Latest / Money Grows on Trees / #269 - Financial Expert Reacts to Shocking Wealth Strategies

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#269 - Financial Expert Reacts to Shocking Wealth Strategies · Money Grows on Trees

• 0:04
  JL, I don't, I mean, I love you, man, but you're gonna get lit up on the internet. You
• 0:17
  Oh, God, spammy! I'm broke, about to
• 0:21
  Bitcoin will not make you rich and Bitcoin will not make you a crypto millionaire. Yes,
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  especially if you don't have any money. You're not going to put money in crypto and then just
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  One of my biggest pet peeves is when men gatekeep financial concepts by
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  I don't gatekeep anything. I'm not gatekeeping. This channel is
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  open. I make complex things simple as well. I'm not gatekeeping anything,
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  lady. I'm Lloyd James Ross, seven-figure investor and entrepreneur, and
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  I've helped thousands of business owners and professionals turn financial stress
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  into success. If you're stuck in old money habits, overwhelmed by
• 0:52
  investing, or unsure where to start, this is for you. I'll
• 0:56
  give you the mindset and strategies to take control, grow
• 0:59
  your wealth, and achieve financial freedom. It's time to make
• 1:02
  your money work for you. All right, here we go. It's time to have
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  some fun. We're going to do reactions. And the best part of reactions is
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  I've not seen these. I don't know what's coming. You're going to get an actual reaction from
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  me of what I think straight away. So let's dive in
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  One of my biggest pet peeves is when men gatekeep financial concepts by
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  overcomplicating them. My dad always told me, if you understood, you had to
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  read five paragraphs to explain it. First is a stock buyback. That's when
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  a company literally buys back its own shares to make them rarer and
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  pricier. It's like a girl who takes down thirst traps on Instagram to make the
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  remaining ones hit harder. So she has less posts on Instagram overall,
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  but the remaining ones seem better and have higher engagement. Next,
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  what's a trade deficit? A trade deficit is when a country buys more
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  That's true. So the stock buyback part that
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  she said first is interesting because if you're going to invest in stocks, individual
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  companies, you have to understand buybacks. Buybacks are
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  a way for companies to give shareholders a return of the money
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  that aren't dividends. And they're very popular in America because American companies
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  that pay dividends in America, you can't get franking credits like you can here
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  in Australia, which means you have to pay the full tax, the income tax on
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  the dividends. So to prevent shareholders having to pay tax, the companies, instead
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  of spending the money on or sending the money out in dividends, they use their free
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  cash flow on buying back their shares and retiring the common shares
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  outstanding, which does increase the value of the shares.
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  And it's called buyback yield instead of dividend yield. And it's one
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  of the most important concepts you have to know because you want to be buying companies that
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  are aggressively buying back their shares when they're very undervalued, and
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  it's one of the biggest principles that Warren Buffett follows in his investing. The
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  second part, the trade deficit, not as important because to follow macro
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  trends and understand macroeconomics is probably not going to make you rich.
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  Next is the foreign exchange reserve, and that's just the cash and currency a
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  You also really don't need to know about foreign exchange reserves because it
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  has no bearing on the microeconomics of your household and your investments. It's
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  nice that she's explaining these concepts with metaphors like this, so
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  you do understand them, but do you really need to understand them? No.
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  And I don't gatekeep anything. I'm not gatekeeping.
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  This channel is open. This is public channel. I make complex
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  things simple as well. You're not the only one. I'm not gatekeeping
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  I'm up $90,000 in just four trades this
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  Oh, God, spare me. I'm up $90,000 in
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  four trades. Congrats, but you're gonna die. You're gonna blow up. Something
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  bad's gonna happen. No one, no trader is
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  at the top of the Forbes 400 list because they never made it.
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  Give you an example. Have you ever seen a fat 95-year-old? No,
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  because they don't exist, because they died. It's lame because
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  when you buy and sell, if you do it consistently, you're bound to make a mistake because
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  you're human. Even if you got stop losses, you're going to make a mistake.
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  It's going to be catastrophic, especially if you get too confident. And then you've got
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  to pay massive capital gains tax on the trades because you're
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  going to hold the asset for less than a year. You get to a point where trading
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  like this also takes a lot of your... So you
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  can't be time rich and you can't have financial freedom
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  because you're actually having to do it. So when you make a trade, you get paid, you go, oh, got
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  the money, got to do it again. Got the money, got to do it again. Every time you make a trade, you
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  got to make another one. And again, you increase the decisions you're going to
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  make as a human, you're going to make a bad one. But I dare say she's probably
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  selling a course on trading, which is probably where she's getting a recurring income from.
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  You've got to understand too with trading is that if she's doing a trade where
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  she made 17,000 or 25,000 or 50, whatever, You
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  have to have the capital to deploy to get that trade. So for example, if
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  you're swing trading, I played a little game the other day
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  with PopMart. It's a Chinese company. My wife
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  and I are in Thailand. We're sitting there. We're in a little bar. And
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  we're hearing about Lebubu's left front and center. My niece is talking about it.
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  We're seeing lines at the shopping centers about it. And
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  I thought, this is interesting. I bet this is a very simple swing to
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  watch. And we just sat at the bar and said, let's put $5,000 and
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  just play around with this. Instead of buying La Boobies, we'll put $5,000 into PopMart.
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  So we did it. And it swung up about 30%. And
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  so you're trading
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  on momentum. You're trading on momentum of the revenue of
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  the company. You're trading on momentum of the people buying the stock as well because of the popularity. And
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  that doesn't last. and you're buying it overpriced, which
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  is why we didn't put in a lot of money, but it was just a fun experience to show what
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  swing trading looks like. So you're trading on momentum, and
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  it's very difficult to make long-term big
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  money with momentum because you have to buy and sell, buy and sell, buy and sell, and you have to time
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  it. Very difficult, but you have to have the money. Right? So
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  like, you gotta have the cash. And for these types of trades, you've probably got at least
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  $100,000 of cash, I would think, to do 17% trades or
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  30% trades. Totally possible, but the long-term
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  advantages do run out, and you'll have to end up becoming an investor, particularly
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  when you wanna deploy two or three million dollars at once. Just quickly, if
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  you're ready to take control of your finances but feel stuck on where to start,
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  I have a solution. My book, Money Bias Happiness, simplifies
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  investing and wealth building with practical steps to help you achieve financial
• 6:10
  peace. Get your copy via the link in the show notes and let's get your
• 6:21
  JL, I don't, I mean, I love you, man, but you're going to get lit up on the internet. You
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  Who cares if you get lit up on the internet? By who? Just
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  because someone likes Bitcoin doesn't mean they're right. Oh my God, people are
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  Well, I'm sorry, but you asked me the question, I can only give
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  you the answer I have. So let me explain to you what I mean, right? So
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  Bitcoin, as I said earlier, If
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  you bought Bitcoin 10-15 years ago,
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  you've done magnificently well. Who wouldn't
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  want that? I wish I'd done that. I didn't and still
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  The reason why it's hard to do that is because people can't see the
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  future. You can't say, I wish I'd have done that
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  and look in the rearview mirror. You can't go back in time. You
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  But that's not the question. The question is, where does it go from here?
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  Right now we're talking about 100,000. And when I was talking to the boys in the
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  It's now at 100,000. But when I was talking to the boys, it was 13,000. So
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  our brain has a psychology bias called recency bias, where we think the
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  recent results will continue to the future. And that's what got people in
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  a lot of trouble in the dot-com bubble. in the South Sea bubble,
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  in the railroad bubbles, in every single bubble in the history of mankind, the
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  Beanie Baby bubble, everything. It's at maximum bubble, so they think
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  it's gonna repeat. And that's what he's saying. He doesn't know he's probably suffering from the
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  Where does it go from here? Well, now I'm getting in front of jail, and that's what you're not understanding. And
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  You dumbass. You're out here podcasting and doing ad
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  Yeah, I think you've confused me with your psychiatrist. I
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  All I can tell you is that when you look at Bitcoin... The other thing to consider is
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  the reason why people end up in these types of speculations like Bitcoin
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  is because they feel like if they're not part of it that they're
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  an outcast in their peer group or they might be made fun of. That's
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  why caring about what people think and leaving your principles to
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  chase something you don't understand is a really Amateur way
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  to manage money and so people who are great with wealth don't give a
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  crap About what someone says about them about their investing job. I
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  don't care. You've seen my youtube channel I don't care because I
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  know what works for me and I know what I'm sticking to right but But
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  don't get seduced by novel ideas like speculating
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  in crypto or anything else you don't understand because of what people say about you.
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  Yes, especially if you don't have any money. You're not going to put money in crypto and then just moon
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  You know how hard it is to win at trading? It's a very tough game
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  Bitcoin is great for people who already have money who want more of
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  a risk on asset to hold. that think, hey, I'm
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  bullish on crypto, but I don't want to completely over
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  leverage myself into altcoins that have a much higher potential going
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  I really don't think Bitcoin will go to zero. I
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  probably don't think it'll go to zero either, because there's always going to be someone who
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  wants to own it for speculative reasons. But I can't see
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  it. It's certainly not going to produce the same
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  results as it did. It's just like all the capital in the world will need
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  to flow to it. And I know that's the Bitcoin standard. game
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  plan, but it's not going to happen. Problem with
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  it though, like even if you did have it, it doesn't produce cash flow. And people will talk
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  to me about, you can stake it and dah, dah, dah, dah, dah, but it's
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  really not going to be paying for your groceries or your rent or anything like that. It's just
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  not. And if it does become the reserve currency, it definitely won't then because
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  it's what we measure the value of things in. So I think it's going to
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  limp along from here and I can't see it I
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  can't sit having the same growth as before, so I don't think it'll make
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  I agree with that. You really believe you're telling everybody on the
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  Yes. And that's what I tell my daughter and that's what she's doing. She's in
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  her early 30s. She just quit her corporate job last
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  fall. I don't know if that's permanent or if
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  it's just a temporary hiatus, but she at least has fuck you
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  money, the way we defined it earlier, that she can make that kind of bold decision
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  because she didn't make any silly decisions like buying a
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  house and becoming house poor and being dependent on it.
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  Yes, yes, this is my man. He's
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  saying what I'm saying. So his daughter didn't buy a house,
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  she rents, she put her money into some sort of index fund, and she's got FU
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  money. And she didn't fall in the trap of becoming house poor.
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  When you buy a house, you can't afford to live in it, and all of a
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  sudden you're addicted to the paycheck, you can't become entrepreneurial, you're stuck, you're
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  golden handcuffed, you're done. And I believe in this, this is
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  So yeah, building wealth is your key goal, then
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  no, owning a house is not gonna contribute to
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  Yes. What's interesting is right now,
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  anytime I wanted to, I can buy a house for cash and a good one. But
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  why don't I? Because my capital and my time
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  and bandwidth and skill set and mind is better spent on building wealth
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  way better in other areas than simply buying a box of
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  bricks and mortar. So you got to be careful where you put your capital and
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  your time and your energy and what price you pay to
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  call a house a home. Most people traveling up the
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  M1 every day today, this morning, in traffic, all day, every day, to
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  a job they hate, that's a very big price to pay to say, I own
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  Don't buy this. Instead, buy this. Because
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  in five years time, the value of this will be this. And the value of
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  Although, if you did buy a Ferrari, and then you went and sold some sort of coaching
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  and consulting like people do, or you do a podcast on it
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  in the Ferrari, and you have a detention and attract an audience, and
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  then you can buy lots of houses too. So he's saying don't
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  buy the car because it depreciates, buy the house set because it appreciates. And
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  that's a fair comment to say because by and large, generally over
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  time, housing does improve in value, it's a good hedging against inflation, particularly
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  if it's a property investment. There's tax advantages to it, it does grow, you
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  get cash flow yield. So it's a far better idea to buy a property for
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  an investment than it is to buy a car that depreciates, unless
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  Do you know $100 a month invested from age 25 to
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  age 65 at prevailing market rates? You'd
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  have $1,176,000. Yes, I did know that, Dave.
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  $100 a month. So if you're 25 years old and you're watching this and you
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  I agree with this. If you decide to do that with your children, in fact, if
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  you invested $1,000 today when they're born and you put $100 away
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  a month, certainly as they get to age 40, they're
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  going to have some substantial amount of money there that
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  they can use. It's little bits of money compounded over time that turn
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  into great money. You don't wait till you're rich to invest. You
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  invest to get rich starting from today. Go Dave. All
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  right, there are the reactions. Good, bad or indifferent. You agree
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  with me or not, I'd love to know in the comments. What do you like about those
• 13:37
  reactions? Would you react the same way? Leave us a comment, I'll
• 13:40
  come back and I'll chat with you then. And I'll see you in the next episode. Thanks for listening
• 13:44
  to Money Grows on Trees. If you enjoyed the episode, leave a five-star review
• 13:47
  on Apple Podcasts and Spotify and subscribe to
• 13:50
  us on YouTube so you never miss an episode. And if you're serious about
• 13:54
  building wealth, make sure to check out the links in the show notes and follow me
• 13:57
  on all social media platforms, at LloydJamesRoss for