GM! The bull run is officially here.
Today is Wednesday, March 6, 2024
Bitcoin has crossed its ATH of $69K, and Nvidia is more valuable than Aramco, the biggest oil company in the world.
Warren Buffett is 93 years old, he is worth $134 Billion, and he has run Berkshire Hathaway since 1970.
A few facts:
- He bought his first stock at 11
- He became a millionaire at 30
- He became a billionaire at 56
In essence, $133.7 billion of his wealth was accumulated after his 50th birthday, despite becoming a millionaire in 1962. Morgan Housel puts it this way: “If Warren Buffett stopped investing at the age of 60, his net worth today would be $12million” and that is the power of compounding, consistency, and time.
I am sharing this because Morgan Housel talks about “incentives in finance” all the time, and how they affect what we invest in, spend money on, and even save.
I started my career selling structured financial services products (loans, investments, financial instruments, etc.) to big companies and HNI’s. In theory, that meant studying market trends, and offering customers the BEST possible option to build, secure and maximise their wealth. In reality, what we were doing was bundling a mix of these products, on a case by case basis, to ensure the best possible mix of fees are earned and our Assets Under Management keeps growing. That was the incentive on which my financial advice was dependent on.
The best possible financial and investment advice most people are ever going to receive in their lives is literally two words: “Do Nothing.” If you’re feeling generous, it can be expanded to “Do what you’ve always been doing”. But that sounds boring. Aphorisms like “spend less than you earn”, “save frequently and habitually”, “avoid debt where necessary”, are not the kind of advice you expect from your highly paid financial advisor, and if they repeatedly said this to you, they’d be out of a job.
So we spend our time searching for shiny financial advice, elevating semi intelligent hacks on TV and the internet who spend their time trying to shill the next asset to buy or sell.
These people are entertainers paid to promote assets for the sole purpose of getting you to execute on their calls. Chances are their personal portfolios are inverse of what they promote. Heck the inverse Cramer fund and inverse Galloway index are some examples of when being opposite of what is promoted in financial media, can earn you outsized success.
A few years ago, I was privileged to make the acquaintance of a group of folks who had gotten significant windfalls from their employers, businesses, and Covid-19 stimulus checks, and they were looking for what to do with these seemingly large sums. My advice to them at the time was to simply putting away most of the money in an index fund or high yield savings account, go on holiday, and continue doing whatever it was they were doing that made them receive such a windfall in the first place. At least, until they decided what next they wanted to do with their lives.
Some of them decided to go become angel investors, and today, most of the companies they invested in are underwater.
Full disclosure: I also did not take my advice and joined the herd in angel investing, deviating from my own process. The only parties that seem to have come out of this episode whole are the investment vehicles that charged us fees.
Another bull run is here, and people are curious on how to take advantage of it. I want to use this medium to advise two sets of people, and share a few truths free of any incentives.
If you have not been investing (and possibly losing money) out of habit over the last few years in the crypto and stock markets, please do not start now. Starting now is akin to developing a drug habit during the Nixon administration. I won’t definitively say that it’s too late, but starting now (possibly out of greed and FOMO) is going to most likely get you burned. You are better off consistently investing in an index fund, developing foundational level curiosity in the markets, and going to sleep. Please double down on your day job or the business that pays you.
And for you my comrades, addicted to magic internet monies, consistency is key. Less than 1% of degens have retired, the chances of you finding the single coin/asset that you will bet your entire net worth on and retire like Davinci Jeremie are very slim. You are more likely to go broke and get wiped out changing your strategy and chasing the next big thing. I do not know the next coin that will make us rich, if I did, I would ask you to help pump my bags.
Be careful, the rug pulls and scams are at the gate, please stay safe, and maybe, just maybe, WAGMI🚀🚀🚀
Nnanna's Blog 
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