountant by trade, got straight to work. He created an Excel spreadsheet and calculated everything. The total amount of debt Katie owed at this point was $200,000 worth of debt. Katie got so emotional and felt trapped. She simply couldn’t see how it would be possible to get herself out of so much debt. She had quit her job to move in with Denis in a new city. So how was she going to pay off that much money while jobless? After she calmed down, they took the Excel spreadsheet and devised an action plan. Denis committed to covering their basic living expenses and Katie committed to paying off her debt by the time she was celebrating her birthday that year. Selling off her assets To make it possible to pay off her debts Katie had to confront the possibility of selling off her assets. It was an emotional process but it had to be done. She had earlier bought a house for $100,000. Luckily, the house had appreciated and its value was now about $120,000. She was able to sell that for quite a bit of a profit. She put the $19,000 from the sale towards her car loan. Next to go was the car. It was now worth about $20,000. She tried selling it privately on Craigslist, and other car sale websites without any luck. One day, right before Thanksgiving 2017, she got fed up and decided the car had to be gone by Christmas. She took it to a random dealership and after inspecting the car, they offered to buy it for whatever amount she wanted. So she sold it off for $18,000. The sale was so easy compared to the turmoil she had gone through when buying it that she was a bit disappointed. She expected it to be harder. Getting down to zero debt After selling her house and car, Katie still had a ton of debt to pay off. She still owed about $50,000 in student loans and a small medical bill. They decided to pay off the medical bill first and then figure out how to pay the student loan. When Katie graduated, she had about $33,000 in student-loan debt but she deferred her payments. So when she started paying it back, she owed about $45,000. So it helps to start paying off student loans as soon as possible. They did more mathematics to see where they were with the debt and how much Katie needed to be debt-free by her birthday. It turns out she had to make payments averaging about $3100 a month towards her debt. Once again, she was in tears because as a teacher she was making about $2200 a month so she had a deficit of $900. She had the option to push back the dates and pay off the debt after her birthday. However, she chose to stay the course and stick to the goal of being debt-free for her birthday. Eventually, she did it but not without setbacks She picked up like a million side hustles. She did everything from charging electric scooters, to shipping books for an author, creating pins on Pinterest, tutoring, basically anything that could make her extra money. She managed to pay off her student loan about two weeks before her birthday. There were some setbacks along the way though. When they decided to follow the debt-free plan Katie had to get a job and she did. However, she couldn’t use the Metro to get to work. She needed another car. Remember, she had just sold hers. They ended up buying a car for $12,000, increasing the amount that she needed to pay off. However, this was much better than the $50,000 car loan she was paying off last time. Another setback was that they had their wedding coming up in July. Katie’s birthday is in May. So it was a very small gap in terms of saving up for them. They had committed to not going into debt for the wedding. So on top of paying off debts, they had to save up enough money to pay cash for the wedding. Commitment pays Katie’s commitment and hard work to stay the course paid off as they were able to pay for their wedding in cash. She also paid off all her previous debts. Most of the gifts that they got for the wedding were cash. So after the wedding, they had extra money laying around for the first time. As of last month, they are debt-free.     Lessons learned If you don’t feel right about something don’t do it Katie remembers the day she cosigned the car loan for her ex vividly. She had this nagging feeling in her stomach. While she didn’t understand the loan process, she had a sixth sense that told her something was not right about the whole scenario. Unfortunately, she ignored her gut landing herself in trouble with the creditors. From this she learned a huge lesson: if you don’t feel right about something, don’t do it because, at the end of the day, it is your name that will be on that line. You might think it’s just a stupid little paper, no big deal. But the creditors and the lenders do not feel the same way. At the end of the day, it’s going to be your tail working two or three jobs crying and exhausted having to pay that debt off. Understand what you’re signing before you put down your signature Never cosign a loan for somebody you’re dating, ever, or any other adult for that matter. But, if you must, always be fully aware of what you are signing up for. Do your research and make sure you are making the right decision. The decision you make now is going to impact you later on in your life. That piece of paper you put your signature on is legal and binding. You are going to be held accountable. Understanding the terms of that documents is therefore critical. Be deliberate with your debt-free plan One of the reasons why the couple was able to get Katie out of debt was because they were deliberate about being debt-free. They put a debt-free plan in place after figuring out where they wanted to go. If you’re in debt come up with a reasonable plan and follow through with it. Re-evaluate your plan now and then and always work on achieving the goals of your plan. Put your priorities in order The secret of how to become debt-free on a low income is to put your priorities in order. Like Katie, you have your everyday bills to pay off as well as different types of debt to clear. It’s a tough situation to be in but you can do it. Put your priorities in order, cut back on your spending and spend only on what is important and necessary. If necessary, work an extra job or have a side hustle on top of your full-time job. Then put all that extra money towards your debt to help pay it off quicker. Seek help from a financial advisor You may not have a Denis to help you stay the course toward a debt-free lifestyle but that doesn’t mean you should do it alone. Go to a financial coach and ask for advice. If you have no one that you feel that you can go to, go to a financial advisor, a professional in the industry who can help break things down for you. The truth is that you can’t do it alone, reach out for help. Don’t bury your head in the sand Pretending that the debt does not exist will not make it go away. Don’t practice the ostrich technique when it comes to paying off your debt. And that’s sticking your head in the ground and you pretend it’s not there. Don’t do that.     Andrew’s takeaways Don’t help others until you can help yourself It doesn’t matter how much you know someone, if you’re not financially capable to help yourself, don’t go helping them. You should refrain from cosigning loans at all, especially for people you’re in a relationship with because chances are it will get ugly. Don’t do things in isolation, especially where your money is concerned Even though you may feel confident in your decisions, always talk to someone before you go ahead and put your money on the line. Even the best professionals in the financial world talk to other people when considering their investment options. Don’t put your money where your heart is Never invest or get involved financially with someone you’re in a relationship with. Now, there are times that such things can work out. But it’s a danger zone. The best option is to not do it and avoid entanglements as much as you can. Have someone you can turn to for advice Identify someone that you can go to for advice even before you get into financial trouble. Ask yourself right now who your go-to person is. If you are in financial trouble, who would you go to? They could be a sibling, parent, colleague, or friend. Designate that person today so that when that financial event comes up, you have someone to turn to for advice before you make the wrong choice. Don’t get attached to things We’re all going to be dust under the ground someday. So don’t build up your life around attachment to the material things you have. Sell off that house if it will dig you out of debt and get you out of negative equity.     Actionable advice Katie and Denis’s advice is to be very aware of what you’re signing and understand the legal implications of everything you do. Just because you’re young is not an excuse for not understanding what you’re doing. If anything, that’s the most critical time that you have to fully understand what you’re doing, and do your homework.     No. 1 goal for next the 12 months Denis and Katie’s number one goal for the next 12 months, now that they’re finally debt-free, is to save up for a house. They are looking to put up a 20% down-payment in the next 12 months.     Parting words   “No matter how scary it is for you to face the debt demons, get it over with and face them now, because it’s not going to get any better. Katie O’Brien   “There’s a lot of great resources online about negative equity that you can use to make the debt load a lot easier.” Denis O’Brien       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 You can also check out 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 Denis and Katie O’Brien Podcast Twitter Facebook Website Email Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast    

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 are underperforming. Dan plans to take full advantage of this.   Parting words “Read chapter 20 of The Intelligent Investor by Benjamin Graham. I still read it every month. Do it. Just do it.” Dan Ferris   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 You can also check out 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 Dan Ferris LinkedIn Twitter Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Benjamin Graham (1949) The Intelligent Investor: The Definitive Book on Value Investing  

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 every problem has to be escalated into a big problem. Sometimes it’s better to walk away from a fight because it’s just not worth the time and energy, especially if it’s going to cost you a lot more. There’s always room for negotiation Agreements are not set in stone. Just because it’s in writing, doesn’t mean that it can’t be changed. Always try to negotiate. It doesn’t hurt to ask for what you want. Not everything has to go into a confrontation A confrontation is not always the best solution in the business environment. Try to talk about it and if this does not work out then walk away.   Actionable advice Make sure that anything that is of consequence is contained in a legal document and everyone has a clear and mutual understanding of what is written there. It may not always protect you, but it’s at least one barrier to prevent further mishaps.   No. 1 goal for next the 12 months Rick has three successful brick-and-mortar businesses and a couple of consulting businesses. Next, he wants to try online businesses to allow him to travel more and probably live a digital nomad life enjoying different cultures.   Parting words “Before you spend any money, get some legal advice and draft up a piece of paper.” Rick Nicholson       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 You can also check out 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 Rick Nicholson LinkedIn Website Facebook Email: ricknicholson@wizardofads.com Connect with Andrew Stotz Astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Malcolm Gladwell (2019) Talking to Strangers: What We Should Know about the People We Don’t Know                

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 passion guide you No matter how big your loss is or how many hurdles you face, keep going because at the end of the day, it is all about to where that experience propels and compels you. Through your loss, you learn some good stuff, and you learn some bad stuff too. Don’t walk away feeling cynical or scornful because that prevents you from really living.   Andrew’s takeaways Always hold something back Never bring your full force to bear. Always hold something back so that when you start to make some progress, you’ve got more ammo to penetrate and get through. Drip out a few goodies along the way so that you people don’t get the core idea right off the bat and to also keep them excited and interested in you.   Actionable advice Whenever you’re making a proposal, always make sure you go into a pitch meeting with a lawyer and have them guide you on how much info to reveal. When you’re doing pitches in the creative arts, and you’re writing proposals or screenplays, you have to have a really good agent and manager. Victoria’s advice to people in the creative arts is also to consider using Alexa Skills and do their business independently. You can do interactive content or a web series. Produce something small scale and get a bunch of publicity around it using Alexa Skills, and then the big wigs will come to you.   No. 1 goal for the next 12 months Victoria’s number one goal is to create more interactive Alexa Skills. She’s already working on something unique and different. Something that tests your intuition and clairvoyance, psychic abilities, and inner cards. She’s creating this for Amazon Echo Dot. Her goal is to win an award for her creation.   Parting words “Always go for the passion and trust your intuition.” Victoria lynn Weston     What are Alexa skills? How can you benefit from them? Alexa is the voice technology for Alexa Echo dot and other Amazon Echo devices. It’s much like Siri for iPad. You can ask the Amazon Echo Dot simple things like what’s the weather; you can play games and so on. You can also enable third-party Alexa Skills on your device. And third-party means independent producers and developers like Victoria, who has her own Alexa Skills – America’s Victoria. As a creative, you can create your own Alexa Skill and use it to promote your work and build an audience. So for instance, if you have a podcast, your audience can get your tips or listen to your podcast while sitting in the car via an Alexa Echo device. Then you can send them a text message with a weblink. That weblink could be a summary of your show or any other content that you want to share via a custom landing page.     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 You can also check out 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 Victoria Lynn Weston LinkedIn Twitter Website Facebook Pinterest Email: victoria@victorialynnweston.com Connect with Andrew Stotz Astotz.com LinkedIn Facebook  Instagram Twitter YouTube My Worst Investment Ever Podcast    

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) and investing in industries in which you have extensive knowledge.   Andrew’s takeaways The risks that really matter are the ones we can’t see The more dangerous risks are those that are not visible at first glance. Corporate governance is a great example. In such instances, the scorecard may shift on how good or bad a company is, but not everyone can notice it. Financial analysts don’t reveal everything at events or company visits, which makes it hard to predict the true situation of a company.   Actionable advice Take a look at the contrarian view Kirk does not deny the fact that we are not 100% right all the time. He admits that even the smartest people make mistakes; but the best ones look at how they’re wrong and how to improve on it always make a difference. Assess, assess and reassess Kirk emphasizes the critical need for constant reassessment, no matter where you are in the investment process. Logical decisions should be based on facts and not on emotions. Furthermore, once a deal becomes potentially damaging, one has to look for closure and not to be emotionally tied into it.   No. 1 goal for the next 12 months To become a better leader, mentor and coach to his followers. He is very passionate about imparting his own lessons to others.   Parting words Kirk says there is no growth without struggle. He believes that people learn not only from their wins, but more from their losses, or the losers that they meet along the way. He added that Andrew’s podcast is something that is in line his passion because provides options for listeners to gain knowledge from real-life situations. Also, as a parting gift, he offers here a free report about his top-75 alternative investments. “There is no growth without struggle.” Kirk Chisholm     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 You can also check out 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 Kirk Chisholm LinkedIn Twitter Website Blog Connect with Andrew Stotz Astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Peter Lynch (1996) - Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business  

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 thinking, “No, I’m right, I can override this”, even when his framework was telling him that the odds were against him. Yep. This time luck wasn’t on his side.   Andrew’s takeaways Confidence can lead to overconfidence Confidence is something that builds over time as we invest or as we do anything. And unfortunately, confidence sometimes leads to overconfidence. This is one of the most classic behavioral biases that you always have to be careful about. If you’re overconfident, the market will teach you a lesson. Frameworks don’t always work Frameworks work during certain times, and sometimes they don’t. You don’t have to abandon your framework but always question it. Don’t let emotions get in the way It is so easy to get caught up in the emotion of success, the emotion of failure, and the emotion of trying as an investor to take a bet. It’s your job to find something that the rest of the market doesn’t see and take a strong view on it. But sometimes we let our emotions get in the way and we forget to look at things objectively.   Actionable advice Have a framework and use it. Different people have different frameworks that work for them. Stick to your framework, do test it, have faith in it, and understand how it’s going to work.   No. 1 goal for next the 12 months Raoul’s life is currently tied up in Real Vision, and this incredible journey of creating the Netflix of finance. His main goal is to create the world’s best financial video content that’s all about storytelling and engagement. He wants to make finance interesting and unique.   Parting words “You only learn from making mistakes, you can hear me make mistakes, but you’ll only really understand it when you make your own mistakes. So you can make mistakes as long as the size of the trade is right.” Raoul Pal Raoul is encouraging hedge fund investors to take calculated risks and not to be afraid to make mistakes. You’re going to lose money, but you’re going to learn from it.   You can check out Andrew’s books here 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 You can also check out 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 Raoul Pal LinkedIn Twitter Website Facebook Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Raoul Pal (2014) The End Game     Upcoming on Real Vision is a two-week series of Gold vs Bullion, from 14 October Raoul will be interviewing: Jim Grant Dan Morehead John Hathaway Tom Kaplan Rick Rule During the two weeks Real Vision will be exploring the role of bitcoin and gold as alternative asset classes in a world of ailing monetary regimes and a seemingly unstoppable push toward negative interest rates. In this new world, how can investors preserve their wealth? Does gold remain on top as the ultimate safe haven asset or is bitcoin the new “digital gold”? Raoul will be covering these and plenty of other questions that investors tell us they want the answers to... Special offer For Worst Investment Ever followers, Raoul is also offering a three-month Real Vision subscription for only $1 (limited time only). Here is a link to the landing page  

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 something (your investment or deal) … even if it’s a guarantee from some person or entity or other business that you think would eventually have the ability to pay.” David Barnett   Some lessons Plan A: Make the most attractive thing possible, which is the repayment of your money If it doesn’t work for whatever reason (and because we’re dealing with humans, anything can happen, illness, marriage breakdowns, all those kinds of things)… have a Plan B. Plan B: Some other way to be made whole if something goes wrong with Plan A And follow your own counsel. In one of David’s books he tells how people can do local investing deals by learning how banks do them, which is, banks have a Plan B, they get collateral, they get security, they ensure that if something doesn’t work out, there’s a Plan B to follow. And that was one of the key critical things that David admits failing to have set up. Avoid hubris (excessive pride or self-confidence) and arrogance     Andrew’s takeaways Be very careful doing any business related to cash flows linked to government Government has extreme power and can literally do whatever it wants. It can cancel a deal, it can refuse to pay, it can demand more payments or fees. Dealing with anything linked to governments is messy, both in the West and in Asia. Make sure that you actually have rights to the value you are trying to claim or receive If you don’t have rights over the benefit you’re seeking, then you know, it’s very hard to win.     Actionable advice There always has to be a clear path to a Plan B That can be some kind of security or collateral against the deal you are doing, even if it’s a guarantee from some person or entity or other business that you think would eventually have the ability to pay.   No. 1 goal for next the 12 months David is focusing most on his everyday work with people who want to buy and sell small businesses. He has an online group-coaching program where there are people from all around the world (Asia, Australia, New Zealand, Canada and in the US). He works with them to help them prospect, find, locate, make offers, make deals, do the due diligence, on buying small- and medium-sized businesses. The group’s been going for about a year and a half and it continues to grow. It’s very exciting for David because you can spend a lot of time looking online for information about buying a business but every one of the deals is privately, so it’s very rare that you’re ever going to get somebody to tell you the exact details of what happened when they bought or sold a business because it’s all confidential.   “If you want to avoid all risks … you know, just stay home and don’t do anything and don’t go anywhere.” David Barnett   Parting words David says, If you want to avoid all risks just stay home and don’t do anything and don’t go anywhere. But he doesn’t think that’s what life is all about. He admits losing money in the deal, but he now sees it as a piece of the $25,000 that’s going to help save him from losing the piece of the $100,000 because 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.       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 Learn with Andrew Valuation Master Class - Take this course to advance your career and become a better investor Connect with David Barnett LinkedIn Email Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned David Barnett (2016) How to Sell my Own Business: A guide to selling your own business privately and not pay a broker’s commission David Barnett (2014) Invest Local: A Guide to Superior Investment Returns in Your Own Community  

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 finance is very few people actually write out their plan. Just because it’s cheap, you don’t have to buy it. Andrew’s mother used to say that as they passed by a store and he saw something on sale and told his mother about it. The corollary to that is … Nobody went bust by selling too early So the idea behind that is, investors cannot always make the right calls. But it’s better to sell too early than to sell too late. Don’t buy high and sell low So many bad investment decisions are rooted in the fact that people have bought high and sold low. In Chance’s case, he actually sold high, perhaps he sold a little too early, but at least he sold high compared to his initial investment and didn’t make that common mistake.     Actionable advice Apply mathematics Chance says if he could have developed some analysis and modelling to look at the curve of Bitcoin to see whether it was going up or down, he should have done that instead of just looking at the numbers from minute to minute. Don’t be a prisoner of the moment Be someone who looks at the bigger picture, because the ups and downs of the moment can cause you to make the wrong decision. If you look at things with a broader perspective, have a plan and are willing and courageous enough to stick to it, you will do a lot better.     No. 1 goal for next the 12 months To launch the Electronic Alchemy eForge. To see what’s happening there, visit Electronicalchemy.com and sign in for news about our progress and how you might be involved. He calls on everyone to imagine having a device that can even 3D print a phone that works. He’s talking about being able to print the different layers of the phone from the bottom up, and the cool thing is, it doesn’t of course have to look like a phone. So that is he says where designers can create something special. Chance says his company at its core is about fostering and enabling such creativity through a community of people sharing ideas and printing them into realities.     Parting words Be courageous and be creative.     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 Learn with Andrew Valuation Master Class - Take this course to advance your career and become a better investor Connect with Chance Glenn LinkedIn Twitter Website Electronic Alchemy Email Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Chance Glenn (2006) Jesus is Faithful MP3 album and CD  

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 when you can give it as a secured loan backed by property. The only market timing that is proven to work is time in the market No one – no matter how smart they are or how much they think they can predict the future – can predict the market. So it is better just to be in the market.       Andrew’s takeaways On peer-to-peer lending Get collateral Make sure you are collateralizing anyone you lend to. Time in the market Allowing money to compound is critical People love to show the chart of the exponential rise in money in later years that comes after allowing your money to enjoy the fruits of compound interest. The sad news about such charts is that the compounding effect doesn’t really happen until 30 years later. Most people never start early enough to get to the 30 mark or stay in long enough to get the real impact of the compounding. Red light/green light Andrew has created an investment thinking tool thing called Red Light Green Light, which is just a very simple method based on the tools he has learned of how to look at a stock – his FVMR approach (fundamentals, valuation, momentum, risk) He says: Let’s take these four items, mix them together, and see what they can tell us. The only think he really wants to know is if the market is crazy high, he calls this Red Light, which means the market is too hot. And if it is flashing green, it is crazy low. It’s not a trading rule, it’s just an indication. If you’re someone who really gets stressed out about it, if you see it flash red, take the $800 (say you invest $1,000 a month) that you would normally put into equity and put it all into bonds. When you see it flash crazy green, maybe take the 200 that you would put in to bonds that particular month and put it into equity. This is a kind of a rules-based system that allows someone to control their emotions. And the fact of the matter is, it will only flash red or green, 10% of the time.   “Regardless, don’t worry about where the stock market is, as long as you’re contributing over the long term.” Andrew Stotz   Actionable advice “My only shopping is buying assets and no longer liabilities.”   No. 1 goal for next the 12 months His goal now is to stay on track – to keep doing what he’s doing – with everything. He says everybody should strive to work out in the beginning what their game plan is, then educate themselves to figure out what makes us happy, not just investing goals. He includes fitness and health, regularly growing income and keeping expenses low.   Parting words Learn from mistakes, don’t make your own and kick some butt.     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 Learn with Andrew Valuation Master Class - Take this course to advance your career and become a better investor Connect with Johnny FD Website 1 Website 2 Invest Like a Boss summit 2019 The Nomad Summit 2019 The Nomad Summit 2020 Email Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Johnny FD (2013) 12 Weeks in Thailand: The Good Life on the Cheap Johnny FD (2014) Life Changes Quick: Replace your 9-5 income, travel the world, get in shape, and even fall in love