Watch the extended version HERE.

Investing is often called simple and easy, but it’s really not. It’s like getting six-pack abs—everyone knows you need to eat less and work out more, but doing it is a whole other story. With investing, knowing what’s hard can make all the difference.

First up, uncertainty. Approaching investing feels like putting yourself out there, like when I worked up the courage to talk to my wife before we were married. There’s no way to know how a stock will perform until you try. Sure, I could go for guaranteed returns with a CD or treasury bond, but the stock market averages 10% annual returns over the long term. That’s powerful for building wealth.

But uncertainty messes with your head, especially during market crashes. When prices drop, it feels like stepping off a cliff—terrifying, even if you know it’s the right move. I still remember the 2020 COVID crash. The market plummeted 30%, and fear pushed people to sell at the bottom. Then, within five months, it bounced back. The best way I deal with uncertainty? Automatic investing. I set $100 to go into the market every week. No overthinking, no obsessing. Over time, the stock market’s long-term growth does the work.

Second, boredom. Investing isn’t exciting most of the time. It’s a slow grind. If I invest $50 a week for two years, I might end up with $6,000. Not thrilling, but stick with it for 20 years, and it’s $163,000. After 40 years? Over $2 million. That’s the magic of compounding—it starts slow but snowballs over time. To beat boredom, I set up automatic investments and focus on other parts of life. Checking my returns daily is a shortcut to burnout.

Finally, there’s the debate: active or passive investing? Active investing is like building custom furniture—it’s personal and can be rewarding if you’re skilled. Passive investing is IKEA—simple, reliable, and cost-effective. For most of us, consistently investing in low-cost index funds beats trying to outsmart the market. Even pros have a hard time outperforming passive strategies over the long haul.

The hardest part of investing isn’t picking the right stocks; it’s sticking with it through the ups and downs. Automatic investments and a long-term mindset make all the difference. 

But before you start investing in 2025, check out this video HERE to see how to put yourself in the best position to succeed. 

Cheers!

Watch the extended version HERE.

Grok is the new AI on the block, but is it better for investing than ChatGPT? That’s what I wanted to figure out. Grok costs $16 a month, ChatGPT is $20. Saving $4 sounds nice, but is it worth it?

I started by testing how both tools handle public sentiment. Grok stands out because it’s plugged into X (formerly Twitter) and can track real-time conversations. It’s great for spotting shifts in how people feel about companies, which is huge in investing. Fear and greed drive stock prices, and when fear pushes prices too low, there’s opportunity.

During COVID, cruise stocks like Royal Caribbean dropped from $131 to $24 because people panicked. Now? It’s trading at $250. On the flip side, Peloton soared to $162 before crashing to $10 when gyms reopened. Grok helps me find those fear-driven drops and potential recovery plays.

I asked Grok to find companies with recent negative sentiment but signs of recovery. My first results were swamped by the Magnificent Seven—companies like Tesla and Apple that dominate online chatter. After excluding them and filtering out meme stocks like AMC, I finally got a decent list of companies to explore, including Boeing, Carnival, and DocuSign.

Next, I tested financial analysis. Grok’s results looked solid at first, but when I fact-checked, key numbers like the current ratio were slightly off. That’s a deal-breaker. ChatGPT, on the other hand, nailed it. By specifying sources like StockAnalysis.com, ChatGPT pulled accurate financial data and ranked companies based on health.

ChatGPT’s Excel capabilities sealed the deal for me. I uploaded financials for multiple companies, asked it to analyze trends, and it spit out clear graphs and insights. Grok can’t do that. While Grok’s real-time sentiment tracking is valuable, ChatGPT offers a full package: sentiment analysis, reliable financial data, and in-depth custom analysis.

For now, I’m sticking with ChatGPT. It’s a one-stop shop that saves time and gives me confidence in my research. If you’re looking to level up your investing game, ChatGPT delivers the edge I need. If you want to see my full investing process, check out this video NEXT.

Cheers!

Don’t start investing in 2025 — at least, not yet. If you’re not careful, jumping in too soon could hurt you more than it helps you.

Many people hear “start investing early” and think they need to rush in, but investing isn’t a one-size-fits-all solution.

There are specific times when investing might not be the right move, and skipping these steps could leave you worse off.

I’m sharing three key situations where you shouldn’t invest, how to know when you’re ready, and why all three are critical to address first, so make sure to read till the end. 

Watch the extended version HERE.

Don’t Invest If You Have High-Interest Debt

The first situation to watch out for is letting the wrong people invest in you. When we invest in the stock market, we can expect an average return of 7–10% per year. Some years might be higher, some lower, and occasionally, we might even lose money. But over time, $100 invested today could grow to $110 next year.

So, what do I mean by the wrong people investing in you? When Natalie and I bought our house, we got a loan from the bank at a 4% interest rate. I’m okay with that because I expect my house to appreciate by more than 4% over time. Plus, I can use the cash I didn’t put into the house to invest in the stock market and potentially earn 7–10%. Losing 4% here but gaining 7–10% there works out in the long run.

What I don’t want is letting credit card companies invest in me. The average credit card interest rate is around 20%, which means they’re getting a guaranteed 20% return if I carry a balance. By paying off my credit card debt, I’m essentially getting a 20% return on that money — something I’d never find in the stock market.

Carrying credit card debt is like having a hole in your boat while trying to row faster to fix the problem. If I invest $100 in the stock market and earn 10%, that’s $10 gained. But if I have $100 in credit card debt at 20%, I lose $20 on that same $100. I’m up $10 but down $20 — it just doesn’t add up.

The average American carries $6,000 in credit card debt, which costs more than $1,200 a year in interest. That’s more than many beginner investors earn on their investments. If you have high-interest debt, paying it off should be your first priority. It’s like locking in a return equal to the interest rate you’re paying. This applies to credit cards, payday loans, car loans, or even student loans — any debt with an interest rate over 5–6%.

Don’t Invest Without an Emergency Fund

Once my debt is under control, there’s another financial priority that Ineed to tackle before investing. 

The biggest mistake people make in the stock market is selling when stocks are down. It sounds obvious — don’t buy high and sell low — but life doesn’t always make it that simple.

If all my money is tied up in investments and I face an unexpected expense, like a medical bill or car repair, I’m forced to sell my stocks no matter what the market looks like. That could mean taking a big loss, and it defeats the purpose of investing.

Investing without an emergency fund is like building a castle on quicksand — one emergency, and everything crumbles. 

Most experts recommend saving three to six months’ worth of essential expenses. I base this on my job security. If I think I could replace my job quickly, I might save three months’ worth. If finding a new job could take longer, I aim for six months or more.

For me, essentials include rent, food, utilities, my car payment, and my phone bill — anything I need to survive and keep working. Once I have at least three months of these expenses saved, I feel secure enough to start investing.

Don’t Invest If You Don’t Have a Clear Plan

With my debt paid off and an emergency fund in place, there’s one more thing I think about before investing: my goals and timeline. 

Investing is powerful over the long term, with average returns of 7–10% over 10, 20, or 30 years. But in the short term, it’s unpredictable. Markets can crash, like in 2008, when investors lost half their money in just two years. Over decades, the market typically recovers, but that doesn’t help if I need the money sooner.

Natalie and I are saving up to have kids in a couple of years. That’s a big expense, and we need to know the money will be there when we need it. If I invest it in the stock market and a crash happens, we might come up short for hospital bills or other essentials. 

For short-term goals, I stick to safer options like high-yield savings accounts, CDs, or bonds, which offer guaranteed returns over a shorter timeframe.

Before I invest, I always ask: What am I saving for? Short-term goals like having kids, medium-term goals like buying a house, or long-term goals like retirement? Knowing my timeline and risk tolerance helps me make smarter decisions and avoid gambling with my future.

Once I’ve addressed these three priorities — debt, an emergency fund, and clear goals — I’m ready to invest. But even then, mindset matters as much as planning. Emotional pitfalls can lead to costly mistakes, like selling at the wrong time, so check out THIS VIDEO where I’m sharing the nine mind traps that cause investors to lose money in the stock market.

Cheers!

The next 30 days can define your entire next year.

The clock is ticking, and the decisions you make could set you up for the greatest financial comeback of your life. Last year may not have gone the way you wanted. Maybe you missed some goals or you feel stuck, but I’m going to share three powerful strategies to reset, rebuild, and come out stronger than ever in the new year, no matter where you’re starting from.

Watch the extended version HERE.

1. Master the Basics of Personal Finance

If you’re feeling like your money didn’t go far enough last year, there are two ways to address it. Sure, earning more can help, but without a plan, it’s like trying to outwork a bad diet — it won’t work long-term. Eventually, we all want to stop working, and if I haven’t managed my money wisely, even earning a lot won’t save me.

That’s where the Prime Directive comes in. It’s a step-by-step guide for managing every dollar, created by the Personal Finance subreddit. Here’s how it works:

Level 1: Essentials

Start by budgeting. It’s not fun, but it’s necessary to know where your money is going. Cover basics like rent, utilities, food, healthcare, and minimum debt payments. This keeps your finances stable and your credit intact.

Level 2: Emergency Fund

Save $1,000 or one month of expenses, whichever is greater, to handle small emergencies. Then, pay off non-essential bills like cable or a fancy phone plan if they’re not part of your income-earning essentials.

Level 3: Employer-Matching Funds

If your employer offers a retirement match (like a 401(k)), prioritize this next. Contributing enough to get the full match is like getting an instant raise — most employers match 50% of your contribution up to 6% of your salary. This is free money you don’t want to leave on the table.

Level 4: High-Interest Debt

Next, tackle high-interest debt, typically anything above 10% like credit cards. Use the avalanche method (paying off the highest interest rate first) for faster results or the snowball method (starting with the smallest balances) for psychological wins. Both work, so pick the one that keeps you motivated.

After clearing high-interest debt, go back to Level 2 and build your full emergency fund — three to six months of expenses, depending on your job security and potential big-ticket costs. Then, move on to moderate-interest debt (4–10%).

Level 5: Retirement and Short-Term Savings

Here’s where things get interesting. Add more to your retirement accounts, choosing between a traditional or Roth IRA based on your tax situation. If you have big expenses coming up — like buying a house or a car — keep that money in a savings or checking account instead of investing it. The stock market is too unpredictable in the short term for money you’ll need soon.

Beyond Level 5

Levels 6 and 7 dive into extra retirement savings and advanced strategies, but reaching Level 5 is already a strong financial position. From there, you can customize based on your goals.

The Prime Directive has been a game-changer for me. It keeps my finances on track and ensures every dollar is working toward something meaningful. Following these steps builds a strong foundation that sets me up for long-term success.

2. Open an Investment Account

The best way I’ve found to save money takes advantage of a natural human ability: we adapt to almost anything. Studies show that once someone earns more than $75,000, extra money doesn’t significantly boost happiness. This is thanks to hedonic adaptation — our tendency to return to a baseline level of happiness after both amazing and terrible events.

When I get a raise, it’s tempting to spend more and enjoy that initial spike in happiness. But I know it’ll fade, and my spending will just lock me into a higher cost of living. To avoid this, I automate my savings. Every time I get paid, a portion of my paycheck goes directly into my savings and retirement accounts. By keeping my spending habits the same, I adapt to my current income while saving more for what really matters later.

With my plan in place and savings automated, it’s time to focus on building the best investing strategy.

3. Build Your 2025 Investing Plan

If you are feeling overwhelmed by the thought of investing, the simplest investing approach can be explained in three steps.

First, understand the spectrum of investing, as explained in The Intelligent Investor by Ben Graham. On one end is active investing — high effort, requiring skill and expertise to beat the market. It can work, but there are no guarantees. On the other end is passive investing — low effort, diversified, and focused on getting average market returns. Surprisingly, being fully passive often outperforms many active investors.

To start passive investing, I look for a diversified, low-cost index fund or ETF. A great example is the S&P 500, which tracks 500 of the largest U.S. companies and has delivered average annual returns of 10% over the last century. SPY is a popular fund with an expense ratio of less than 0.1%, meaning almost all my money stays invested. High fees, even just 2%, can eat up half my savings over decades, so keeping costs low is critical.

Consistency is the key to success. I don’t wait to save up a lump sum — I invest small amounts regularly. While investing all at once may be mathematically optimal, it’s tough psychologically if the market drops immediately. Spreading out investments makes it easier to ride out market swings and stick with the plan.

Finally, it’s important to use the right accounts. Retirement savings go into accounts like 401(k)s, IRAs, or HSAs, while general investing can go into brokerage accounts. Each account has unique pros and cons, so picking the right one is essential for maximizing returns so check out this video HERE to see the full breakdown on the traditional, Roth, and HSA accounts.

Cheers!

You can wake up this time next year and realize you’ve just had the most financially successful year of your life. The key to this transformation is something that you can start doing today. 

Many people set financial goals every new year, but most fail by February. 

Why is that? 

It’s because they’re relying on outdated habits.

2025 can be different for you, not by doing more, but by doing different. 

I’m going to show you three specific changes that you can make in 2025 to transform your finances. Stick with me, because by the end, you’ll understand why most people fail, but you won’t.

Watch the extended version HERE.

Build the Right Financial Foundation

There’s one thing we all know we should be doing, but no one wants to: budgeting. It’s like building a house on a shaky foundation — everything looks fine at first, but over time, cracks start to form. By the time the damage is visible, it’s expensive and stressful to fix.

I had a coworker who didn’t plan his spending. Anytime things got tight, he’d float his balance on his credit card and only pay the minimum. It worked for a while, but after three tough months, his balance ballooned so much that even the minimum payments became hard to handle. He had to take out a lower-interest loan just to pay off the credit card. 

The worst part? During that time, we were both working overtime to make extra money, but all his hard work went toward digging out of that hole because he didn’t have a solid budget to start with.

Budgeting as Foundation of Financial Planning

I get it — budgeting isn’t exciting. Most of us want to skip to the fun stuff like investing, starting a side hustle, or making extra money to grow our wealth. But all of that falls apart without a solid financial foundation. It’s like building a mansion on quicksand — it looks good until it sinks.

For me, budgeting isn’t just about avoiding worst-case scenarios. It’s about maximizing my happiness. I track where my money goes and make sure I’m spending on the things that truly bring value to my life. Because money isn’t just cash — it represents my time and energy. I trade hours of my life at work to earn it, so wasting money feels like wasting my life.

Once I’ve nailed my budget and set up an emergency fund, then I focus on growing my money. That’s when investing and other opportunities start to make sense. But it all starts with the basics — building a solid foundation to make everything else possible.

Focus on the Big Wins

Would you rather hustle every day to save a few bucks here and there or focus your energy on one move that could make a huge difference? Once I nailed the basics of budgeting and saving, I realized that grinding for small wins wasn’t the best use of my time. Going from saving 0% to 10% of my income was a big win. Even bumping it to 20% wasn’t too hard. But pushing for 30% or 40%? That’s a grind, and there’s only so much you can cut before you hit a ceiling — and at that point, are you even enjoying life?

Instead of spending hours clipping coupons or chasing minor savings, I started looking for the big wins. When my friend switched from mishandling credit cards to using them strategically, he saved thousands. He was paying $1,000 a year in interest for every $5,000 in credit card debt. Once he paid it off and started using rewards properly, he made money. Last year, I earned over $4,000 in credit card bonuses alone.

Another big win for me was moving money out of a savings account and into investments. Keeping it in savings was costing me money due to inflation. Now, with average market returns of around 10%, every $10,000 I invest earns me $1,000 a year. That’s compounding in action — what Einstein called the eighth wonder of the world.

401K Employer Match Contributions

Then there’s the 401(k), which so many people underestimate. I hear complaints that it’s slow or not worth it, but my 401(k) is a money machine. My employer matches $1 for every $2 I put in, up to a certain limit. If I contribute $5,000 in a year, I get $2,500 in free money. Plus, I save over $1,000 on taxes because 401(k) contributions are pre-tax. That’s $3,500 in extra money for doing nothing except setting up automatic deductions from my paycheck.

The biggest win, though, is increasing your income. This takes effort, but the payoff can be massive. It might mean asking your boss for a raise, making sure they know the value you bring to the company, or even switching jobs if that’s the better option. Studies show people who change jobs typically see bigger pay increases than those who stay put. Of course, there are exceptions — like when staying in one place sets you up for a bigger leap down the road.

The key is focusing on moves that can save or earn thousands with minimal effort. Optimizing your 401(k), fixing your credit cards, and pushing for higher income are game-changers. Instead of grinding for small wins every day, I’ve learned to put my energy into big wins that keep growing over time. And there’s one more strategy that completely transformed how I think about money — it’s not about numbers, but it’s a game-changer.

Rewire Your Financial Mindset

Wealth doesn’t start with your wallet — it starts with your mindset. The way I think about money has completely changed how I approach it. It’s my mindset that helps me focus on the big wins instead of wasting time on tiny, meaningless victories. It’s what shapes my budget and helps me spend money on what truly brings me happiness while cutting out what doesn’t add value.

I’ll admit, this took some work. I used to make the same mistakes over and over. I’d spend hours optimizing every penny, like figuring out how to save an extra $30 to invest that month or juggling five credit cards to squeeze out an extra 1% cashback. I thought I was being smart, but I was missing the bigger picture. Honestly, I should’ve started this YouTube channel way sooner — that would’ve been a much bigger win.

Power of Investing in Your Future

Your mindset works like a GPS for your money. If it’s stuck in scarcity mode, you’re going to miss the big opportunities. I’ve seen so many people focus on what they can’t afford instead of figuring out how to afford what matters most to them. That kind of thinking holds you back.

The key to rewiring your mindset is setting clear goals, practicing gratitude for what you already have, and focusing on progress — not perfection. When I started thinking this way, every financial decision felt easier and more aligned with what I truly care about. 

Earlier I mentioned how I used 401K to my advantage to get free money from my employer. Check out this video to see what crucial mistake 46% of Americans are making on this account HERE.

Cheers!

If you’re still waiting for the perfect time to invest, here’s a hard truth. 

It’s already here. 

Let me show you why your age doesn’t matter, your income doesn’t matter, and if you’re waiting to start investing, it might cost you your dream life. 

Watch the extended version HERE.

1. The “Why” of Investing

Before investing a single dollar, it’s important to understand why investing is such a powerful tool for improving our lives. 

It all comes down to what money represents: freedom, time, and happiness. We need money to cover the essentials like shelter, food, and safety, but we also want it for the things and experiences that bring us joy.

Earning money takes time, so every dollar we spend represents a piece of our lives. If I waste money on something that doesn’t bring value, I’m essentially wasting the time I worked to earn it. That’s why I focus on spending only on what truly matters and saving the rest for things that will bring me even more value in the future. Saving also sets me up for the day I can’t or don’t want to work anymore.

Investment returns VS Inflation

But here’s the problem: money sitting in a savings account loses value every year due to inflation. The price of everything keeps going up, so the same dollar buys less over time. That’s why saving alone isn’t enough. Investing stops the bleeding and goes a step further — it grows my money. When my investments earn enough to cover my expenses, I gain the ultimate freedom: the ability to stop trading my time for money.

Understanding this principle puts us ahead of most people, but knowing why investing matters is just the start. We need a solid plan.

2. The “How” of Investing

People love to point to someone like Elon Musk and say, “There’s no catching up to him, so what’s the point?” Sure, if Elon has $300 billion and I save $1 million every year, it would take me 300,000 years to match him. But Elon didn’t just save his money — he invested it.

If I invest a million dollars a year with 10% average stock market returns, it would only take 108 years to reach $300 billion. That’s the power of investing: turning an impossible timeline into something achievable.

Investment Calculator

I don’t have $1 million to invest every year, but if I start with $1,000 — money I’d usually waste on impulse buys, takeout, or random junk — and invest it consistently, it adds up. That $1,000 can double in about 7 years, turning into $2,000. If I invest $1,000 every year for 40 years, I could grow it into $486,000. When I’m 65 and ready to retire, that half a million will bring me so much more happiness than the junk I would’ve bought.

Investing $1,000 over 7 Years — Illustration by Moneycessity

But investing isn’t about picking one hot stock. Companies rise and fall — look at Blockbuster. It was great for a while, but when it collapsed, investors who only bet on it lost everything. That’s why I don’t put all my eggs in one basket. Instead, I invest in index funds or ETFs. These funds pool money from lots of investors to buy shares in hundreds (or even thousands) of companies, spreading out the risk. It’s an easy way to invest in the entire U.S. economy — or even the global economy — and get reliable, average returns over time.

Index Fund and ETF— Illustration by Moneycessity

This isn’t about being flashy or finding the next meme stock. It’s about consistency. Small, steady investments can grow into something life-changing thanks to the power of compounding. It’s like building a Lego set piece by piece. And if you’re worried about starting too late, let me show you why that doesn’t matter.

3. The “When” of Investing

At what age does investing stop working? 

It really comes down to time and probabilities. 

Over the past century, the stock market has returned an average of 10% per year, but that doesn’t mean it’s predictable in the short term. If I’m investing for just one year, it’s a coin toss — the market could go up or down, and no one knows for sure. Over 3 years, it’s a little more likely to go up, but still risky. By the time we’re looking at 10 years, though, the odds are overwhelmingly in my favor. Historically, 9 out of 10 ten-year periods in the U.S. market have been positive.

S&P 500 Performance VS GAAP Earnings

So, how does this tie into age? 

It’s not so much about age as it is about how soon I’ll need the money. If I’m investing with a goal that’s 7 to 10 years away or more, I’m comfortable putting that money in the market. But if I need the money sooner — like right now my wife and I are planning for a baby — we save that money in a savings account. The stock market might go down in 2–3 years, and I couldn’t risk not having enough when the time came.

Even at 70 years old, if I came into some money and didn’t plan to use it for another 10 years, I’d still invest it. Why let it lose value sitting in a savings account when it could double in the market over that time?

The stock market rewards patience and long-term thinking. Once I understood that investing is about playing the long game, I stopped stressing over short-term dips. If you’re serious about building wealth, it’s all about time, strategy, and consistency.

If you’re serious about investing, there’s one more thing you need to know. I read and compiled 15 investing rules from the top 1% of investors and broke them down HERE.

Cheers!

I’ve been experimenting with different tools for the 10 years that I’ve been investing, and now I only use three. And I’ve learned that how I use the tool is just as important as the tool. Let me show you what I got.

Watch the extended version HERE.

The Idea Generator

The first step in investing — finding a solid thesis — can take a lot of time and effort. Sometimes I get lucky, and inspiration strikes, like noticing a great experience I had with a company. But most of the time, it’s a grind. 

Steve Jobs nailed this. The iPod? A mashup of iTunes, the iMac, and the portability of a Walkman. The iPhone? He added internet and a phone to the iPod. That kind of creative thinking is powerful, but it requires exposure to a ton of information. For me, that means a lot of reading, watching, and even lurking on places like Wall Street Bets. Sure, some ideas there are way out in left field, but every now and then, something sparks my own thoughts. Still, all of this takes time and brainpower.

ChatGPT has been a game-changer for me. It processes information thousands of times faster than I can and compares ideas instantly, creating new insights I’d never piece together on my own. It’s like having a genius assistant who works 24/7 for $20 a month. And there are specialized GPTs for different tasks — one for Excel, and another for financial analysis.

One way I use ChatGPT is by pulling a list of trending topics for the year, feeding them into the tool, and asking it to find intersections between these trends and real-world products or services. I’ll also have it identify publicly traded companies best positioned to capitalize on these trends. In seconds, I have a list of 10 or 20 companies to start researching.

This process takes brainstorming to another level. It’s not just about saving time — it’s about uncovering leads and opportunities I might never have found otherwise. And that’s just the beginning of what this tool can do.

The Research Hub

The next tool I use helps me cut through the noise. When I start with a list of 10 or 20 companies, I need to narrow it down to 2 to 3 worth diving into because I don’t have the time to research 20 companies every week. 

I used to rely on Seeking Alpha for this step. It’s solid — they’ve got financials going back 10 years and analyst ratings. But recently, I’ve found a better tool: StockanAlysis.com. It’s like an upgraded version of what I was already using, with more context and better features that make my research process smoother.

1. The first thing I love about Stock Analysis is how they present financials. Along with income statements, balance sheets, and cash flow, they include a ratios tab — saving me the hassle of calculating them myself. I can also download everything into Excel, which pairs seamlessly with ChatGPT for quick insights.

2. The second standout feature is how much context they give around analyst predictions. Stock Analysis doesn’t just show metrics like revenue growth or price projections; it also reveals how many analysts contributed and the range of their forecasts. This helps me gauge whether a company’s future is solid or uncertain, which is crucial for making informed decisions.

Using Stock Analysis and ChatGPT together, I can take a whole sector of companies and narrow it down to 2 or 3 strong contenders for a deeper dive. But narrowing it down isn’t the end of the process. I still need to answer two big questions: 

• Are any of these companies truly worth my money? 

• Is now the right time to buy? 

This is where my final tool comes in.

The Decision Maker

There’s one tool I keep coming back to because it’s flexible, powerful, and completely underrated: Excel. It’s not flashy or new, but the way I use it feels like a cheat code for analyzing companies. Sure, it takes time to build a spreadsheet for a specific type of analysis, but once it’s done, I can reuse it endlessly. It’s like setting up a system that saves me hours down the line.

If I’m focusing on just a few metrics, I can even use Excel’s web scraping functions. All I need to do is type in a stock ticker, and it pulls the data directly into my pre-built equations, ready to analyze.

One metric I rely on is free cash flow, but it’s not a one-size-fits-all number. Free cash flow needs to be adjusted depending on a company’s research and development costs or capital expenditures. Excel makes this simple — I can tweak the numbers to get a clearer picture. 

Excel pairs perfectly with tools like Stock Analysis and ChatGPT. I can bring in tons of data, use Excel-specialized ChatGPT to create charts and graphs, and have everything organized in minutes. And with ChatGPT, I can dig even deeper, like figuring out how much of a company’s capital spending goes toward growth versus maintenance.

The hardest part is setting up the spreadsheet, but it’s time well spent. It’s like making an investment: you put in the effort up front, and it keeps paying off. If you’re curious to see how I built my free cash flow analysis spreadsheet, check out this video HERE.

Cheers!

Most people only learn about compounding when it’s too late. 

If I started saving just $10 a day in high school, I’d have over $200K right now just from sticking to that alone. At 40, I’d have almost $0.5M. At 50, I’d have over $1M just from skipping my morning Starbucks or saving my weekly allowance in high school. 

It feels like a punch in the gut to think about what I’ve missed. 

Compounding is the only guaranteed way to turn a small amount of money into millions of dollars. Even Albert Einstein says that compound interest is the eighth wonder of the world, but just like the pyramids of Giza, it’s hard to appreciate them until you experience it for yourself. 

I’m going to answer:

1. Why compounding is a powerful tool even if you’re starting with small amounts of money?

2. Why it’s worth the wait?

3. How you can start building wealth no matter what your age is or your experience level?

Watch the extended version HERE.

The Weed Analogy

Earlier this year, I got a crash course in compounding from the most unexpected teacher: nutsedge in my backyard. 

Nutsedge is a tricky weed that spreads underground through little balls called nuts. These nuts multiply, creating more nuts and sprouting even more weeds. It was summer, it was hot, and I was done dealing with it. I figured, “No big deal — if I wait a few months, I’ll just have three or four times as many weeds.”

But what I didn’t factor in was compounding.

In reality, one nut makes another nut in a month. By month two, both of those nuts are making nuts, so now there are four. By month three, there are eight, and by month four, sixteen. I didn’t have three or four times the weeds — I had 16x the weeds. That’s the dark side of compounding.

Compounding — Illustration by author

It’s exactly how credit card debt works. Leave a small balance alone, and it doubles and doubles until it’s completely overwhelming. The longer you wait, the harder it is to get rid of. 

But compounding isn’t all bad. I’m tackling my nutsedge problem by planting Asian Jasmine, a ground cover that grows over time and eventually chokes out the weeds. That’s my “investing.” While the jasmine grows, I’m also staying on top of the nutsedge — pulling it out every chance I get, just like paying off debt before it spirals out of control.

Compounding is powerful, whether it’s working for you or against you. All it takes is one seed, the right conditions, and one more thing to grow into something massive.

The Power of Time

Critical mass is the tipping point in both investing and debt — where compounding takes full control.

For me, it’s like dealing with nutsedge. If I can pick 256 weeds a month, I’m fine. But once the nutsedge starts growing at 1,000 or 2,000 weeds a month, I’m overwhelmed. It’s out of my control. That’s critical mass, and no one wants to hit it with debt.

On the flip side, critical mass is exactly where you do want to be when it comes to investing. There are two big milestones for critical mass:

1st Milestone of Critical Mass — Illustration by author

1. My first big milestone is when the interest my portfolio earns beats how much I’m adding to it from my salary. If I’m contributing $1,000 a month to my portfolio, once compounding starts generating more than $1,000 a month on its own, things get a lot easier. 

2. The real magic happens when compounding generates more than I can spend — the second milestone. If my portfolio earns $50,000 a year and I’m only spending $40,000, I’ve reached financial independence. From there, compounding keeps accelerating, and my wealth grows faster than I can spend it.

2nd Milestone of Critical Mass — Illustration by author

The key ingredient to all of this is time. No matter how much money you invest, time is non-negotiable for reaching that first milestone where compounding really kicks in. It might take years, but once it happens, the process speeds up.

So, what if you didn’t start investing in high school? I didn’t either. Is it too late to take advantage of compounding? Not at all. There’s another variable in the compounding equation, and it can make all the difference.

The Magic of Consistency

There are two types of investors: Mike and Jake.

Jake started young — his parents made him invest his allowance in high school. He got a great head start, but by college, investing wasn’t on his radar anymore. He was more focused on enjoying life — going out, upgrading his lifestyle, and putting off investing. When he did invest, it was inconsistent. One year he’d put money in; the next, he’d skip because he wanted a nicer car or a better apartment. He never stuck to a plan or increased his investments as he earned more.

Mike, on the other hand, started much later at 30. He regretted not investing earlier, so he committed to fixing it. He put $1,000 into his investments every month without fail. And as he earned raises, he increased that amount to keep up with inflation. 

Time VS Consistency — Illustration by author

With this discipline, Mike is set to hit $1 million by age 50. Meanwhile, Jake, despite his early start, won’t reach the same milestone because he wasn’t consistent.

Starting early is powerful — it gives you a huge advantage. But without consistency, time alone won’t get you to financial independence.

Financial independence is about the freedom to live on your terms, not hoarding money. If financial independence is important to you, check out this video HERE.

Cheers!

Using AI to invest has been a huge game changer for me lately. Not only is researching companies faster and easier, but it has also improved the quality of my ideas. 

I went down this rabbit hole when I saw multiple study findings that ChatGPT is on par with professional financial analysts. I bought the premium version and have been tinkering with it for a few weeks, and I’m ready to show you all my step-by-step workflow. 

It’s not the only way to use AI and I’m sure I’ll continue to improve on it, but I’m excited to see what you think. 

Watch the extended version HERE.

Narrowing Down the List

In the past, AI in investing was pretty basic. It would scan financial reports, Q&A sessions, or earnings calls and count how many positive or negative words showed up. Based on this, it would spit out a sentiment score — positive words meant a good report, and negative words meant a bad one. Hedge funds loved this because they could react faster than the market. But let’s be real — it was like fishing in the dark.

Now, things are completely different. If there is a new hire that reads and processes text 2,000 times faster than a human, works 24/7, and costs me just $20 a month. What makes it unbeatable is its ability to memorize every financial document ever written, spot patterns, and predict how the market might react. No human could even dream of doing that.

Of course, I’m talking about LLMs which is the type of AI that ChatGPT is. Just for fun, I asked ChatGPT to explain what an LLM.

This AI isn’t just counting words anymore; it actually understands what those words mean in context. That’s a game-changer because investing boils down to two key things: 

• Being able to process massive amounts of information to narrow down your options: I can have the AI scan thousands of earnings reports and hand me only the most promising leads in minutes. It saves me hours of digging and gives me a serious edge over anyone who isn’t using AI.

• Getting that information faster than everyone else: Speed matters. If a stock is undervalued and the market catches on before I do, the opportunity is gone before I can act.

But this technology isn’t just about speed and filtering — it’s starting to handle tasks that we used to think only humans could do. Investing is becoming smarter, faster, and more efficient than ever, and I’m here for it.

Drawing Correlations and Themes

Steve Jobs was brilliant at creating revolutionary products, but even the iPod and iPhone were hybrids. The iPod came from combining the iMac, iTunes, and a Walkman. The iPhone? A mashup of an iPod, a phone, and an internet device. Humans are great at connecting ideas to create something new, and that same creativity applies to investing. We look for patterns, trust our instincts, and use past experiences to find opportunities.

The problem is, there’s only so much we can handle. With millions of ideas and thousands of companies out there, comparing everything to find the best investments is impossible for one person. That’s where AI comes in.

AI doesn’t rely on intuition. It works nonstop, comparing and analyzing data to uncover insights we’d never see. It’s like Steve Jobs on overdrive, cranking out creative solutions at a scale and speed humans can’t match.

Thematic Research

Take Ozempic, for example. AI identifies it as a hot trend, notes it’s a GLP-1 drug, and connects that to manufacturers who stand to gain. It even flags companies that might take a hit, like those in bariatric surgery, since fewer people might seek that option.

Thematic Research

And this isn’t just about spotting obvious headlines or reading public financial reports. AI can dig into layers of data — things I’d never have time to analyze — and surface connections that give me an edge. It’s like having an infinitely creative assistant who doesn’t sleep, doesn’t get tired, and constantly works to uncover opportunities I’d never find on my own. 

Alternative Investing Data

AI has opened the door to something called alternative data which includes things like satellite imagery, website traffic, mobile app usage, and geolocation data. What’s cool about this is that it gives AI insights into a company’s performance before the financial reports come out.

For example, if Costco starts losing customers and its parking lots aren’t as busy, an AI analyzing satellite imagery can pick up on that drop in traffic way before we see the hit in their quarterly revenue report. However, the human brain just can’t process the sheer amount of data needed to make alternative data useful. That’s why about 78% of big investing firms are either already using this data or planning to.

Alternative Data

Hedge funds and big investing firms with access to this kind of AI can act on those trends early — pulling their money out before the rest of us even know what’s happening. The edge this provides is huge. Speed matters, especially when companies only report financials every three months. Any early clue gives these firms a major advantage.

Now, while this level of AI isn’t something we everyday investors can tap into directly (yet), there are still ways to benefit from AI tools. I don’t always pick individual stocks but when I do, I make sure AI is part of the process like THIS.

Cheers!

More than half of Americans believe that younger people today will be worse off than their parents. 

Majority of Americans doubt young people will be better off than their parents, AP-NORC poll finds

Income is the biggest driver of financial success — it’s like the front wheel of a tricycle. You can still move forward if you lose one of the back wheels (saving or investing), but without that front wheel, you’re stuck. There are countless ways to earn income, but two key factors — both entirely within our control — make the biggest impact on how much we bring in.

So what does it take to surpass 99% of people?

Watch the extended version HERE.

Supply and Demand

We all understand the concept of supply and demand, but we tend to ignore it when choosing a career. Let’s break it down. 

Who are the lowest-paid players in the NFL? Is there a minimum salary in pro football?

Take an NFL player, where the average salary is $2 million a year. Sounds amazing, right? But to even sniff that paycheck, you’ve got to beat the odds. Out of over a million high school athletes, only about 2,000 make it to the NFL. That’s the top 1% of the top 10%. Your chances are one in a thousand.

NFL player job outlook — Illustration by author

Now, let’s shift to a more common career: real estate agents. There are over 2 million registered agents, but only about 540,000 are actively working. That means 75% of them find something else because the competition is intense. Even if you’re active, making six figures means you need to be in the top 3%. You’re essentially facing a similar uphill climb as an NFL player, just without the touchdowns.

Real estate agent job outlook — Illustration by author

Compare that to a career like an information security analyst. If you have a bachelor’s degree, this field has a 100% employment rate, and the median salary is $120,000 per year. That’s just for being average — not the top 3%, not the top 25%. And the top 10% in this field make $182,000 annually. It’s a straightforward path with far less competition and more stability.

Infosec Joblessness Remains Steady, at 0%

If college isn’t your thing, consider an apprenticeship-based job like an elevator technician. Median pay? $102,000 a year. Nearly 100% employment rate. And to make $120,000, you only need to be in the top 25%. It’s a much more reliable path to a great income.

Elevator Mechanic turnover and employment statistics

The BLS Occupation Finder is your best friend. This tool lets you filter for jobs by education level, salary range, and industry growth. If you want a job with just an associate’s degree, no extra training, and a high growth rate? Plug that in, and boom — options like dental hygienist pop up. The average salary is $87,500 with top earners making $120,000.

BLS Occupation Finder

For those locked into their current career and unable to pursue a degree or a major change, the approach is different. But the key takeaway here is to focus on jobs where demand is high, competition is low, and the path to a great income doesn’t require beating impossible odds. It’s all about choosing a career where the math works in your favor.

Location

The second factor that can massively influence your salary is where you live — and this is something you have complete control over. 

GDP Ranked by State

The U.S. economy is worth $25 trillion, but that wealth isn’t spread evenly across the country, or even within individual states. The same applies to salaries for different professions. A programmer in Wyoming won’t earn nearly as much as one in Silicon Valley, even with the same skills.

Annual Mean Wage of Information Security Analysts

Take an information security analyst. In West Virginia, the median income is $87,420. If you’re willing to move a few hours over to Virginia, your median salary jumps to $133,000. And it doesn’t stop there. You can get even more specific by looking at metropolitan versus non-metropolitan areas using tools like BLS.gov.

Annual Mean Wage of Information Security Analysts

Once you’ve maxed out your earning potential, it’s time to focus on the other parts of your financial journey — saving and investing. Just like a tricycle needs all its wheels, your income, savings, and investments all work together to drive your wealth forward.

And if you think investing is too scary, check out this video HERE, where I explain how even a monkey can be a successful investor. 

Cheers!

3 (Insane) NEW Ways to Invest Using ChatGPT

AI is revolutionizing investing in 2025, giving those who adapt an edge and leaving others behind — understanding why this matters could define your financial future.

Why Man + Machine Adds Up to Better Stock Picks

I went down the rabbit hole after I saw an article found that ChatGPT is on par with professional financial analysts. And it’s only going to get smarter so I’m on a mission to get ahead of the curve.

I bought the premium version and have been experimenting with it for a few weeks now, and I’ve come up with some tools that accelerate and improve my process for finding strong companies to invest in. 

There are 3 ways that I’m using AI to invest this year.

Watch the extended version HERE.

1. Brainstorming Investment Ideas

Hedge funds like Vanguard and BlackRock are leveraging AI, especially Large Language Models (LLMs), to analyze massive amounts of data for investing. LLMs specialize in understanding written language by learning patterns from huge datasets. Think of them as hyper-specialized assistants trained for different tasks. Some firms use AI to identify market trends and opportunities, giving them a major edge.

For everyday investors, ChatGPT is like having that same kind of assistant — but it’s affordable. It’s insanely fast, running on a supercomputer with enough power to drive a Tesla around the Earth 26 times a year. At just $20/month, you’re getting a tool that can brainstorm and analyze data faster than any human.

Here’s how I use it: when researching growth companies, I start with trending topics in the U.S. and then paste a list of trends into ChatGPT and ask it to identify common themes and the companies best positioned to benefit. Within a minute, I get categorized insights — AI companies, health tech, renewable energy, and more — along with investing implications. It’s not a final decision, just a starting point for deeper research.

For value companies, I use stock screeners to narrow the list. My favorite is StockAnalysis.com. A value company has a low share price compared to its profits, like finding a great deal at the store. But not every deal is worth it — some companies are struggling for good reasons. That’s where ChatGPT helps. I ask it to analyze the qualitative aspects behind the numbers: is the sector strong? Are there risks the screener can’t detect?

When screening consumer discretionary companies (luxury goods, entertainment), I filter for those with over $1B market caps, solid revenue growth, and strong free cash flow. ChatGPT helps me figure out which of the shortlisted companies are financially solid and positioned to thrive. 

Combining tools like screeners and ChatGPT makes the research process smarter and faster, especially for spotting both trends and bargains.

2. Screening for Value Companies

Here’s where my second AI tool comes in handy — Stock Analysis GPT. 

It’s tailored for analyzing financial data, which is perfect when I have a list of 5–6 companies from my stock screener. Instead of wasting hours digging through financial reports, I use this tool to quickly rank these companies based on financial health.

I take the stock tickers, feed them into Stock Analysis GPT, and ask it to rank the companies based on growth potential. Within minutes, I get a ranked list of Marriott and Airbnb at the top and Everi Holdings and Winnebago at the bottom. 

This process lets me cut the weakest options without diving deep into all six companies. It saves so much time, letting me focus only on the most promising investments.

When I’ve narrowed it down to a couple of companies, I like to go all-in by diving into their financials, putting data into Excel, and creating detailed charts to visualize their performance. It’s a time commitment, but by the time I get here, I’m only analyzing the best of the best.

3. Company Intrinsic Value Analysis

This is where my third AI tool steps in — Excel ChatGPT. I like it for digging into financial data without getting overwhelmed. 

Here’s how I use it: When I want to analyze Marriott’s financials, I start by heading to StockAnalysis.com and grabbing their financial data from the past 10 years by using bulk download.

After uploading the data, I asked it to plot Marriott’s free cash flow for the last five years, fit a trendline, and calculate the average annualized growth rate using the endpoints of that trendline. This might sound complicated, and most people wouldn’t even attempt it. ChatGPT Excel handles it in under a minute. The result? Marriott’s free cash flow has been growing by an impressive 30% per year over the past five years.

It gets even better — I can use the same process to analyze Airbnb or any other company and even create side-by-side comparisons for key metrics. Whether it’s profit, revenue growth, or cash flow, this tool simplifies everything.

It might seem like a lot of moving parts, but this setup pulls everything together. From spotting trends to narrowing down companies to diving deep into financials, these tools work seamlessly to save time and deliver actionable insights.

If you want to see me run through my actual process using AI from ideating to picking a company to invest in, check out this video HERE. 

Cheers!

Investing has become too… fun. 

Gamification is costing new investors in ways that they don’t even realize. 

Watch the extended version HERE.

What Makes Robinhood Different?

Investing used to be complicated. Platforms like Vanguard and TD Ameritrade were packed with charts, jargon, and so much information it felt overwhelming. It slowed people down but forced them to learn before making decisions, which helped avoid mistakes.

Robinhood changed everything. The app is simple and flashy, showing just the ticker, a red or green line, and the price. No fees mean investing small amounts feels practical — back in the day, a $15 fee on a $100 trade instantly wiped out 15%. Robinhood also offers instant trading with no waiting, plus free stocks if you invite friends. It’s fast, fun, and frictionless.

Robinhood App Screenshot

But this ease has downsides. No fees remove a key roadblock, making it easy to overtrade, which often leads to losses. Frequent trading is bad for three reasons:

1. Capital Gains — Profitable trades get hit with taxes.

2. Hidden Costs — No upfront fees, but Robinhood makes money through payment for order flow. They send your trades to market makers who pay them, but these deals might not get you the best price.

3. Less Thoughtful Decisions — No fees mean less hesitation. Before, a $15 fee stopped impulsive trades. Now, you can buy, sell, and buy again without much thought, but that can hurt your portfolio over time.

Robinhood profits when you trade more, so the app is built to encourage constant transactions. It’s fast and fun, but investing is about patience and smart decisions, not impulsive moves.

How Does Robinhood Make Money?

Every time you trade on Robinhood, your order goes to a market maker, not Robinhood itself. Market makers handle the trades, make money from them, and pay Robinhood a rebate for sending business their way.

Market makers act as middlemen. They take large orders and break them into smaller ones or combine small orders into larger trades. Their job is to ensure buyers and sellers can trade instantly by providing liquidity — keeping the market moving.

Market Maker Illustration by author

Market makers get paid through the bid-ask spread. If a stock is worth $100, they might sell it to you for $100.01 or buy it from you for $99.99. That tiny 2-cent difference is their profit. Riskier, more volatile stocks often have bigger spreads because they’re harder to trade, which means market makers earn more.

Bid-Ask Spread Illustration by author

Robinhood profits from this system through rebates. The more trades you make — and especially if you trade risky stocks with larger spreads — the more money market makers and Robinhood make. This setup encourages frequent trading, which can cost you more in the long run.

It’s not just apps like Robinhood affecting new investors — pandemic-era investing culture has added fuel to the fire. During lockdowns, people had extra cash from saving on activities and stimulus checks. With money burning a hole in their accounts, many turned to online investing communities like Reddit’s Wall Street Bets.

Wallstreet Bets Screenshot

Wall Street Bets is a total circus. Memes everywhere, wild stories of people striking it rich or losing everything — it’s emotional, unpredictable, and honestly pretty addictive. Compare that to something like Bogleheads, which feels like a boring lecture with a ton of links and no fun.

Boggleheads Screenshot

The problem? Wall Street Bets makes high-risk trading look like gambling, turning investing into a game instead of a smart, long-term plan. It’s fun to watch, but if you follow the hype, it could cost you big.

Why You Should Be Boring?

Investing has turned into a game for a lot of people, and in a culture where it’s treated like sports betting, staying responsible with your money can feel boring. But boring is often the smartest move.

According to The Intelligent Investor — a classic loved by legends like Warren Buffett — you should either go all-in on research or keep it completely passive. Anything in the middle is a losing strategy.

Investor Continuum Illustration by author

If you don’t want to spend hours studying companies, you’re better off sticking to passive index funds or ETFs. They’re low effort and statistically deliver solid results. If you do want to beat the market, active investing takes serious work — digging into income statements, balance sheets, cash flows, and understanding a company’s future, competition, and economic environment. It’s not flashy, but it’s how you win.

To save me some time, I made an automated spreadsheet tool that helps me calculate the intrinsic value of a company. Check it out HERE.

Catch you on the flip side.

AI is taking over investing. 

I think most people probably expected this to happen myself included. But my mind was still blown after going down the rabbit hole reading all the articles from investing firms like BlackRock and Vanguard, the advantages that they get from AI are intimidating. 

At the same time, I’m also hopeful because I think I’m onto something.

Watch the extended version HERE.

From 100 to 15

Sometimes I come across a company that makes me say, “Wow, this is awesome!” But before I invest, I need to figure out if it’s really worth it. 

To do that, I run something called a discounted future free cash flow analysis (fancy words for checking if a company will make enough money in the future). Since this takes a lot of time, I only do it for companies I think are really promising.

Here’s how I narrow things down:

Step 1: Find Trends

1. Look for What’s Popular:

• I go to a website called Exploding Topics.

• It shows me 100 things that are trending and might stay popular for a long time, not just for a week.

2. Use ChatGPT to Spot Patterns:

• I copy the list into ChatGPT and ask:
  “What are the common themes, and what could these trends mean for new products, services, and investments?”

• ChatGPT finds themes like: Technology, Social media, Health, Environmental awareness

Step 2: Focus on What Interests Me

1. Zoom In on AI and Health:

• I ask ChatGPT, “What are the trending products combining AI and health?”

• Example: UltraHuman: A health app using AI and wearable devices to monitor fitness.

2. Find Companies in This Space:

• Next, I ask ChatGPT: “Which publicly traded companies make wearable health tech?”

• It gives me a list of 20 companies.

Step 3: Clean Up the List

Remove Duplicates and Check Availability:

• Some companies, like Garmin and Google, showed up twice.

• I also skip companies I can’t buy in the U.S., like Samsung.

• Final list: 15 companies.

From 15 to 3

Here’s how I use the next tool to pick the strongest companies to invest in:

Step 4: Use a Stock Analysis Tool

1. Find the Right GPT:

• I use a tool called Stock Analysis GPT that can read company financials (like earnings and cash flow reports).

• This tool already knows a lot about companies, so I don’t need to download all the data myself.

2. Rank the Companies:

• I take my list of 15 companies and paste their stock tickers into the tool.

• It ranks them by financial health, showing me which companies are the strongest.

Step 5: Narrow Down the List

1. Top Companies:

• The tool gives me the best companies: Google (Alphabet), Apple, and Garmin are top ranking

2. Focus on Free Cash Flow:

• Instead of just looking at earnings, I check free cash flow. Free cash flow is the money a company has after paying for everything it needs, like bills and upgrades.

• Companies can use this money to: pay off debt, expand their business, and pay dividends to investors

3. Compare Growth and Price:

• I look at: how much their free cash flow has grown over time, and how cheap their stock is compared to their free cash flow.

Step 6: Use StockAnalysis.com

1. Find Free Cash Flow Data:

• I go to StockAnalysis.com to check the free cash flow of these companies.

• Example: Google’s free cash flow in 2018 was $22.8 billion and in 2023 was $69.5 billion. That’s a huge increase!

2. Download the Data:

• I download all the company’s financial info into an Excel file.

• This file includes important details: income (how much they make), cash flow (how much money they actually keep), and ratios (helpful numbers for comparing companies).

From 3 to 1

Let me show you how I use ChatGPT and some cool tools to figure out which company is the best to invest in.

Step 7: Upload Financial Data

1. Use ChatGPT’s Excel AI Tool:

• I found a tool in ChatGPT called Excel AI.

• Always turn on data analysis mode. Without it, the tool can mess up!

2. Make a Chart:

• I asked ChatGPT to: “Plot Google’s free cash flow (the money left after expenses) for the last 5 years. Draw a line of best fit to show how Google’s cash flow is growing. Calculate the Compound Annual Growth Rate (CAGR) or how fast the cash flow is increasing each year.”

• Why Use a Line of Best Fit? Company cash flow can go up and down a lot each year. A line of best fit smooths it out, showing the overall trend.

Step 8: Analyze the Results

1. Google’s Results:

• From 2019 to 2023, Google’s cash flow grew about 22.39% per year.

• That’s amazing compared to the average 10% yearly return of the S&P 500 (a big group of top U.S. stocks).

2. Compare Other Companies:

• I uploaded data for Apple and Garmin and did the same analysis.

• Results: Garmin has 19.45% growth and Apple has 14.03% growth.

Step 9: Look at Price vs. Cash Flow

Compare the Price:

• I checked how “cheap” the companies are by comparing their stock prices to their free cash flow with the prompt: “Make a chart for all three companies showing the price to free cash flow ratio over the last five years”.

• Garmin turned out to be the cheapest option in 2023.

Step 10: The Final Pick

Here’s the breakdown:

• Past Performance: Google grew its free cash flow the most.

• Price: Garmin is the best value for its cash flow.

• Financial Health: Garmin is stable, but Google is stronger overall.

Sometimes, I don’t need to compare companies or follow trends. If I already have a company in mind, I use a tool called the discounted free cash flow model to check if it’s a good time to invest.

If that’s the case, the best tool for the job is the discounted free cash flow model. I have a video on how to use it HERE.

Cheers!

The average investor is missing out on 50% greater gains, not because of technical abilities or knowledge, but because of psychology. There are 9 tricks our minds play on us that cause us to screw up our investments.

Watch the extended version HERE.

1. Mental Accounting

If you are at the casino and you brought $100 as your bankroll for the trip — if you lose that cash you are done gambling. 

The first game you hit is a cheap slot machine and you get lucky with a $100 gain. Now you are up to $200.

Mental accounting is where you view the $100 profit as fundamentally different than the original $100 that you brought. You might make riskier bets with the profit than your original $100 because you are playing with “house money”. 

Mental Account — Illustration by author

In reality, these two benjamins are identical and should be treated as such. Mental accounting causes investors to make irrational investments into overly or underly risky positions. It works both ways. 

2. Loss Aversion

When the stock market starts to drop, panic selling begins. Even though the best times to invest throughout history are during market crashes, our instincts take over. Humans naturally fear losing more than we desire for an equivalent gain. 

Loss Aversion — Illustration by author

I will never forget the time I lost a $100 Christmas bonus that I received in a paycheck. I was stoked to find there. It was a complete surprise. But the joy was nowhere close to the agony I felt when I reached into my pocket where I left it to find nothing. The pain was 100 times the joy. 

This graph shows investor behavior during the stock market crashes of 2000 and 2008. The red line is the S&P 500 stock price and the blue line is the amount of cash pulled out of the market. 

Cash VS Stock Holdings

Notice the absolute peak of the blue line is right at the absolute lowest point of the red line. It should be the opposite! 

The very bottom is the best time to buy but investors just cannot bring themselves to do it because of loss aversion. 

3. Narrow Framing

I love steak. When I buy my groceries for the week, you can find me drooling over the wagyu. If I could afford it, I would be tempted to buy nothing but A5 Wagyu. 

But, this would be narrow framing. I might love A5 wagyu steak, but in the context of my diet, it would not be a good idea. Steak all day every day would end up not tasting good in the end anyway.

The same is true for investing. My favorite thing to do is analyze individual stocks that are high-risk and high-reward. But my portfolio can not survive with that allocation. 

I need to have some cash for emergencies, some index funds in my 401k, and some fixed income down the road. Even though individual stocks are my favorite, I have to widen my frame of reference to avoid focusing on just one area of my portfolio.

4. Diversification

Just because you are invested in many different assets does not mean that you are properly diversified. Lumping together many super-risky investments does not necessarily reduce your risk. 

This is exactly what went wrong in the financial crisis of 2008. Improper diversification sets investors up for crushing losses. 

2008 Housing Bubble Crash

5. Anchoring

I have been guilty of this psychological bias. When I buy a stock, I give the purchase price too much power. I hate to sell that stock unless it is at least the same price that I bought it. 

However, the purchase price has no relevance to whether or not an investment is currently at a good price. When other investors are deciding whether or not to buy my shares of stock, they will consider:

• The profitability of the company

• The quality of the product

• The economy as a whole

But you know what they are not thinking about? My purchase price. My purchase price is irrelevant to whether or not I should sell that stock.

Anchoring — Illustration by author

For instance, if I bought a house for $250K and the next day a waste processing plant is built next door, that would suck. Of course, I would want to sell my house for $250K so I don’t lose money but that would be incredibly unlikely. If I reject an offer for $230K, I will have fallen prey to anchoring — making a financial decision based on an irrelevant data point. 

6. Media Response

The media is incentivized to hold our attention. The stories that are the most sensational will naturally rise to the top. Another year of typical stock market returns is not a sensational story, but it is the most likely. 

50 Years of S&P500 Returns

This graph shows the returns in the S&P 500 over a 50-year period going back to 1970. There are only 11 years with negative returns. 

Therefore, most media coverage about projected stock market performance will be unlikely. Investors with a strong media response will be pulling money out of the market too often, resulting in lower returns. 

If I am being swayed by the countless TikTok influencers talking about a market crash, I will be pulling my money out of the market too often. And I will miss out on the 39 out of 50 years of positive market gains!

7. Regret

Today, this is better described as FOMO — fear of missing out. 

At the most basic level, there are two types of mistakes: active and passive.

• Active is where you actively make a bad decision

• Passive is where you don’t do anything and miss the chance to make a really good decision

Types of Mistakes — Illustration by author

Investors who experience FOMO are being pushed into making an active mistake because they are trying to avoid a passive mistake — even though active mistakes are much more costly. 

Falling for the regret principle often has investors staying in an investment too long or continuing to funnel more money in because they do not want to regret missing out on the recovery. 

8. Herding

As mammals, we have an evolutionary reaction to run with the herd. In the jungle, if you see ten people running for their lives, you better run too. 

In this case, the passive error is much more costly. 

If you don’t run and those ten people are running from a lion, the downside is you die. If you do run and those ten people were running from a squirrel because they heard a noise coming from a bush, the downside is you got some exercise. 

Herding mentality works for the jungle but we did not evolve to have the best investing practices. 

With investing, running out of the stock market does have a cost—opportunity cost. Following the herd out of the market or into overpriced stocks will hurt our investing returns. 

9. Optimism

When I am on vacation and renting a car, the rental place always tries to get me to buy insurance. But I know I am a good driver so I never pay for it. Nothing is going to happen, the trip is just a week long. 

Optimision — Illustration by author

In this scenario, I am being overly optimistic. I may be a good driver but there will be a thousand other cars on the road and I will be in an unfamiliar place! The external risks out of my control do not disappear just because I am involved. 

If you have already been hit by one of these biases and you’re sitting on a stock loss, do not fear. There is a way to get out and get something out of it. I shared my best practices for exiting a bad stock position HERE.

Catch you on the flip side. 

I read up on hundreds of pages of tax proposals to attempt to answer these questions for myself after Trump won the 2024 presidency:

1. What income levels are paying less in taxes?

2. Are any income levels actually paying more in taxes?

3. What are the new tax policies in 2025?

4. What’s the actual dollar difference that we’re going to experience?

Watch the extended version HERE.

Tax Changes (Cuts)

Trump wants to make some big changes to the tax rules in 2025, so here’s what’s going on:

1. Getting Rid of the SALT Cap
   Right now, you can only deduct up to $10,000 of state and local taxes to lower your federal taxes. Trump wants to remove this limit. But most people don’t have that much in state and local taxes, and you’d have to use “itemized deductions” instead of the “standard deduction” (the easier and more profitable option most people use).

2. Bonus Depreciation
   Businesses can save money on taxes by writing off depreciation on things like equipment or tools they buy. Trump wants them to be able to write off everything all at once instead of spreading it out over the years. This helps businesses save faster.

3. Research and Development
   Normally, businesses have to spread out (amortize) the cost of research over five years. Trump wants them to be able to write off these costs upfront. This helps businesses get money back sooner.

4. Domestic Production Deduction
   Trump wants to lower taxes for companies that make things in the U.S., cutting their tax rate from 28.5% to 15%. This is great for businesses making stuff domestically.

5. New Tax Breaks
   No taxes on tips. No taxes on overtime pay. No taxes on Social Security benefits (money older people get when they retire).

6. Tax Deduction for Car Loans
   If you have a car loan, you could get a tax break. But this only works if you itemize deductions (not common for most people).

7. Family Caregiver Credit
   If you take care of a loved one, like an elderly parent, you might get a tax credit. This could really help caregivers.

Returns by Type of Deducgtion

In short:

• Businesses win big from bonus depreciation, research deductions, and lower corporate taxes.

• Higher-income people benefit most from getting rid of the SALT cap and itemized deductions.

• Older people or those with specific situations (like car loans or caregiving) might get some help too.

Distribution of Returns Claiming Itemized Deductions

All of these tax cuts are great, but:

• Is it too good to be true?

• How will the government pay for all these tax cuts?

• If they’re collecting less tax money, will it hurt something else like public programs?

Tax Changes (Adds)

Trump wants to add taxes, called tariffs, on stuff coming into the U.S. from other countries. Here’s what he’s planning:

• 20% tariff on goods from all countries.

• 60% tariff on goods from China.

• 200% tariff on some cars, especially electric vehicles (EVs).

A tariff is a tax on imported goods. But it’s not the country (like Mexico or China) paying the tax — it’s the company importing the goods. And guess what? Those companies pass the extra cost on to you, the buyer.

For example:

• Most avocados are imported from Mexico. If there’s a 20% tariff, Walmart and Costco will pay the tax but then charge you 20% more to keep their profit.

• This happens with all imported items: cars, electronics, clothes, and groceries. Everything will cost more.

Trump’s Proposed Tariffs Projected to Have a Negative Impact For All Income Groups

Tariffs hit low-income families the hardest because they spend a bigger chunk of their money on everyday goods.

• The bottom 20% of earners could lose 4% of their after-tax income because of higher prices.

• The top 1% lose less than 1% because they own and invest in companies that raise prices to protect profits.

If you pair Trump’s tax cuts with these tariffs:

• High-income people (like business owners) might still come out ahead because of their tax breaks.

• Low- and middle-income people are more likely to lose money because rising prices cancel out any tax savings.

In short, tariffs make imported goods more expensive, and the people with less money feel the impact the most.

Taking the upsides of the tax cuts on one hand and the downsides of the tariffs on the other:

• Who’s going to be a net benefiter?

• Who’s going to be a net loser from these two policies?

Tax Implications

There are two ways to look at how Trump’s policies affect people: income levels and specific groups/professions.

1. Income Levels

• Short-term: Everyone loses more from tariffs than they gain from tax cuts. Lowest incomes (bottom 20%) lose the most: 2.6% of after-tax income. Upper-middle incomes (80–90%) lose the least.

• Long-term: Most income groups see some benefit, but the bottom 40% still lose out. Lower incomes feel the impact of tariffs the most.

Percentage Change in After-tax Income Under Trump’s Tax and Tariff Proposals

2. Specific Groups/Professions

• Family Caregivers: If you qualify for a family care credit, you could get up to $5,000. For someone making $50,000, that’s a 10% income boost, more than covering the tariff costs.

• Social Security Recipients: If you make less than $35,000, there is no tax benefit (you’re already not taxed on Social Security). Between $35,000–$60,000, most get less than $100. Those earning more than $65,000 will get the biggest boost.

• Service Workers (Tips): If tips are tax-free, someone making $60,000 (half in tips) could save $7,000 in taxes yearly — huge (assuming you paid taxes on tips before)

• Overtime Workers: The more overtime you work, the more you save.

• Businesses: Companies win big with tax breaks on research, equipment, and production.

• High Earners (SALT Cap Removal): Removing the SALT cap helps people with high state/local taxes who can itemize — mostly upper-income earners.

Effects of Excluding Social Security Benefits From Taxation

If you’re in these groups, you might keep more money. But how should you invest it? The investing game is changing with Trump as president.

HERE is how I’m planning to invest in 2025.

Catch you on the flip side.

There are 6 common myths inexperienced investors believe that either stop them from getting started or make them want to quit.

On the go? Watch the video HERE.

1. Stock Price is so Low it Can’t Drop More

The first and most damaging myth is that a stock that already dropped nearly to zero can’t drop that much more. It seems counterintuitive but it can drop WAY more. 

List of Stock Splits by Date

Here is a list of stock splits since the beginning of 2024. One example of a recent stock split is Nvidia. In June 2024, Nvidia’s stock price exceeded $1,000 per share. 

Paying $1,000 for a single share is pretty cost prohibitive so they did a 10 for 1 split. Each $1,000 share was split into ten smaller shares worth $100 each. Everyone still had the same amount of money. This is a forward split. 

Forward Stock Split — Illustration by author

When you look at this list, you will notice that the vast majority are reverse stock splits. A reverse stock split happens when the share price drops too low. The company takes ten of your $100 shares and combines them into one $1,000 share. 

Reverse Stock Split — Illustration by author

Don’t be fooled into buying a stock that dropped from $10 to $1 thinking that it is already at the bottom and cannot drop any lower.

A reverse stock split can send it back up to $10 but you didn’t make any money. The stock price can fall from $10 per share back down to $1 again except you have a tenth of your original shares. And you just lost 90%. 

It is much more useful to think in terms of percentages. No matter what the share price is, it can always drop by 100% (aka. bankruptcy) which means you lose everything you put in. 

2. The Stock Market is Very Risky

Many investors avoid the stock market altogether because they think that the stock market is too risky. 

Yes, the markets do carry some risk. But not investing in the stock market also carries a significant risk!

In times of significant inflation, the cost of goods has gone up by more than 10% in a single year many times. Even bonds, certificates of deposits (CDs), and high-yield savings accounts cannot keep up with hyperinflation. 

US Inflation Rates by Year

The stock market can though. The cost of goods increases and the companies selling those goods make more money. Many sectors of the stock market are protected from inflation in this way. 

After COVID, I noticed most fast food restaurants have literally doubled their prices. I wasn’t happy when Chipotle’s prices went up, but I kept going because the prices went up everywhere.

When we look at Chipotle’s stock price right before COVID, they’re sitting at about $18 a share. Since then, they’ve reached a high of almost $65 per share. This is a perfect example of how a store can increase the cost of their goods and make additional profit when inflation is high.

Not investing at all will only guarantee that you lose money to inflation. 

3. I’m Too Old / Too Young to Start Investing

First of all, you can never be too young. Investing only gets better the earlier you start doing it. 

Since stock market returns are compounding, time is your best friend.

Compounding Interest Explained

As far as being too old to invest, that is possible but incredibly rare. 

Unless your life expectancy is less than 5 or 10 years, you are much more likely to benefit from the stock market. Historically speaking, if you are invested for at least 5 years, 90% of the time you would make money.

Unless I only had a few years left to live, age is not a good reason to stay out of the market.

4. Investing is too Complicated

I can see where this sentiment is coming from. 

Ten years ago, I didn’t know the first thing about investing besides buying low and selling high. I assumed I needed to be a sophisticated financial analyst or something. 

However, I have since learned that investing is only as complicated as I want to make it. We can get better results by putting in time, energy, training, and education. 

“Working out” for an Olympic athlete or professional bodybuilder is probably very complex. That doesn't mean I can’t perform a simple workout and enjoy huge benefits. Just working out 15 minutes can do wonders for my physical and mental health.

The same goes for investing. 

If I simply put a small amount of money in a diversified index fund every week and never look at it until I retire, I will be way better off than if I did nothing at all. 

5. Investing is too Time Consuming

The same working-out metaphor applies here. 

While bodybuilders work out three times a day with perfect nutrition and steroids, I can still work out 15 minutes every day for great results. 

When it comes to investing, I need even less time than that to invest and perform above average. 

Maybe the first day, I would spend 15–30 minutes setting up my checking account to send money to my brokerage account automatically and for my brokerage account to automatically invest into an index fund. After that first day, I’m done! 

Imagine working out for 15 minutes but your muscles continue to grow forever even though you never work out again. That is how easy it is to invest which will be better than average! 

Average Investor Returns VS Everything Else

The average investor actually gets worse returns than a passive index fund. Over the 20 years in this study, the average investor only got an average return of 2.1%. During the same time, people who simply held an S&P 500 index fund made over 8% per year. 

This huge discrepancy is because investors are buying and selling too frequently and at the worst times. The average investors tend to buy when prices are high and sell when prices drop.

6. What Goes Up Must Come Down

Stock prices do not abide by the laws of physics. 

Unfortunately, humans still have an intuition that stock prices have inertia. This feeling of inertia causes us to get out of a stock when it’s falling because it feels like the stock will keep dropping. 

Once there’s a trend that is clearly and significantly down, the damage is already done and an investor won’t buy back in until they see a clear and significant trend upward.

S&P 500 Performance Over the Last 50 Years

And then of course, by that time, the stock price is already higher than when they sold. We have a classic case of buying high and selling low — breaking the number one rule of investing.

Investing is not physics. A stock that is down may never recover and a stock that rapidly appreciates may never return to previous prices. 

Market forces are much more complicated than the force of gravity.

So What Now?

Even if you avoid all the fatal myths, everyone eventually makes mistakes. 

We all buy a stock that drops in value at some point. There is a bonus fatal myth which is as long as you keep holding, you haven’t lost money. 

Unfortunately, holding too long can be very costly. But fortunately, there is a way to get out of a bad stock purchase and still get something out of it. 

Click HERE where I share the best way to exit a losing position. 

Catch you on the flip side.

Many people out there think that the stock market is a Ponzi scheme. 

There are some compelling reasons to think this is true, but I’ve always just assumed that they wouldn’t stand up to scrutiny at all if I were to dig into these arguments. 

So I decided to finally give the devil its due and drill down onto some of the top arguments for why the stock market is a Ponzi scheme, and I think I found some interesting stuff.

On the go? Watch the video HERE.

What is a Ponzi Scheme?

Michael Scott was tricked into entering a Ponzi scheme, and Phil, the owner of this company, clearly doesn’t make a profit because Michael and the other investors are not being paid by company profits. They are dependent on bringing in new investors for them to make any money at all.

The Office’s Ponzi Scheme — Illustration by Author

According to the government, a Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors with little or no legitimate earnings. 

A Ponzi scheme will fall apart whenever the existing owners fail to bring in enough new investors to pay for the returns of their existing investors. 

Illustration by author

Roughly half of these companies do not pay a dividend. 

If we’re looking at just the non-dividend half of the stock market, maybe this does seem a little bit like a Ponzi scheme because whenever you buy into a company that does not pay a dividend, the only way you’re making money is if you’re able to sell to a new investor.

Basically, your profits are dependent on new investors coming in with more money than what you did.

Ponzi Scheme — Illustration by author

In reality, dividend-paying companies pay shareholders with the company’s profits, while Ponzi schemes only pay existing investors with money received from new investors.

So what are investors actually getting when they’re buying shares of stock?

Comparing Ponzi Schemes to the Stock Market

It turns out there is one key difference between owning shares of a publicly traded company and being in a Ponzi scheme.

With the Ponzi scheme, as an investor on the bottom rung of the pyramid, you only have power in one direction by bringing in new investors. 

On the other hand, if you own shares in a publicly traded company, you can not only sell your shares for more than what you bought them for which is the downward control, but also have voting rights, which go up the chain.

Publically traded company — Illustration by author

You can vote on:

• Board of directors who can hire and fire key positions like the CEO 

• Implementing, raising, or lowering a dividend

• Mergers and acquisitions

There is a lot of power that you have as the shareholder in a publicly traded company over the fate of that company.

So you’re not just in this side game of trading shares for more or less money. You also have access to a real and profitable business. Even though you’re not getting access to those profits in the form of a dividend, you do have control over a profitable business.

But, not all companies issue fair and equal voting rights with their stocks.

Publically traded company with unequal voting shares— Illustration by author

If the guy at the top is getting 10 votes per share and you at the bottom are only getting 1 vote per share which effectively eliminates all the control that you thought you were getting by owning a share of stock.

If we go back to the pie chart, half of those companies didn’t pay dividends but 7% of those non-paying companies issued unequal voting shares. 

What am I actually getting when I own one of those shares because it seems like I’m not getting a cut of the company’s profits in the form of a dividend, and I’m not getting any control over this profitable company?

Illustration by author

When I own a house, I’m reliant on being able to sell that house to a new investor for more money if I want to profit. But if I’m not able to sell the house, at least I still have a house. I have something there.

When I own the stock, is it just an arbitrary, meaningless piece of paper? It’s not even a piece of paper anymore. Is it just ones and zeros in the cloud?

To answer that question, I think I have to get back into the nuts and bolts of what happens when a company goes public and starts issuing shares.

How Do Business Owners Make Money

When someone starts a business, they do so to make money. And there are four ways that a business owner will typically make money.

How businesses make money — Illustration by author

1. The first and most common is through a salary. However, business owners typically want to minimize the salary compared to the other sources of making money because taxes are much worse for the salary.

2. The second way is through the company’s profits. The owner can access that stack of cash every year by getting paid a dividend which has a much better tax rate. But in this case, I’m going to assume that this company is not paying a dividend. They are reinvesting that profit every year back into the company to grow the value of the company.

3. The other ways the owners of a company get paid are through the value of that company. The only way for the owner to access the stack of cash is by either selling the whole company OR

4. Selling little pieces of the company by going public. When this happens, the company’s value is divided up into millions of shares. The owner keeps his portion of the shares and then sells the rest to the public.

Twitter confirms completion of Elon Musk’s $44 billion acquisition deal

Now, even if the public has no voting power, they are still entitled to their portion of any future dividends that the owner decides to pay. Even if the owner’s not paying any dividends right now and they’re putting all of that value back into the company, the shareholders are entitled to their portion of the company’s value if the company were to sell out one day.

This was illustrated perfectly when Elon purchased Twitter for $44 billion. At the time of the sale, the owners of the company only owned 2.5% of Twitter. The general public owned 17.7% and institutions actually owned 80% of Twitter. So the owners had already sold out along the way. And when Elon Musk came along and paid $44 billion for Twitter, way more of that cash actually went to the shareholders than went to the owners.

So in the event of a sellout, it doesn’t really matter if you don’t have voting rights. But what if a company never issues a dividend and never sells?

Some Companies Will Never Sell?

So let’s revisit our pie chart where we eliminated half of the companies that pay a dividend to the remaining companies and 7% of those do not give a fair and equal voting share to stockholders. And then of that 7% of that tiny percentage, maybe there are some companies that never pay a dividend, never sell out, and just dwindle and die eventually. 

I think those companies would be better described as just “bad investments”, and it’s much easier to deal with bad investments than it is to visualize the entire stock market as a giant Ponzi scheme.

Illustration by author

Fortunately for us, with publicly traded companies, all of the financial information is out there. We can look and see what are their profits and what is their free cash flow.

And I do this HERE where I analyze publicly traded companies to see if they’re a good investment. Check it out.

Catch you on the flip side.

Peter Lynch talks big about Di-WORST-ification, but he has one phrase in there that was doing the heavy lifting: “IF I could find one great stock.”

That’s the trick, isn’t it? 

Peter Lynch is saying a lack of diversification is a privilege. Don’t think you can just forgo index funds without the FINDING. 

I am left with more questions after hearing Peter’s words of wisdom. Luckily for me, he goes on to explain how the common man, like myself, might FIND one great stock.

On the go? Watch the video HERE.

#1 Investor Peter Lynch’s Investing Advice No One Wants to Hear

Do I Really Need to Diversify?

Peter Lynch doesn’t start with one stock, he starts with several “top” stories. He says “ten” but the exact number isn’t important. The number of compelling stocks you find will depend on how much time you have to research companies. 

But isn’t buying ten companies diversifying? 

While I do agree that buying ten companies is more diversified than buying one, there are 2 big distinctions to make here.

First Distinctions

First of all, traditional diversification means you are buying many companies in every sector of the economy. Investments in every sector are made to mitigate the damage if a single sector takes a big hit. 

For instance, if I owned 100 different stocks but they are all oil and gas companies, then my portfolio would take a major hit if regulations are passed limiting fossil fuels. 

Sectors of the Stock Market

And I couldn't just own one company in each sector because I would not be protected from individual risk to that specific company. 

For instance, a single company in a sector could be severely damaged by lawsuits if an employee gets hurt on the job while the rest of the sector is flourishing. 

So I would want to own many companies in every sector to ensure that my only major risk is market risk. My portfolio should only go down if the whole market is going down on average. 

Peter Lynch is NOT talking about that kind of diversification. He makes no distinction between different sectors or different companies that are highly correlated. Peter Lynch is hunting for just a handful of standout companies wherever he can find them.

Second Distinction

The second major distinction between Peter Lynch’s “ten stories” and traditional diversification is the filter aspect. Peter is starting with ten but he is filtering that list down as he sees the different stories play out. He might only end up with one company in the end. 

In the short term, the stock market will go up and down in a seemingly random and volatile way. The volatility presents opportunities as one company may drop in stock price while another increases with no material change to the company's situation. 

Peter Lynch will sell off shares in both underperforming companies and overpriced companies while loading up on the cream of the crop. So Peter will start with ten and narrow them down to just oneif the situation presents itself. 

But how does he come up with his short list of ten or so solid stories? 

How Do I Find a Great Company?

The first step is qualitative research that leverages your natural advantage. 

1. What are the quality companies in your industry? 

2. What are the quality companies that you interact with outside of work? 

3. What are the quality companies that you see expanding and growing in your area? 

Asking myself these 3 questions gets me a list of companies that I know, that I like, that I see growing, or all of the above. It doesn’t take very much effort or time out of my day to be conscious of the companies around me. 

Maybe you aren’t ready with a list of companies off the top of your head, but you can start being more conscious as you go about your daily life. 

I used to think investing had to be so complicated. But it doesn't have to be. Successful investing starts with identifying great companies any way you know how.

Peter Lynch points out that you didn’t have to get in early, it could have been 10 years after Walmart went public and you still would have 50X your money. You just have to start with a good story. 

Let me run with the Walmart example for a minute. 

I live in Texas and a huge grocery store in Texas is HEB. I love shopping there, everyone loves shopping there, it's almost always packed. This is a great story and they have 339 stores only in Texas! Unfortunately, this company is private so I cannot invest. But if they ever went public, this would be the first company I look at investing in. 

For a publically traded example, I recently went to Costco for the first time. Yes, I am late to the party. Everyone raved about it and I was stubborn. That store was BADASS. 

It is a great company with a great business model. You have to pay for a membership just to get in the store so they are making money on you before you even walk in. And I was happy to pay it because the good prices make up for the membership.

Costco Store Locations by State

Anyway, when I look at the map, Costco has roughly 600 stores with the largest chunk is in California with 139 stores and second place being Texas with 41 stores. Most of the states have just a handful and a few have none at all so it’s not overly saturated. There’s still a lot of room to grow.

Top Grocers in the USA

When I compare to the other top grocery stores in the US, Walmart has over 5,000 stores. Kroger and Albertsons have over 2,000 stores. Costco has a long way to go and they’re not stopping at the United States. They also have stores in other countries as well.

Costco’s Global Presence

So I have established that I think Costco is a great story as Peter Lynch says. Does that mean I go ahead and buy a large position in Costco today? 

No. 

I still have to determine if now is a good time to buy. 

• Is Costco overpriced? 

• Is Costco underpriced?

• Is Costco fairly priced?

How to Know If a Company is Overpriced?

If Peter likes a company at a fair price, he still won’t buy it. He waits for a haircut. He wants the stock to drop down to at least slightly underpriced. 

In Peter Lynch’s book One Up on Wall Street, he gives a simple formula to determine when a stock is priced fairly. This way, I can make a short list of companies that I have great experiences with, and then I can apply the formula to see if any of these companies are underpriced, fairly priced, or overpriced.

Let’s keep rolling with the Costco example to see if now is a good time to buy according to Peter Lynch’s pricing model. 

Peter Lynch’s formula only requires three terms: 

1. Earnings per share Growth

2. Dividend Yield

3. Current P/E Ratio which are super easy to find on Yahoo Finance. 

All three numbers can be found on Yahoo Finance. First, I will type in “Costco” in the search bar and then select their ticker “COST” in the drop-down menu.

The second two numbers can be found straight away on the Summary tab.

• PE Ratio (TTM) which stands for trailing (previous) twelve months is 54.11 currently. 

• Forward Dividend and Yield is 0.53% currently so we’ll use 0.53.

To find the first number, we will go to the Analysis tab and scroll down to the bottom where we can find the Growth Estimates area. 

• Next 5 years (per annum) is estimated to grow by 9.87% per year so that’s a score of 9.87.

Now that we have the three numbers, the equation is super simple as well. All I need is the calculator app on my cell phone and I can perform this.

For Costco, the Earnings Per Share Growth is 9.87 plus the Dividend Yield of 0.53 gives us 10.40. Then we divide that by the current PE ratio which is 54.11, and we get a score of 0.19.

According to Peter Lynch, a higher score is considered better. When Peter Lynch wrote his book, he would target companies with a score of 1.5 or higher. Any company with a score 1.0 or lower, Peter Lynch considered to be overvalued. 

Therefore, although Costco is a great company, Costco is very overvalued right now and it is not a good time to buy.

For that to change, either Costco’s share price needs to go down or their expected future earnings and dividend yield needs to go up or both of those things could happen. That would be ideal.

Small Caviat

Many investors today argue that Peter Lynch’s numbers are too low for today’s market and that it’ll be too difficult to find companies with a score of greater than 1.5. 

I think there is some truth to this. I like to target companies with a score of greater than 1.0 instead of greater than 1.5 to account for the fact that markets have gotten more expensive over time. 

Now, that still doesn’t change Costco’s fate since they have a score of 0.19. That’s still very overpriced so I’m going to keep waiting on Costco.

That being said, there are still some companies today with very high scores. Take Toyota Motors, for example. 

They have an earnings per share growth estimate of 16.8% which is really high, a dividend yield of 2.26%, and a PE ratio of just 6.9 which is very low. This gives them a score of 2.76 which is huge and puts them into the very undervalued category.

However, although the number looks great on paper, I don’t have much experience with Toyota so I don’t know if it’s a great story like Peter Lynch is looking for. If you do have a lot of experience or if you’re willing to do some research into Toyota, it could be a great purchase right now.

So What Now?

If you have never done extensive research on a company before, you can check out this video HERE to see my process for reference. 

Catch you on the flip side. 

We’ve already experienced 4 years of Joe Biden so we would know what to expect from him. But now that Kamala is the official Democratic nominee, it’s hard to say what effect she will have on the stock market.

In the event Kamala comes out on top, I’m trying to figure out the best place to put my money in 2025. So I researched all of her economic policy positions and found 3 stocks that stand to benefit the most.

On the go? Watch the video HERE.

What I Would Do With $100 if Kamala Wins the 2024 Election

Housing Construction

Kamala’s first major economic policy position is to address the housing shortage in America.

Harris is calling for the construction of 3 million new housing units over 4 years and plans to promote legislation for tax incentives for home builders to construct starter homes for first-time home buyers.

Kamala Harris Housing Policy

That first piece of legislation synergizes really well with her $25,000 in potential down payment assistance. She is targeting renters who want to get into their first-time home.

She’s got two pieces of legislation that are both meeting at the starter home level entry point. So the starter homes are going to be hot during Kamala’s presidency if she wins.

And there are two major strategies that I could employ to try to take advantage of this legislation.

The first is to diversify by buying the whole home-building market so that I benefit from the few winners and don’t get hurt as much by the few losers.

https://seekingalpha.com/symbol/XHB

There are lots of different choices as far as index funds and ETFs, but the best one that I’ve been able to find is XHB SPDR® S&P Homebuilders ETF with 36 holdings. This is a very balanced ETF where all of the holdings are relatively the same percentage.

The largest holding is DR Horton at 3.8%, and then the 10th holding is at 3.34%. So, this is a very balanced fund. You’re going to benefit from any winners in the sector, and you’re not going to be hurt as badly by the losers in the sector.

DR Horton Selling to First-Time Home Buyers

Now, the second way to attack this policy is to invest all-in on one company that is going to benefit the most from Harris's policy position on homebuilders, and that’s actually DR Horton.

They are the largest homebuilder in America. But more importantly, they are focused on affordable housing. 68% of DR Horton’s houses are priced under $400,000 which is perfect. 

[SCREENCAPTURE VIDEO TITLED “DR HORTON”]

Not only are they the biggest homebuilder in America, they also fill the niche of starter homes. They are in a perfect position to take advantage of Kamala Harris’s economic policies.

Semiconductor Manufacturing

For Kamala’s second major economic policy position, we’re going into the tech sector. During Biden’s presidency, both he and Kamala were strongly supportive of bringing chip manufacturing on shore.

This is because currently, the US tech giants are highly dependent on the Taiwanese chip manufacturer, TSM. In the age of AI, it is becoming more and more critical to maintain cutting-edge chip manufacturing.

CHIPS and Science Act

In August of 2022, the Biden administration passed the Chips and Science Act which provides $52.7 billion for American semiconductor research, development, and manufacturing. 

TSM was a large benefactor of this act and received $6.6 billion which TSM plans to build a third fabrication plant in Arizona.

So we have TSM building a presence here in America, but they are also enjoying strong support abroad in Taiwan. This is because Taiwan is dependent on the US for defense from China. If Kamala is elected, we can expect more of the same favorable policies and subsidies for Taiwan and, more importantly, for TSM.

Trump, on the other hand, has been very vocal about his unhappiness with Taiwan. He’s quoted as saying Taiwan did take 100% of this country’s chip business and thus should pay for defense. He also said that the U. S. is no different than an insurance company.

Trump on Taiwan

On top of Trump’s directed hostilities, he has also talked about putting a 10% tariff on all imports into the U.S. This would be a major blow to TSM’s profitability because they are responsible for 92% of U.S. high-end chip imports, and the stock market does not like uncertainty.

Dependence on Taiwan Chips

The moment Kamala wins the election, the Trump uncertainty around Taiwan should disappear, and TSM’s stock price will benefit as well as the companies that buy chips from TSM like Apple and NVIDIA. With a 10% tariff, it’s only going to cost us companies more to buy the same product.

Green Energy

Just like with TSM, many stocks are pushed down because of the risk to the status quo. 

Biden and Kamala have reaffirmed their commitment to green energy while Trump has come out against it. He threatens to roll back much of Bidenomics and ending subsidies for green energy and electric vehicles.

Solar Subsidies

As of August 2023, the US has doubled its renewable energy subsidies from 7 years ago, and solar has gobbled up the majority of those subsidies. If the US is on track for more and more green energy and we’re gonna double the subsidies towards renewables over the next 7 years, it stands to reason that solar will be in a prime position to get the most benefit.

In the lead-up to the 2020 presidential election, this solar ETF 6X’ed from a low of $21 in March 2020 to a high of $126 in January 2021.

TAN Invesco Solar ETF

I’m looking at ticker TAN (very clever) which is Invesco solar ETF with 46 holdings. Over the last 4 years, it has been dropping steadily, and a major contributing factor to this is the uncertainty around government policy.

As we near the election, I’m expecting more and more attention to be put on green energy since that is a major point of contention between Kamala and Trump.

If Kamala wins the election and draws more attention to green energy, I am expecting positive results from the solar sector. Maybe not 5X or 6X like we saw in the previous election, but I am expecting TAN to outperform the S&P 500 given the big catalysts that are coming up.

So What Now?

The biggest catalyst was Kamala winning the presidency, of course. That being said, the outcome is far from decided. If Trump wins the election, his economic policies will affect the stock market much more differently.

Check out this video HERE to see which stocks are best positioned for a Trump victory. 

Catch you on the flip side.

After 4 years of Bidenomics, if Trump wins the presidency, there will be major shifts to economic policy which means there’s going to be major shifts in the stock market.

In the event Trump comes out on top, I’m trying to figure out the best way to invest my money in 2025. So I read through and researched all of Trump’s economic policy positions and found three sectors that stand to benefit the most.

On the go? Watch the video HERE.

What I Would Do With $100 If Trump Wins the 2024 Election

1. Energy 

The first economic policy that jumps out at me is energy. Energy is a recurring theme for Trump in his 10 chapters of different policies that he’s bringing to the table. I think he references energy more than anything else.

First in chapter one to combat inflation. He wants to unleash American energy. He wants America to become the number one producer of oil and natural gas in the world and will lift restrictions to do so.

Defeat Inflation? Cheap Energy

In chapter three, to build the greatest economy, Trump wants to lift restrictions on oil, natural gas, and coal to make America energy independent and energy dominant.

Build Economy? Cheap Energy

In chapter four, to bring back the American dream, he wants to lower energy costs.

American Dream? Cheap Energy

In chapter six, to protect seniors, he wants to unleash American energy.

Support Seniors? Cheap Energy

Trump basically uses energy as a fix-all for the economy. And even if this strategy won’t work, it doesn’t matter to us because we can clearly target traditional forms of energy for our investments in 2025. And not just any energy ETFs, not just any oil, natural gas, and coal ETFs. We specifically want exploration. In fact, Trump even writes out in all caps “DRILL BABY DRILL” in his policy explanations.

So, we gotta go after exploration. 

iShares U.S. Oil & Gas Exploration & Production ETF

And the ETF to do that is IEO, iShares US Oil and Gas Exploration and Production ETF. This ETF has 50 holdings and it is relatively concentrated at the top. 

• 70% of this portfolio is contained in its top 10 holdings

• It has a decent expense ratio. A lot of the oil production and exploration ETFs will have expense ratios above 0.5%. This one has an expense ratio of 0.4% which is normally higher than I would like to go on a diversified index fund or ETF. 

However, this is not a diversified index fund or ETF. This one specifically goes after oil exploration and production. This is the perfect ETF to go after for if Trump wins the election.

2. Industrials

The next economic policy position that jumps out at me from Trump is his position on trade. Trump commits to rebalancing trade, securing strategic independence, and revitalizing manufacturing.

He plans to do this by, in part, supporting a baseline 10% tariff on all foreign-made goods. This means all imports are going to be 10% more expensive. And thus, domestic production will have a leg up on importing cheaper goods from other countries.

Protect from Unfair Trade

And then he goes a step further with China. He wants to secure strategic independence. Republicans will revoke China’s most favored nation status and phase out imports of essential goods. The most favored nation status basically means that you’re on an even playing field with all of the other countries that are also on the most favored nation status list.

So if China gets kicked off, it’s no longer going to be on an even playing field with other countries that are trying to import goods to the United States. In general, this means that trade with China is going to reduce if Trump becomes president.

China exports $506 billion in goods to the US in 2021, and the vast majority of that comes from one category: 47.7% of that is machinery and mechanical appliances. And then the second place category which is 13.5%, is miscellaneous manufactured items.

Trade with Taiwan

Those two categories alone account for roughly $300 billion in imports to the U.S., and there is going to be a huge chunk of that gone as China loses its most favored nation status and gets hit with a 10% flat tariff.

According to the Global Industry Classification Sector (GICS) Standard, the industrial sector includes manufacturers and distributors of capital goods such as aerospace and defense, building products, electrical equipment and machinery, and construction and engineering services.

GICS Sector Standards

The industrial sector is the ideal sector to take that market share from China so this is the sector that I want to invest in.

Vanguard Industrials Index Fund ETF

The ETF with the lowest cost representing this sector is VIS, which is the Vanguard Industrials Index Fund ETF with an expense ratio of just 0.1% (a very low expense ratio) and 388 holdings (very diversified). 

If any companies rise up in this sector, you’re going to benefit by investing in this ETF.

3. Defense

The third economic policy position from Trump is his position on the military. He promises to modernize the military. 

Republicans will ensure our military is the most modern, lethal, and powerful force in the world. We will invest in cutting-edge research and advanced technologies including the Iron Dome missile defense system.

Modernize the Military

And he also wants to revive our industrial base which ties into our previous industrials ETF, but this one takes on a little twist. Our industrial base is critical to ensuring good jobs for our people, but also the reliable production of vital defense platforms and supplies.

Revive our Industrial Base

Defense is the keyword and a key focus of Trump. This makes me want to invest in a defense ETF.

iShares U.S. Aerospace & Defense ETF

Ticker ITA is the iShares, US Aerospace and Defense ETF. This stock has been performing very well lately as it’s up 25% on the year. ITA has an expense ratio of 0.4% which is high for passive index funds, but for sector-specific ETFs, it’s pretty middle of the road.

This ETF has 39 holdings, and it is relatively concentrated at the top. The top 10 holdings make up 76.5% of the total holdings. And the number one holding is GE Aerospace.

I know I said I would do three sectors, but I can’t resist. I got to do one bonus stock. This one’s a little bit more of a stretch, maybe higher risk, high reward, but I’m connecting the dots with Trump’s policy statements.

4. Space, Crypto, AI

And the first one that jumps out is he wants to ban all Chinese EVs. Electric vehicles from China are doing very well lately, so if they were to be banned altogether, that would strongly benefit a certain American EV company.

Champion Innovation

Second, Trump references going to space. Specifically, he wants to expand freedom, prosperity, and safety in space by sending American astronauts back to the moon and onwards to Mars which also reminds me of somebody.

Ban Electric Vehicles Imported from China

And then third, recently Trump had a two-hour interview with Elon Musk. I think it’s possible that Trump could throw Elon a bone if he wins the presidency because of all the favorable and friendly coverage that Elon gave him in front of millions of users on X.

Elon Interviews Trump on X.com

For my high-risk, high-reward investment of choice, I got to go with Tesla. This company is incredibly hyped, and it has a lot of upside.

So What Now?

But just because a company is incredibly hyped doesn’t mean it’s actually performing as its share price suggests.

Check out this video HERE where I take a deep dive into Tesla’s fundamentals and calculate its intrinsic value. 

Catch you on the flip side.