Hey friends! Last week we had a huge gain in subscribers, so on behalf of everyone here, welcome!

Hope you enjoy, comment, share ideas, but most importantly, thank you for putting your time and trust in me.

It’s all the shared learnings and interactions that inspire these weekly Journals (I respond to every comment) all with the goal of simplifying personal finance, investing, and building our mindset to be not afraid, but excited about money, and creating seriously large portfolios for future benefit.

We are a group of 18 to 75 year old’s, the average being in the 25-45 year old range, interestingly slightly more women than men, ranging from novice investors to experienced investment bankers and capital market enthusiasts.

Given the broad swath of readers, it’s hard to thread the needle week-in-and-week-out to everyone’s enjoyment, but hopefully, something in here inspires you personally to take action, or maybe you read something that is worthwhile sharing with someone else you know.

Let’s get into it.

Personal Finance

Speaking of trust, a friend and fellow squash player, posted an article on LinkedIn that clearly struck a nerve.

The post absolutely flew, and is still pumping, with over 500 likes, 200 comments, and 50 reposts. These are huge numbers, especially when you consider the fact LinkedIn (and other social channels) will typically suppress any content that has a link to an external article (they prefer eyeballs stay on their platform).

The topic? A New York Times article discussing the rise—and risks—of financial advice from social media fin-fluencers:

This is an interesting topic, because you could say I am “one of them”.

Although Jason, who is a very high quality Portfolio Manager and one of a small handful of stock pickers that I trust is adding value, listed my name in his remarks as one of the ‘few’ providing sane financial advice and to beware of anyone espousing get-rich-quick schemes.

My response:

Thanks JDV. I see it every day - get rich quick mining pumps - crypto - day trading - options trading - forex schemes - all of these prey on the need to be rich yesterday, which is impossible - unless you’re born rich - so they slew unsuspecting people along and take their money. It’s not exactly their fault either - they just simply don’t know better and are taking a risk to explore a new way to make money. The problem starts earlier in life, schools, parenting, teaching the value of a buck spent vs a buck invested, common sense stuff that unfortunately gets passed by as we are brought up. School of Hard Knox Life sorts it out in the end, but many get hurt along the way.

Two things I would like to say about this.

First, please be careful who you trust with your time and the advice you heed. There are plenty of good humans out there but equally so many that whish to take your money and run. Anything that seems too good to be true, clearly is. Get rich quick doesn’t exist. Even the tech entrepreneurs that made it huge, took them years if not decades of 24 hour work days to build, we just see the end result and think we deserve it now. We don’t.

No, it’s about the little things we do today to make our money work for us. The usual suspects:

• pay yourself first

• get financially literate

• cut down any high interest debt ie credit cards

• skim your paycheck and automatically deposit to brokerage account - if you don’t see it - you won’t notice not spending it

• set up automatic purchases

• set up automatic dividend reinvestments

• avoid picking individual stocks, it’s really, really hard

• instead use broad based, low cost index funds—they allow ordinary people to be extraordinary investors.

• put the whole money making system on autopilot, so you can go have fun doing something else

• And as usual, earn more, spend less, invest the diff, be a lion, don’t be a gazelle, and get that sweet chedda.

Second, so you can understand my bias and perhaps get comfort as to why you are putting your faith in this weekly mailout:

Readers of this Journal know it is 100% free, except for your time, which I hold dear. I make a small income from course sales, but it certainly doesn’t pay the bills - maybe one day it will turn into a formidable side income. I am not holding my breath.

At my core, I enjoy typing and it helps me synthesize thoughts. Interacting with you, learning from you, and sharing knowledge is extremely valuable.

When you network and communicate, you never know what doors might open. As my Uncle always tells me “Eddie, good things happen when you just show up” - ain’t that the truth.

Most of all, I LOVE seeing people level up their money game. That’s the goal here, and it keeps me motivated.

Hope some element of this short story motivates you, too.

Stock Markets

To be clear, none of the financial or money concepts explored in this Journal are new. The only thing different is the delivery man.

And so while it is my honour to have you here reading on a weekly basis, in case you're tired of yours truly, today I'm sharing the top 5 investing/money books that have greatly influenced my career and life.

For both stock market and personal finance enthusiasts, these are guaranteed to impact your vision of the world of money, so you can make more of it. 

1. The Intelligent Investor, Ben Graham

This is the bible for value investing according to Warren Buffet, who studied under Ben Graham at Columbia. For the serious stock pickers out there. 

Buy it on Amazon

2.  The Psychology of Money, Morgan Housel

Money is a bad word and often misunderstood. This book takes it past the spreadsheet and shows you how to develop a better understanding and relationship with money. I just finished re-reading this book. Highly recommend.

Buy it on Amazon

3. The Little Book of Common Sense Investing, John C Bogle

Jack Bogle invented the index fund and completely leveled the financial playing field for everyday folks. He shows you how to easily guarantee your fair share of stock market returns.

Buy it on Amazon

4. Rich Dad Poor Dad, Robert Kiyosaki

My Dad bought me this around the age of 16. He cut a $50 bill in half and said, Eddie, when you're finished reading it, you get the other half. I got that chedda, and a lot of wisdom, too. Young or old, this book will teach you critical investing lessons and how to approach money.

Buy it on Amazon

5. The Bitcoin Standard, Saifedean Ammous

Essentially the Bible for anyone that wants to learn about Bitcoin. Not an endorsement to buy Bitcoin. Just putting it here because I think it is important to learn about, regardless of your personal views of the asset. 

Buy it on Amazon

Disclosure: if anyone decides to buy a book through these links, I will make $1,000,000. NOT. I may earn a tiny, microscopic sized revenue share. The potential commission will not change my financial life, but the books may change yours.

Real Estate

Not sure if anyone else is noticing but the 5 year GOC Bond yield has declined drastically, about 0.50%, in just a two week period.

As a reminder, much of the traditional commercial mortgage market is based of this bond yield. This should support more activity in the Real Estate Capital Markets and also bolster valuations, in theory at least.

Someone asked me last week my views on where interest rates will be one year from now. I said, cheekily, if in knew, I’d be rich and wouldn’t be here talking to you!

I did follow up and say: this is a guess, but I think they’ll be lower.

Technically speaking, the 5 year bond yield has failed to eclipse the highs seen pre-Great Financial Crisis of 2008, even in the face of the worst inflation seen in 30 years.

So my guess is we trend lower on rates for the near term, until other forces occur that change this recent trendline into another direction.

We shall see.

In other news, at Narland, we took the opportunity to lock in our 5 year financing this week on the back of this sharp decline. At this point, we are under our proforma mortgage interest rate - which is good for investor returns. One could argue, but if you think rates are coming down more, why don’t you wait?

Well, when you are raising outside capital, in other words, using other peoples money—best to reduce uncertainty, lock in a very solid rate on which the proforma already sings, rather than wait and hope for a further drop in rates. Imagine if the bond yield shot up 50 bps in two weeks, just like it’s done multiple times in recent years?

That would be a seriously dumb risk to take.

1 Quote

A Question

Is this Journal getting too long? One reader suggested issuing 1x month instead of weekly. Not sure. I like the weekly format myself. What do you all think?

_____________

If you enjoyed this issue, please forward this email to your friends to subscribe.

Thank you

Eddie Gudewill, CFA

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