Breaking Through the B.S of InvestingJan 09, 2024
Anywhere you look, you'll find people giving money advice. It can be a lot to figure out what's actually useful and what's not. I'm Candy Valentino, and I've been in this tough spot too. I've spent years learning the real deal about investing and how to truly grow your money.
This isn't just about proving myths wrong; it's about giving you the know-how and tools you need to make wise choices in business and investing. We're going to look at the most important things I've learned from talking with top experts and from my own life. I want to help you rethink what you believe about making money and give you strong plans to follow. Let's clear away the confusion about investing and start you on your own journey to making more money.
Fallacy of Average Returns
As someone who's started businesses and invested money, I've learned you have to look closer to really get what's going on with an investment. One tricky thing is the 'average rate of return.' It sounds good, like you'll make steady money, but here's what I've figured out: average doesn't always tell the whole story.
Imagine this: You invest and lose 50% one year, then gain 50% the next. The average might make it seem like you're back where you started, but you're not. You'd actually have only 75% of what you put in. This big difference between 'average' and 'real' returns is something I've learned the hard way, and I want every investor to understand it.
Getting this wrong can really affect you. I've seen lots of people, including myself, get pulled into plans that look good on paper but don't work out. It's not just about the numbers you see; it's about how those numbers actually affect your money over time.
So from my own lessons, I encourage you to look deeper. Ask hard questions, understand how returns are really figured out, and think about the risks as much as the possible gains. When you're investing, really knowing your stuff is the best tool you have.
Wisdom of Protection First
In making money, it's tempting to focus only on growing your cash and forget about keeping it safe. I've learned, through good and bad times, that protecting what you have isn't just smart; it's a must. You need to make sure your money is safe from risks before you try to increase it.
If you skip this important step, you could end up in a really bad spot. Think about working hard on a business or investments, only to lose everything because of something like a lawsuit or a big drop in the market. I've seen too many people face huge losses because they didn't protect themselves. It's about more than just keeping an eye out for dangers; it's about making sure your money can survive tough times.
So, what does protecting first mean?...
It means getting good insurance, setting up your money in a way that keeps it safe, and always having a backup plan. It's better to be ready before problems happen. In our chat, I talked about how something as simple as extra insurance can be a big help for a small cost. Taking these smart steps now is what makes sure your money is safe in the future.
I suggest you take some time to check your own safety measures.
Are they strong enough?
Are they current?
Remember, in money matters, making more might seem exciting, but having a strong defense is what keeps you going. Put safety first, and you can move forward knowing you're ready for whatever comes your way.
Earning vs. Multiplying Wealth
To handle money wisely, I've figured out that you need to balance making money and growing it. First, you earn money by working or running a business. But the real magic is in multiplying it, making what you've earned an increase. Here's how I see it:
- Active Work - This is the cash I get from my businesses or jobs. It's what I earn for my hard work and smart thinking.
- Getting Better - I always try to improve my skills and know more. The better I am, the more I can earn.
- Direct Effort - The more I work, the more I usually make. It's pretty simple.
- Investing - I take the money I've made and put it to work. Whether it's in houses or stocks, this helps my money grow without me having to work for every penny.
- Using Tools - I've learned to use loans and other tools to make my investments even more powerful.
- Compounding - This is one of the best parts. It's when my money earns more money, and then those earnings earn more. Over time, it really adds up.
From what I've learned, earning is important, but it's really the growing part that has sped up my way to more money. It's like gardening; earning is planting the seeds, but growing is when you water and care for them.
I often say, "Your hard work gets you started, but your investments really win the game." This means that growing your money is key to really getting ahead.
Power of Business Ownership
From the time I started my first business, I knew it was more than just a job; it was a way to really be free. Owning a business has shown me and many others how powerful it can be for making money. Let me tell you why this has been such a game-changer.
When you own a business, you can really make the most of what you have. Your time, money, and skills can go further and do more in your own business, giving you chances to grow and make money that you don't get with a regular job.
Taxes are complicated, but if you know what you're doing, they can work in your favor as a business owner. You can keep more of the money you make because of things like tax deductions and credits.
It feels great to be in charge of big decisions. When you run your own business, you get to choose which way to go and how to grow your money.
But with all this power, you've also got a lot of responsibility. Being an entrepreneur is tough and full of risks. You need a good plan, the courage to take chances, and the dedication to keep going. In my own story, every tough time was a chance to learn and get better.
Thinking back, I remember realizing how much I had actually built not just a business, but something that would last. That was a big moment for me, showing just how much you can do with a business.
If you're thinking about this path, know that it's hard but also very rewarding. It's not for everyone, but if you're up for it, owning a business is more than just a way to earn money it's a way to make a meaningful life. If you go for it, this could be the most exciting journey you'll ever take.
Myth of Diversification and Fast Tracks
People often talk about two big ideas in making money through investments as if they're surefire ways to get rich: diversification and fast-track strategies. Both have their good points, but they also have myths that can mislead investors. Let's clear up these ideas and see why a smarter approach is needed.
Spreading out your investments, or diversification is usually seen as a way to play it safe. It means you put your money into different types of things so that if one doesn't do well, the others might balance it out. But if you spread your money too thin, you might not make much at all. It's like putting a little bit of food on every plate at a buffet — you end up not getting enough of what you really like. Diversification isn't the perfect answer for everyone.
Then there's the idea of fast-track investments. It sounds great to get rich quickly, but these kinds of investments are risky. Sure, some people strike it rich overnight, but you don't always hear about the many who lose a lot. Trying to make money fast can be more like a wild ride that might end badly.
In my experience, both diversification and fast-track methods have their moments, but they're not one-size-fits-all answers. Smart investing means knowing what you're comfortable with, doing your homework, and having a solid plan for the future. I've found that making money that lasts comes from making informed, thoughtful choices, not just following what everyone else says.
As you figure out your own way to grow your money, remember that the best plan is the one that fits you. Look at these common ideas with a critical eye and make choices that will help you build lasting wealth and security.
Heart Wounds and Financial Decisions
Our choices are often closely linked to our feelings and past experiences. It's really important to understand this connection as we look into how our emotional 'heart wounds' can influence the way we handle our money.
Personal Side of Money
In my journey, I've realized that learning about money isn't just about numbers and plans; it's also very personal. Our money choices are often shaped by our emotional 'heart wounds' — the pain from our past experiences and relationships. These wounds might make us act in ways that aren't really good for us.
Understanding the Impact
These heart wounds can show up as always chasing more money to feel valued or being scared to invest because of past losses. They're like feelings that sneakily change the way we think. For example, I used to take big risks just to get approval from others.
How to Start Healing
The first step to making better money choices is to see how these emotions affect us. This means thinking deeply about why we're making a choice: Is it really what we want, or is it because of our feelings? Often, getting better means getting help from a professional and learning more about ourselves.
Every money mistake I made was connected to something emotional I hadn't dealt with. Facing and fixing these issues helps us make choices that match what we really want and are good for us, which leads to real wealth and happiness.
Encouraging You to Look Inside
As you make plans for your money, remember to look inside yourself. Are you really making your own choices, or are they influenced by old hurts? By dealing with these emotional wounds, you'll be able to make choices that are truly right for you, leading to not just more money but a happier life.
In building wealth, starting a business, and making smart money choices, it's important to remember that everyone's path is different. The ideas and stories shared here aren't just to teach you; they're to help you think more about your own money journey.
I challenge you to think about your own money decisions and plans. Are they really helping you and fitting with your goals, or are they shaped by emotions you haven't dealt with or misunderstandings? Knowing how your feelings and money choices connect isn't just about making more money; it's about living a better and more powerful life.
Join the Conversation and Learn
Your thoughts and stories are really important, and I'd love to hear them. Leave a comment on our YouTube episode to share something about your own journey or ask me anything to understand money better. What clicked with you? What are you excited to try? And if you learned something valuable, share it with others who might find it helpful too.
Keep Learning with Me
If you want to keep learning about this, subscribe to my YouTube channel for more talks and tips on making money and starting your own business. Also, check out my podcast for deep dives into being a great leader and growing personally.
A Book to Help You
And if you're really ready to improve your money life, get my Wall Street Journal bestselling book, "Wealth Habits." It's more than a book; it's a guide to changing how you handle money and improving your life. Let's work together to create a future where you're confident and successful with money.