Biggest financial mistakes of our lives

Welcome to Wabi Sabi, the arts of imperfection. And as we talk about imperfection coming up, this podcast is gonna be a pure alley because we decided to talk about topics that, you what were some of the imperfections when it comes to making money? Biggest financial mistakes we've ever had in our journey and we thought we'd discuss them because I haven't really think about, I don't really think about them too, too often, but. You know, when you do, you start to realize, I'm like, yeah, that's been a lot of pain throughout the years as you go through your journey. And I think it's important to talk about it because Jim, like you and I both know is that life is never a smooth curve going upwards. It's always been like this more, it's more like the stock market. It's always like this up and down kind of thing. And there's always like highlights and lowlights. And I think it's important that we learn and talk about the things that were some of the biggest financial mistakes. not because of the mistakes and stories around it, but more like what led to those mistakes? What were some of the things that you did or I did that kind of led to that point? And hopefully those lessons can be learned by the listeners here to be able to go, oh, maybe I should not make the same mistakes. Not that you're going to escape all your mistakes, but you'll be hopefully minimize the impact that can have on

Yeah, great, great topic, Lawrence. And I do, I do think you're right. It's, very important that people understand the process of what gets you to where you are. Like, you know, in the, in the traditional journey of entrepreneurship, it's not necessarily someone who's gotten the formula right straight away. Who, who, who gets to the end and says, yes, I've worked it out. They've usually had. tribulations and failures and learnings and hard learnings and exceptionally hard learnings. Sometimes they've gone bankrupt two or three times before they found the way to go through. And I think that revealing to people the journey normalizes it for everybody, but then also gives them a pathway of what led to that problem in the first place. So yeah, I think it's a great topic to discuss.

I know, I want to talk about this first and then we can kind of dive into our personal stuff. But you know, I'm always fascinated by people, know, listening to people or learning from people or, you know, that we know that have gone through bankrupt, bankruptcies, for example, or like just really big financial disasters. And somehow, some way they find a way to kind of get it all back and then lose it again. And then somehow figure another way to get it all back. And it's almost like you, you, you almost start to think that it's always in them, like, you know, for it, for them to kind of be able to make money. But there is something natural about, not natural, but maybe something that they are doing that's different, whereas most of us, I find, we play more defensive. We don't actually even want to lose anything at the beginning. So therefore, we never really get the big swings or we never take those chances and big risk. And maybe that's what it takes for them to kind of go to lose it because they actually are having the risk tolerance that are maybe slightly higher than most. I don't know, what do you think?

Yeah, that's a good point. It comes down to a lot of the times. I did a lot of work in this area previously and it comes across fundamentally, it's your paradigm perspective on what wealth looks like. So some people see wealth as a dance or a game. Some people look at it as a battle. Some people look at it as a fist fight or arm wrestle. And so consequently they'll draw situations and circumstances that perpetuates that belief. So it's really, really important if you look at that. And when I've spoken to people, the ones who it comes and goes, they get money, easy come, easy go. And it's amazing how that plays out for other people. Whereas other people go, it's not easy to come by. So consequently, they're the ones who are very linearly going to work hard and whatever. And there's a double-edged coin to that because what happens is

Hmm.

If that becomes your base belief about how the game of money plays out, that's generally how it will play out. And so you will attract situations that will perpetuate that. So I think it's really important. I love what you just said because there's a cause and there's an effect. There's a cause and a symptom. And sometimes we look at the symptoms, not really sure of where the cause started from. And sometimes it comes from our base beliefs.

No. Yeah, it's interesting about the base belief because it really kind of sets up the base belief sets up the identity that we actually have, right? So the, the identity that, you know, that you have may be different than what I have or what the listeners have and versus a billionaire has. And that definitely comes true as I kind of dive into the landscape of wealth in terms of meeting different people from different people from various backgrounds and various, um, wealth profiles really do start to see there's a common theme. in their identity. If you look at entrepreneurs, there's definitely a series of, sorry, a group of entrepreneurs that are driven by money and money alone. But there's also, more often than not, entrepreneurs that are driven not by money at all, but they actually have a ton of money. They actually are driven more by the game of entrepreneurship, and they actually are driven by the game of success, and the little game. that they actually created for themselves, which I find very fascinating, you know, and then you have our entrepreneurs who are really like to kind of play it safe and they don't want to risk most things and they kind of can't get past a certain level. And there's no what I found is that there's no right or wrong way. But the key element is that the identity that you see yourself in does dictate a lot of who you attract, but also how what kind of wealth you actually end up being.

Yep. Yep.

And that's really tough because that means that you have to kind of switch that, you have to first be aware of the identity that you actually hold for yourself, which is usually taught or I guess instilled to you mostly by your parents or the friends you've hung out with or maybe your parents' friends or who you've been able to surround yourself up to this point in your life. And in order to kind of shift, you do have to put yourself in a totally different realm. And I'll give you an example. A lot of software or tech entrepreneurs, 10, the most successful one tend to come from San Francisco or have lived in San Francisco at one point or another. And I find it fascinating because the way they think around tech and how they build businesses and startup is such a different world than how I kind of grew up in, you know, in the chiropractic and health world. We're talking about building businesses, like we know one step, it's a brick and mortar store and you got to build on your skills. And these guys are like, let's build something we don't know if it's successful, we'll just give it a go and we'll raise a bunch of millions of dollars and then let's take it away and then we will change course along the way. But that's because everybody else in the Silicon Valley thinks that way and they just have a different viewpoint, which I never grew up with. And now that I know a lot of them, now I just start to realize I'm like, wow, we just totally, we would just have different channels and different upbringings, which led to different belief systems.

Yeah. And, expectations as a result. you expect that that's just how you do it. You know, like if your model of life and work has been a particular pathway, if you're acting congruently with that, that's it'll play out. But it's, it is hard. I've had to change the story and narrative around wealth along the way. And it's a very difficult one because it's, you know, sometimes they say, you know, sometimes you carry the sins of the father show up through the kids. And I know my whole work. until I get into, know, drive myself into the ground is a product of the conditioning that I had in there. So interestingly, what it does, and I'm definitely sure that this will come up as we talk about it, is what happens when things happen outside of your expectations? So if you expect that, and I'll definitely share that as we go along, where you exceed what you thought was possible, what happens to you then? That totally messes with your mind. and then consequently, then you either have to upgrade or you'll sell sabotage. And that's a lot of times what happens for people. So I think that's really important. And to your point about the locality and the group, you're right, in San Francisco, the hub, the entrepreneurial, but more the IT space is there. The startup phase is there. And around there, they've just got groups. And the way of life is such that they're the expectations. The whole reason why, my eldest son,

Yeah. No.

always wanted to live in New York anyway. But part of the reason why, and I'll share how that influences with him very, very quickly as well, because he wanted to start up a hedge fund and he realized that for me to set up a world-class hedge fund, I have to be in New York. And his office is literally a stone's throw away from the biggest hedge funds in the world. And he's deliberately put himself in that environment to normalise that and that was his, he realised the importance of that, you know, in keeping what you said about San Francisco.

Yeah, and think that's a, I remember when I was younger, and I probably should do this more often now, but when I was younger, I remember I used to, I was in Perth in Australia, and I lived in this, you know, like pretty decent apartment, like nothing amazing, but it was just like a beautiful apartment that was looking over the South Perth foreshore. But right across from my balcony was this brand new townhouse that was like three stories high. and you can just tell it was brand new and each floor was like their own apartment, you know? And I looked at that and go, one of these days. And I remember staring at that. This is my first, like, that was 27 years old when I just graduated, just moved to Australia. And I just remember looking at that, reminding myself one of these days, that's going to be me. And like, not dreaming about just foreseeing myself, like putting myself in that situation. And I remember going to Bali, you know, I remember thinking like, oh, staying at the St. Regis, like five stars. luxury, old luxury hotel will be amazing. I Karen and I like rode our bikes from our hotel like a bike, right? Brought our bikes. And they greeted the people at St. Regis in the beginning. It's like, how can we help you? Is it all I just want to look at one of your rooms? You know, we wrote up in our bikes. And not even in a taxi or anything in the car. It's like, rather than a bike. So sure. they showed us like these beautiful like penthouse apartments, you know, that has his own pool and own access to the to the water and, and I was like, okay, like, and I I remember doing that because that cost nothing, right? Just cost a bit of courage to be able to ask for, I wanna see one of your rooms, thinking that I can afford it. They can tell, maybe they couldn't, they couldn't tell, who knows? But the whole point was I felt that I was trying to like, I can afford this, let me see it. Almost like going to a Ferrari dealership to go like, let me, let me just take a test drive on this car. Whether I can afford it not is not the point. It's like, I wanna put myself in this situation to see how this would feel. And I remember doing that a lot, you know, to put myself to like really just get used to. the habits of this is the norm, not the other norm. I remember, and then one last trick, which is like one thing was like I used to have someone mentioned like put a hundred dollar US dollar bill into your wallet. Don't spend it, but just have it there. Just to always know you always have rich, you're always money, you always have this. And it was just something like I thought was like, don't use, I mean obviously I don't use cash much anymore, but like just having that cash though, just having that instill in me to like knowing that I have money always. was like building the habits of just recognizing of wealth and just because there's a lot of like written stories that you created within yourself or what you're not worth it or millionaires are terrible or whatever, like whatever stories that you kind of came up with when you're younger can kind of perpetuate and you're going to have to find ways to scratch that if you're trying to achieve something that you actually almost have like a hatred for. Now that's never usually a good alignment.

Yeah. And you know, just when you were saying that I thought so many times I've heard, you know, that the, don't, you have to do the personal growth work that comes with that because a lot of the times it's not about the number, it's about how you see yourself in there because there's plenty of people who are, who've, who've basically hit a home run in the wealth category who still walk around with a, with a mindset of only the paranoid survive or this could go any second now. And So they're not necessarily feeling the feeling of freedom or abundance. They just have a group of numbers and they're almost in prison just being a bigger castle. Right. And so I think that this that's really important because it's not only just the number, it's your relationship to the number. And, you know, when we will, you know, both done a lot of travel, just travel to third world countries. And you see sometimes people's perspective of

Yeah. Yeah.

of abundance and what that looks like. It's not always linked up to how much money you have. Some people can live abundantly and have an abundant perspective on life, which is totally dissociated from the reality of their financial realm as well. So there's two parts to that. There's how you see it and the reality of the situation.

True, and I think working with a lot of people, like a lot of members, and from the things that I do with Tiger and stuff, and just being around with people with massive amounts of wealth, in the 100 million, the nine figures, they still have the same hesitations and fear and frustrations that all of us have, but the only, I found the big difference between that is that they also know that they're okay, right? So they still have the fear, the emotional fears that comes with it.

Yep.

but they also have the realities that they know they're okay. So what I'm saying is that just because you have all this wealth and most of us thinking like if we have X, then we will be fine, it's not really the case. I think that the reality is always still there. And what actually challenges for them is that they have to still fight those demons inside of them, but the thing is that they actually can do something about it a lot easier. And this is what wealth does. Wealth allows you the freedom to be able to be to be able to have the freedom to be comfortable with it. And you can do a lot more with the wealth if you don't have

It's interesting, isn't it, Lawrence? I would hazard to guess that I think there's probably scope for us to probably do some work around here to support people because I know it always comes up for, I know our clients is they'll achieve an outcome and then they don't know how to enjoy it or they're constantly chasing an objective thinking that will give them a different feeling. And there's a psychology around both the attraction, the retention and also the, the, the the growth of your capital and your wealth, and there's different mindsets along those. if somewhere along the lines, there's a fixation around one thing or another, or there's a wound around a part of that, that will have a big impact and play out in a totally different way.

Yeah, so as we kind of dive into wealth and what are their biggest mistakes in wealth, what are some of the highlights that you want to kind of start off with?

Well, I think just in keeping to what we've just said, I think the biggest mistake I've made about wealth sometimes is realising that it will produce a feeling or suddenly give me a validation that I hadn't given myself. Right. So I that to me is probably the biggest thing that I've realised is, is what wealth is and what wealth isn't. Because I think once it, you know, once I release the attachment to what wealth is,

Hmm.

and dissociated it from what I am, that was really liberating. So you know how you quite often we see that in people who who we coach who are basically a puppet to the numbers that they see in their practice and their self-worth, esteem is it totally goes along the roller coaster. You know, like that can be an incredibly loving, successful person who has a down week and consequently their self-esteem goes through the floor as a result of that. And the moment that

Hmm. Hmm.

they hit the points where they feel like they should be, suddenly their self-esteem goes back. So to me, that was one of the biggest mistakes that I had an attachment to as well, that I've worked very hard to dissociate from, to actually go, here's who I am as a person, that's my self-worth, self-esteem, this is who I love, who loves me, et cetera. And then I could basically separate it from the attraction of wealth. And when I basically put it all in one circle and made it who I was, that wasn't a really great place to be.

So one of the things that you're suggesting, what you're saying is that, and I'm not sure if this is what, I want to put words in your mouth, but sort of similar thinking, right? So that's how I used to be, was like when my numbers were up, I was great. When the numbers were down, like I felt like crap. And it took a long time for me to kind of disassociate that feeling of the ups and downs, that I'm more than who one of my numbers tell me. And I actually had to relate to my numbers, really, my good weeks and my bad weeks were related to the effort that I put in.

Yeah. Yeah. Yeah.

and also to external circumstances that maybe I had no control over in the first place. There's always rationale rather than actually who identity. That's what you're talking about. You're separating identity to the outcome. You're actually more putting together, linking the outcome to possibly results, sorry, results to the effort you put in or other circumstances rather than who you are as a person.

Yep. Yep. Yeah, that totally is, basically seeing your sense of value and worth as a person, as a human, right? Yeah, I totally get that. You and I both are ambitious and we've worked hard and we do all of that. So let's not, I wanted to say it's, it's this, the essence of me plus this that equals that as opposed to saying this and this is that's just me. And I know, you know, we might've lost some people in there, but to me that it's the inner game of wealth and in a game of. fulfillment around wealth to me that has made sense. been a big journey is about dissociating, you know, being aware of being goals and objectives, but dissociating who you are at the essence of your core as a person from that.

Hmm. I think one of the things that, know, for, go on to the next one, which is for me, like one of the lessons I learned around wealth, more mistakes is thinking like, you know, if I X reach X amounts or X point and it's done, you know, I remember when I was a kid, I used to ask my dad, you know, how much do you make? You know, he was an engineer or he was a director of quality control for like an aerospace company. And, and I remember, I don't know, he never really gave me a exact figure, but I remember him. you know, I probably figured it out, was like six figures. Let's say it was $100,000, you know, at the time. And to me, I'm like, okay, then I set this figure in my head, if I earn $100,000, I'm good, I'm gonna be successful. And that just kind of became the thing. And I remember, so I would do this on a continuous basis. I remember my first year out, I was thinking to myself, I'm like, okay, well, if I saw 100 patients a week, you know, as a chiropractor, I'll be like really super successful because I saw a chiropractor, you know, a couple years ago who, in his first year saw a hundred and so therefore he set the standard. And then when I remember on the way to Australia, I flew to Australia because that's where I first worked. I moved all the way to Australia and the person that I was connected with who was a couple years ahead of me in Toronto worked there and he's like, you know, unfortunately I couldn't pick you up because my wife and I, because I only have a two seater. I'm like, what do mean two seater? What kind of car do you have? Because I'll have a BMW like Z4 or something and it wouldn't be able to fit you. wife and the luggages. I'm like, you drive a Zed 4? And then my mind's like, okay, 100 is not enough. Like, and then it was like, what do you see? And it's like, all of a sudden, like in one conversation, my, like, my standard for like the last three years was this. Like even before I started working, it just went up to this level. And so I guess like, I realized what over the years is that like, it's about two lessons. There's one is like, my comparison to others definitely affected what I wanted, but also too, but when I got there, it was never enough anyways.

Yeah. Yep. Yep. Yep.

Like it was always something more and no matter what level you reach, there's always, you're always striving to more. And that goes right back to your point, which is like your identity isn't about how much you accumulate, right? Because along the way, I think we all gotta go through this journey ourselves, right? So if you're in your 20s, 30s, like listen, you're gonna go through the program. Yeah, you go to this point where you start to realize, I'm like, oh, like there's actually two different chases right here. Like the chase of like becoming the person you wanna be, but there's also a financial chase you kinda go.

Yeah, I definitely have.

And reaching a number will never satisfy that because you always have a craving to do more. I don't know, maybe there will be a point where I'll be totally satisfied. But I think, and I do believe that, right? But it's not because of the numbers, because then you start to realize, like, what am I doing this for? I don't want to trade my time energy to do more of that, to get that exponential growth anymore. And I think that time will come at some

Yeah, think it's about, you know, am I prepared to pay the price? Am I prepared to keep doing this to get that? Is that more important to this? you know, you know, one of the fears that I've had, and, maybe you have, maybe other people have as well, is that they thought that, okay, if I just, you know, tone down that ambition, maybe I'll lose my edge. And what got me to this point, I am.

Yeah, that's a question. Yeah.

Lawrence has gone, you got me dude, you got me. But you feel like you're going to lose your edge. And I definitely had to cycle through that where I'm like, okay, if I'm not the driven, hardworking bloke, who am I? Right. And so much so, you know, in my dad told me a lot about things just sometimes by just the way he went about things. And for him, you know, he, was an unskilled migrant.

Cheers. Yeah. Yep. Thank

hard work ethic, but the timing that they got is like when the migrants came to most industrialized countries, they had to go and work in the factories and they had to buy houses close to the factories and the factories at that time were right in the heart of the city. So a lot of migrants ended up buying property right in the heart of the city. And when the factories went, okay, real estate is too expensive. We've got to move out to the suburbs. Suddenly there was a boom in real estate and my dad was a beneficiary of that. Um, you know, and so, you know, an uncle of mine bought a dozen properties for next to nothing in right in the heart of Melbourne. And then the X amount of times he's like, they were worth 50 times that amount. So sometimes there's luck and there's no doubt and there's no question about that. But I remember, you know, so my dad would have had, wouldn't have had a huge salary at anyone's stage. And I remember the first year out of chiropractic college where I earned 10 times more than my dad had ever. that in my first year out, I worked exceptionally hard. got to the point of burnout, but I also then had to cycle through the whole. And that's when I got a coach, interestingly, because a little bit after that, because I got to it. And a whole lot of kicked the lights out. Mind you, I drove myself into the ground, uh, but pretend I had just been married. We were starting from zero and it was like, go. know, um, but I had to cycle through the guilt of that.

Hmm.

you know, and I had to reconcile because I knew what I had done was a beneficiary of the effort that my dad had put into getting me to be educated. And suddenly I've gone, hey, there's 10 times what you've ever in one year. And I had to come at a make peace with that. So that was, that was a really big thing. And so a couple of years later, just to finish that off, I went and spoke to my dad and I said, Hey, listen, I just want to let you know, I know you worked exceptionally hard.

Yeah.

You know, in my first year, I probably 10 times more you ever did. feel really bad about that. And looked at me and goes, why? Why do you feel bad about that? Well, goes, dummy, what do you think we left the country, the mother home, motherland for you to have this opportunity and you not taking that up would have not, you know, so it was a really good reframe for me in terms of, of the guilt.

Hmm. Well, another thing that it's kind of a totally left field kind of comment here, but you know, I'll go on to my next thing, which is probably somewhat similar. Like, although I said, my dad earned, you know, say a hundred thousand dollars, you know, Canadian by the way. So it's not like us dollars or something. Um, but that was back in the. Yeah, exactly. Yeah. It's not real money, monopoly money. And, uh, you know, but that was in the nineties, right? So the thing is, one of the biggest mistakes I think it's like,

Yeah. Yeah. It's not, it's not real money. My bro, my son now says he lives in New York. It's not real money. Yeah.

not factoring inflation. you know, so this is my, that's my comment. It's like, yeah, $100,000 back then is, I don't know what it actually is in today's dollars, but it's gotta be more like 200,000 or 250. And so I think that's the thing, you know, factoring inflation is another mistake that I probably never factor in because, you know, your goals, you know, things just all cost more now, you know, and thinking that $100,000 was gonna be enough is that it's not even anywhere close in terms of. comparison to lifestyle that you want to live and you know, especially nowadays and this topic is quite hot at the moment, especially in the last few years and ever since, know, over the last four to five years, like the inflation is just getting out of control and worse in certain countries, of course, but you can really start to see the effects of how it is. And this starts with small things and not appreciating that too, because you know, the mindset of the, and I think that's important because the mindset of being earning a thousand dollars figure or even just being a millionaire is just like that slows you down if you don't factor inflation of what it actually takes to retire or actually takes to think. And the reason why I think that this is a mistake is because you are aiming too low, not factoring inflation and how that's going to affect your life that is so far away. Because when I talk about inflation affecting you next year, mean, although right now it is pretty bad right now, but we're talking about like what happens in 10, 20 years time inflation.

Yep. Yep.

I remember like in petrol dollars in terms of, know, like when I was a kid, when I was paying for petrol, you know, when I was 17 or whatever, I was paying at 50. I remember it was a 49.9, 49 cents a night. And if we went to 52, I'll be like outraged, you know? And, you know, and that's for per liter, you know? And then now like it's, you know, well above like right now it's euro, we're talking euros now. It's like, you know, I don't, I don't, I've got an electric car, but so, but I drive by the petrol station, look at it, it's like 1.7. know, euros, that's what in Canadian dollars is probably, you know, $2.40. And that's just and I'm 49 years old. So that's this is like, they're 4030, 30 years later, right. And that's what we're talking about. We went from, you know, petrol prices being 50 cents to now 250. And, and that's sort of like that that thought process and that that if you don't factor that in your cost of living, what you aim for when you were a kid is no longer applies when you're an adult, especially when you start having more expenses to kind of consider. So that's

Yeah.

one of my financial mistakes not thinking about it earlier enough.

And I think it's important, because it's a trade off. When you first go to a financial planner, one of the first questions I ask you is what's your risk tolerance? What allows you to sleep at night? And if you go, listen, I'm very conservative. Yes, they're going to allocate you more towards shares and, oh, sorry, cash and bonds, which are safer. But generally speaking, they don't have...

you

they don't tend to outgrow inflation. So technically by you not being able to embrace that fear, there's a trade off and the trade off is you're going to lose the borrowing capacity of your money over time. it's a, you are losing money. Yeah. And that's, and that's what has been demonstrated time and time again is in order to, and that's what the return is. It's the trade off for the risk that you're prepared to pay. You know, the higher risk generally for a lot of people, yeah, there's the potential higher reward and the

You're losing money. You're losing money by saving money.

the lower risk, the lower reward. And sometimes, as you said, particularly through this period of time when we had rampant inflation, if you've been traditionally a saver, you've gone backwards. And unfortunately, that, you know, over time, if that's your strategy over the long term, it's understandable where it's in the latter phases of your career, you do need to play a little bit more defensive, but not totally shut the gate totally. It's you need to factor in longevity risk. of your money and will it be there to support you later on if you have been playing 2K72 early?

Yeah, absolutely. What else has gone in play? What is your other biggest financial mistakes?

Uh, biggest financial mistakes was, he said comparison, um, was always a factor for me is about, um, getting involved in things that I didn't understand. Um, you know, like everybody, you know, the, the, the Dutch tulip, um, disaster was all the bubbles of the South sea bubble. Um, it was all about people just piling in going, Hey, that looks really good. I'm going to jump in and do it as well because you've told me to. So, so taking, guess.

Hmm.

direction and advice from people who I shouldn't have was all the process. And thankfully in those earlier stages, it wasn't with large sums of money, but I certainly learned the lesson where I didn't do my own due diligence and didn't understand things. I was just seduced by the idea of easy money and I just piled on and then sort of go just as quickly. What's the old saying? There's a fool in their money, you know, separated very quickly and there's sometimes someone with experience covered across with the money, someone will end up with the money and the other person will end up with the experience. That was me.

Yeah. All right. Well, okay. This is where my big reveal is. here's, here's, here, I'll set this up. Here's how I lost a quarter million dollars. Uh, and so this is exactly the same thing. So I remember listening, I was, uh, I remember reading, reading this book for Dr. DiMarcini, um, probably when I was in a university and I think it was, uh, the book title is something like how to make a hell of a lot of money. Um, well, it can still, it still go to heaven. That's right. It was a great title. It was a great title.

You And go, still go to heaven. Yeah, yeah. It's a great topic.

And one of the main themes of the topic, and I remember listening to the audio to this as well, which was, he basically said, in order for you to be wealthy, you need to start it in journeys and you need to do it in steps. And the first step you need to do is you got to figure out how to save. If you don't learn how to save, there's no way you're going to be able to invest. then he goes, basically, once you learn how to save, you get into a habit, save 10 % of your money, and then you learn to, each quarter, go up by 10 % on top of that. Which is not 20%. going from 10 to 11%, 11 to 12 and 0.1 % and so on and so forth. And I thought it was like, okay, this is really interesting. So I started doing that. He said, save until you reach about three months worth of your salary, I think, and then have that saved. Once you've reached that, then you start to invest. you don't invest in stocks, don't invest. You start with investing in bonds, know, something safe, you something that's lower. And then once you learn how to invest in that, then you go into stocks, then you go into real estate or whatever it is. So what he's talking about is like this hierarchy of like, learning from the basics, not for the point of making money, but to learn how to do the fundamentals before you jump. And basically what he was saying, the lesson I got was don't jump, what's the saying? Like don't ski above your toes or whatever it is. Don't go into things that you're not ready for yet. And do it step by step, and if you do it, follow the step, you won't lose everything and you're gonna be able to be fine overall. Of course. you know, when you're 30 years old and you're making a ton of money, you don't think like that. You're like, ah, I've gone into real estate after buying like two or three years. I'm like, oh, I'm good. can now, instead of just buying the next thing, which would have been maybe like buying a fourplex or twoplex even. No, what do I do? I go into speculative investment, which means like, let's buy, let's go into a, with a group of people to buy speculative farmland, right, in Victoria. And you know, you can make 10, $20 million if this hits. I basically jumped probably about five steps. And again, there was a whole bunch of people that I knew that were in it and we went into it and even got my mother and my parents in-laws. I got my parents involved in this. And yeah, basically personally, you know, during that crisis, it was a total Ponzi scheme and ended up, we lost, yeah, I lost a quarter million, $250,000. I was about, this is 2008.

Yeah.

So just around the GFC. So this was, yeah, so this was a long time ago, but it was still one of those 16 years ago when my daughter was born. And that was a lot of money back then. But the main difference, one thing that saved me between my investment versus someone else's investment is that I invested somewhat knowingly that it was obviously very risky, but it was also something that I...

Yep. Yep.

obviously didn't want to lose, but it wasn't my life savings. And whereas other people who invested was their retirement fund. They were further along in their careers and they lost everything. And that was a great lesson for me to learn to recognize that I still had time left. And it was one of those things I realized, I'm like, okay, if I lost this all, which I could possibly, I could start over again. Whereas some people just... didn't have the time. They didn't have the runway because they were already in their 60s. They were already in their 70s. And now they just lost their retirement. And that was devastating to see and the pain that actually caused a lot of those people. I would just happen to be lucky and maybe fortuitous in the sense of knowing that only invest in something that you actually have a willingness to kind of lose it all.

Yeah. And I'm certainly familiar with that experience in there. And a lot of people I know as well too were involved in that as well. lost a lot of money. So it's painful. you're right though, there's a big, you know, I remember once going to the casino and by extent, don't normally go to casinos. I avoid them. not really a place I enjoy being around.

Yeah.

But I remember being there and just watching someone ripping over a pay packet back in the days where people used to get paid in a little packet. That's how long it's been since I've been in a casino. And I'm just looking at this bloke going, dude, don't do it. Don't do it. There's someone at home who's waiting for you to come home and, and don't do it. And, you know, like, I think that really left a mark on me. And so I think it was always a case of I will never, um,

Wow.

bet or invest something that destabilizes everything else. So if I go into anything, it has to be with the idea that I potentially could lose this and it can't un-rattle me. And that's really helped. But continuing on from what you've said too, I too have had a loss in the multiple hundreds of thousands of dollars as well in a night. And so, you know, my...

Hmm.

My comfort zone is definitely real estate. I've always invested in real estate and in shares. They're the ones that have followed through. But I went through a period because I was a very, what's the word? That was the model that had worked, that I'd seen had worked really well. And some of the mistakes were that I tried to put my foot on the gas a little bit faster as well. They say in money, it's either fear and greed that are compelling drives. And greed was definitely.

Yeah

showing up there where I got into forex trading and forex trading is for people who don't know it's currencies, it's looking at the it's a 24 hour 24 seven mark a 24 six market. So it's basically looking at the you know the difference in we talk about Canadian dollars and American dollars Australian dollars it's basically the interplay between all of those at any one time there's a change and I really loved

Hmm.

that, you know, because I saw the excitement of it. I was driven by that. And I looked at it and it made sense. I've always been interested in business. And I went, yeah, okay, I'll do this. And one of the worst things that ever happened was I had phenomenal success really quickly. And so consequently, you know, I went in with a certain amount of money, probably 30 grand, and that went to nearly half a million within, I don't know, two months.

Hmm. you Wow. Wow.

It just took off, took off. I took off the initial money that I put into it plus some money aside, but effectively it was probably over one night because of my blind spots, the superhero, like I am just a fantastic person. It was probably over 350,000 bucks I lost in a night. And it was just, I was thinking, like I'm untouchable here. I've got this under control.

Wow. Jeez.

Something happens to you when you, you do that, you know, cause it back at that time, it was, you know, I'd made it a month or two more than I'd made in a couple, a year or so, you know, and you start believing your own narrative. And, but what I realized is I didn't like who I became in that process because I was just so obsessed and by nature I'm an all in type of person. And so that didn't fit my, my, uh, pro pop.

Hmm. Hmm.

as basically a person into it. So I just found that it just, didn't switch off. I was constantly and I'd get absolutely cooked. So after I lost that money, I just went, you know what, this is not the area for me. I don't really enjoy this as much. And so, you know, one of the biggest learnings I took out of that was I learned later on, it's like, listen, leave an exciting life, make boring money and lead an exciting life. and find ways that compound that lay to sleep. And I put a lot more weight on that than I previously had up until that point in time. So that doesn't mean that I don't still look for opportunities, but for me, it has to be something that I don't lose myself in and I don't lose sleep and it affects my health because it has the capacity to do that. Just know myself in my own temperament.

Which brings up a point too as well. think one of the things that the biggest mistakes I didn't want, like they're one of the other biggest mistakes I didn't do as well as I started investing really young. As soon as I sort of came out of college and university, I started investing and really dived into real estate and wanting to do that. One of the challenge was that quarter million dollar loss, like that thing that happened 2008 really shook me in a bit in terms of investing.

Hmm.

And so what I did was that I actually put pause on investing in this, started investing back in myself and my business. But I didn't actually continue investing into other stocks, bonds or real estates or whatever. Like I didn't get back on my horse. just basically, I invest in different things, which is my business, which is not bad. But what I didn't do was put money back into the market. And so that's a big mistake. And I think that, you for the next 12 years, I didn't do that. It was not until 2020 when COVID happened, that's when I actually started to kind of... made some decision like, okay, I'm getting close to 50 here. I got to start acting my age and actually start putting, because I always felt that I had so much time, right? And I wish I kind of started early, things would have compounded. But here's the point, there's two lessons. One was that I should have started investing earlier and I always tell people, my clients who are younger than me now, like, go see that now, right? It's always the famous thing. It's like, the best time to invest was yesterday, the next best time is actually today. The second thing, the reason why I'm saying that is because the biggest mistake I didn't learn was recognizing that you actually have to go through these ups and downs in investing and financial markets to actually understand. Yeah, like you actually have to go through it. Yeah. Like you can't do it on the sidelines because it's so different when you're like, even if you went on like these, my kids are playing this game at the moment, like, you know, to beat the market, which is like they have a hundred thousand dollars in fake money and they put it into stocks and then see how it goes after a few months time, right?

They're rots of passage, really, aren't they? They're rots of passage.

The problem is that it's not real money. And so there's no emotional attachment to that. It's just the game. And so when I, I never invested in the stock market before, because I lost a whole bunch of money on the stock market. Like, during my fake money, I was like, oh, the stock market is not for me. Mine went to real estate or whatever. But until you actually go through it, like you're going to get your highs, you're going to get your lows. I've lost money in real estate as you know, but I've lost money in everything, but you also had some gains. And so it's recognizing like, you know, in your case was also just going the four axis. You have to kind of go through that. Like, luckily, in your story, sure, you lost 350,000, but in hindsight, it's like, it was actually paper money, right? You did have it physically in a way, but you didn't actually have it because you never sold it, right? But you did take out your initial thing, which was a smart thing. Most people didn't even do that. So the thing is the thinking about it is that, is actually recognizing the emotion that goes with it, right? The highs and the lows. Like, I've been in crypto for the last five years, or, you four years in a bit. Like, just... putting some money in it and watching my emotion of how like when I'm the high, you know, the thing that I realized was, know, the, they say what's Buffett's rule? Like sell when everybody's greedy, right? Buy when everybody's is fearful, right? That's like, of course that is so wise Warren Buffett. But do you know how hard that actually is? Like to actually put that in play, which is almost impossible. Like I played this game for the last four years.

fearful. Yeah. Yeah. Yeah.

for four years now, and it's like, when things are going, like you do not want to sell, right? But even though like every party of beings says, don't sell, don't sell, but that goes against everything of what Warren Buffett tells you. And so, which is like the challenge, but to recognize that, be, but you have to be in the game to feel what that feels like. It's easy to be the armchair quarterback to watch a game and go, hey man, why didn't you catch that ball, right? Until you are in the game when the freaking,

Yeah. Exactly. Yeah.

football is coming at you 100 miles per hour and you're like, I got to catch this thing with like 300 pound guys just about to smash me to bits. Like you don't realize that how fast everything is. And I think the same thing goes with investing. Like you have to be in it. Even if it's $10 or a hundred dollars or whatever, but you can't learn these emotional roller coaster rides unless you're actually in it. And I wish I did that earlier.

Yeah. Yeah. You got to ride the waves. You got to ride the bumps and take the lessons and the learnings and the it's um, I did a course years ago when they talked about, um, like your nervous system and it was Ben, Harvey, authentic education in a program called it was the way of the wealthy. And it was a five day program that I did, which was phenomenal. And, um, he talked about, you know, at a nervous system, you know, actually a backstrap, he goes, he said that when we study the long-term effect of real estate in Australia at that time, the long-term rate was around about 10%. And when he looked at shares, it was around about 10%. It was at that time that we talked about it. So what he was saying is there's what's called an alarm reaction in your, in your nervous system that if you go above 10 % or below 10%, it's like a warning to your nervous system and it's close, hey, danger, danger, danger. So if you kick the lights out really quickly, suddenly you're like, you're a baller. Everything's going great, fantastic, whatever. And your nervous system goes, hey, what's going on here? I better stop that because this is not safe, right? And alternatively, if you dropped there, then you go defensive and you get fearful and whatever. If you go outside of that, you start closing it down. So the key that they'll basically saying is how you...

Yes.

handle that is the emotional regulation in the journey. that you actually, irrespective of what goes up and down, to be able to regulate your own emotions, to normalise it so it never feels like it's danger or fearful and consequently you won't make either silly mistakes or go into your shell and to retreat. And it was fantastic wisdom that I had. But the only way you can do that is through dose exposure. You're gradually doing it, you're gradually increasing your tolerance. And as you feel more and more comfortable, it's kind of like a weight. Yeah. You don't try and lift 350 pounds. Day one, you have to gradually increase your strength and your muscle load up until the point you work up to the heavier weights. It's exactly the same.

Yeah, and it's hard. It's like, even though you know it, it's about, you know, investing. there's also the other thing I learned about investing as well is there's a difference between investing and trading, right? Like investing is about long-term and trading is like getting in and out of positions fast, which is the Forex stuff, right? And if you're investing, you're not trading. And if you're trading, you're not investing. And they're two different things. And fundamentally recognizing that is key because then you're listening to different people. You hear things differently.

Yeah.

Right? Because you can say people, oh, you got to get out or this way you got to, you things are going down. like, well, if you're investing in like a long-term timeframe of like 5, 10, 20 years, it doesn't really matter what happens like tomorrow or what happens in this particular cycle. It matters more about, you know, what happens in 5 to 10 years, but you still can, it's hard not to get caught up in the day-to-day cycles and all the swings of the 5 % to 10 % swings or even the 20 % swings, you start to realize, I'm like, oh man. Like this is hurt, I should have done this, then you put energy into it. But if you got the long-term cycle, then you don't actually stress about these little blips because these blips do happen. And it's hard to zoom out when you're kind of caught in the middle. But that's what I mean. But the emotional regulation when it comes to wealth and investing, that's really challenging and fascinating psychology. And it's part of the process to actually understand this. I'm trying to get the kids to understand and trying to like they they putting some money into themselves into the stock market and the crypto or whatever they're doing. And I want them to see and feel the energy because they're thinking like they don't need they don't have to like need they get the thrill when oh my god you know things have gone up 10 % or whatever but also recognizing oh like you know almost kind of somewhat trained them with my daughter is like all right Tesla's drop 10 % let's go I want to buy some more dad right it's like okay. It's like recognizing that for her, this is the long-term gain. They're trying to think long-term. They're not worrying about trying to extract this money today. They're thinking about in the future, which is for us, it can be a bit hard because we're seeing this up and down swing, which is affecting our wealth profile. And these 10 % swings can create some really negative stressors if you're not careful.

Yeah. And I think paramount for me when I was, I thought I was a better trader, but I realized I'm actually my, my personality type is more suited to being an investor, even though I can invest in more speculative things if I came along. So for example, you know, we've just launched this startup in New York and it's, it's a new venture. It's, you know, it actually had Um, it was presented to, uh, VCs. loved it. They wanted to take control over it. We went, no. Um, so we just bootstrapped it rather than raised all the capital and we're okay with that. Right. So, but to me, if I've got to dig it up every day to see how it went relative to yesterday, that's going to stress me out. Whereas if I just go, look, man, you put X amount of money in, um, this is a long play. It's just, you know, write it out. Then I'm more comfortable with that. Even though I could have put less money into a deal, but got into a training mindset, that would have stressed me out. So I just, I think it's understanding yourself. And as time goes on, you better understand yourself. Um, but yeah, that's, um, that's, think that comes with experience and time and, and earning your stripes and getting your ass kicked every now and again, and, taking the learnings from it. Um, yeah, you'll retreat as I have sometimes and, and go into your cave and.

Yeah.

after you've licked your wounds, come out again and go, okay, what did I learn? How do I go about this differently? I think that to me is an approach to not only investing, but life as well. If you play to not to lose, you're gonna get a different outcome than if you're playing to win. And if you're play to win, there's a chance you will lose.

Yeah, exactly. And I think that that's why I think it's important. Like one of the major lessons in summary is like one, you got to play to win, right? Like if you can't, if you're not in the game, you're not actually learning and you're not actually able to kind of reap the rewards, not just from the rewards of the financial part, but also the rewards of the emotional regulation that you need to have when it comes to investing throughout your lifetime. And I think that it's a lot easier to learn those lessons where you're young when the stakes are low. It's a lot harder. Like for me, I would say like, you know, I'll fully admit that my investing journey started really late and it's a lot harder to deal with when you're older because there's a lot more at stake because I know my runway is not as long as say my daughter or my son. Their runway is a lot longer. for them to lose, save even 50 % is nothing to them. Comparatively, if I lost 50%, that could be very stressful. And I think that the other thing to think about too as well is that it's recognizing that you gotta know yourself. The most common theme we've been over and over again is you gotta know what your risk tolerance is at this stage of your life, but also can you increase it over time? And more importantly, what interests you the most? It's very difficult to invest in something that you have no absolute interest in. And just because someone else told you that you should invest in nuclear power or you should invest into silver or gold or whatever, like if you have no interest in it, sure, like it might just be about the money, but I think it's a lot easier to invest in something that you actually believe in and you actually have an understanding of it because at least you'd not then be factored by, you know, someone's opinion or advice. You're actually looking at some sort of fundamentals and you have to take a bet on what you believe is going to be true in the world. And you might be wrong, you might be right, but at the end of the day, you kind of were working with fundamentals rather than trying to... based on someone, know, someone on YouTube suggesting you should invest in X.

Yeah, I'm complete. I think we've covered a lot of what we wanted to get out there. So yeah, let's wrap it up.

All right. Well, I hope that you guys got a lot out of that. I know it was good to reflect upon, you know, my journey and it's good to hear about yours too, Jim. So similar pass like it's again.

Same, Suddenly, it's like suddenly we don't feel as bad about each other as we did. But as time goes on, you're gonna get, like I said, some lessons and you're gonna get some learning. It's about what do you use that to in order to move forward.

Yeah. Yeah, perfect. So I hope that you guys enjoyed that podcast. I'd love to kind of hear back in your feedback around the financial mistakes that we've made and more some of yours until next time on the podcast of Wabi Sabi. This is the art of imperfection. Take care.