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Best Quora Answers For The Week – Part 1

This article will speak about some of my Quora answers for the week. If you want me to answer any question for you online you can email me – advice@adamfayed.com.

Do the constant gains in the stock market worry you?

Source: Quora

Simply put – no! The most ironic reason is those people that worry about rising markets are usually the same people that worry about……falling markets and crashes!

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Simple example. I know a guy who admitted that he foolishly panic sold in 2008.

In 2014, he thought markets were overvalued. In 2015 he thought the same.

In 2016 he was convinced markets would go down due to Trump’s election.

Ibn 2017 and until mid 2018, he definitely thought markets were overvalued.

He saw markets fall in late 2018/early 2019, but waited again, because “markets will fall further”.

In 2019, US markets increased by 30% and more in early 2020. Then after covid, there was a huge fall.

Again he didn’t buy because, quote, “markets will fall further and this time is different!”.

He regrets it now. The point is, people who worry about markets worry during rises and falls!

Apart from that, the main reasons I wouldn’t worry are:

  1. “Constant” gains are an illusion. There is always volatility in the markets. Always has been and always will be.
  2. Markets have always gone up long-term in most major markets. Whenever you start investing, it is highly likely, statistically speaking, that markets will be at records or close to records.
  3. The S&P500, Dow Jones and most major markets are below their records. In the case of the FTSE100, it is miles away from its record. So only the Nasdaq is hitting new highs every week.
  4. If you are ultra long-term and diversified, you shouldn’t be worried. If markets fall, you should celebrate. It is a chance to rebalance and buy markets at cheaper prices. In fact, for a long-term investor, you should celebrate any falls
  5. Nobody can consistently time markets even though many people can manage it by luck a few times.
  6. A gain and a profit are different. Likewise, a loss and a decline are different. Nobody “lost” money from 2008 or March 2020 if they didn’t panic sell.
  7. Reinvesting dividends is a key tactic alongside rebalancing to lower risk. If you are out of the market you can’t do that.
  8. Nobody can predict the future with regularity. Past predictions are no indiction of future correct ones. I have seldom met somebody who gets predictions right time and time again.

Also close to 100% of people I have seen get rich slowly investing have followed a certain path.

Investing over speculation. Rationality over emotions. Not caring about the wild swings. Having a plan and sticking to it.

Tinkering doesn’t work for most investors, especially DIY and amateur ones.

What is some of the best advice you don’t hear very often?

Source: Quora

My list would be

  1. Scandals come and go. Remember David Beckham’s affair in 2003 with this lady? Most people have forgot. His reputation recovered. Today’s scandal is tomorrow’s fish and chip paper even for somebody as famous as Beckham, Obama or the Queen. So if a “scandal” happens to you, in reality it is just the latest “scandal of the month”. People will soon forget. And yet so many people who don’t even have a reputation, worry about things affecting their business. Naive new business owners often worry about bad online reviews, when these things just come and go. That doesn’t mean you should intentionally cause scandals. Merely don’t take them seriously unlike what “PR agencies” say.
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2. Work at least once with a boss that is over 60. Why? It is linked to point 1. When you are 20, you care about what everybody thinks about you. When you are 40, you stop caring. When you are 60, you realise that nobody was thinking about you in the first place. That was allegedly said by Churchill and one of my ex bosses really taught me the true meaning of that quote when I observed how he dealt with things in business. Most younger people overestimate their own importance so overreact to victories, scandals and other events in business and life. Working for an older person for a few years gives you some

3. Ideas don’t matter. Everybody has million dollar ideas. Execution is everything:

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4. Take as many risks as you can when you are young. Many people give out great advice like “don’t sell your time for money”, forgetting that following that advice is easier if you take risks when you are relatively young and don’t have as many dependents.

5.Get a job first. Get good at it. Then start your own business when you are relatively young as per point 1. Many people focus on the good idea, forgetting that experience is key.

6. Be different and break industry/societal norms and rules. Extraordinary actions and behaviours are more likely to lead to extraordinary results.

7. Invest in the indexes when investing, from a young age if possible, to reduce risks and maximise gains. It is becoming more common advice, but few people are told this unless they actually seek out the information.

8. Don’t assume volatility and safety (stability) are always connected. A “non volatile income” or a “non volatile investment” isn’t always safer than a very volatile income. Who is taking more risk? The person who is earning 4k every month at a company or the person who has 5 sources of income, each paying between 1k-3k a month? It should be obvious. The same in investing. Putting money in the bank means it isn’t volatile. That doesn’t make it safe. It is normal to lose money to currency devaluations and inflation in many countries.

9. Go overseas at least once in your life. Those few years (or longer) overseas will give you a lot of experience.

10. Don’t be naive but also don’t be cynical. You gain more from co-operating with others than trying to protect yourself

11.Love gains just as much, or more, than hating losses. Most people are terrified of losses as per the graph below. But you need to take calculated risks and also sometimes work away from loss making activities in business.

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12. Don’t care about what other people are thinking about you. Most aren’t concerned with you anyway. It takes experience to realise that you only need to impress a small percentage of people.

13. Play the numbers game. It takes many well-implemented ideas to succeed.

14. Don’t assume that renting is always dead money and certainly don’t assume that a primary residence is the same as rental property. Use property as a home only.

15. Know your audience. Tai Lopez is hated, rightly or wrongly, by so many people. Get he understands some basic business concepts like the fact that it is better to be hated by 80% of 500 million people, than loved by 100% of 2,000 people in your local community. He is loved by his audience. Don’t try to be all things to all people. Most people’s problem is not being known at all (obscurity). Even being infamous beats that in business.

16. Have an ideal customer profile if you start your own business. Don’t automatically accept everybody. The best nightclubs have a dress code and try people away. The best lawyers have standards. You should have the same.

17. The important thing about university is learning how to learn and making sure it is the start of your learning process, not the end. Read even more after you leave university.

What does the upper class think about 9-5 jobs?

Source: Quora

Class, money and wealth aren’t always the same thing. It is in some societies but not in all places.

Where I am from, in the UK, it is like much of Europe. There are those that are not wealthy, those that are but haven’t inherited it and the inherited wealthy.

In some cases these inherited wealthy have came from families that have held wealth for hundreds of years, and even occasionally 1,000+ years.

These inherited wealthy make up a bigger percentage in Europe than most of the world.

Saying that, it has gone down a lot in recent times as more wealthy people have came from abroad to London and other places, hence the statistics seen here:

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Anyway, in a society like the UK, much of the “new rich” like footballers and other celebrities, are still considered working class even though they have a lot of money – or at least they have income even if they don’t always keep their wealthy after retirement.

The same with some people who are relatively high earners like plumbers.

Ironically there can even be a reverse snobbery shown towards these groups of people. They can be looked down on, sometimes very unfairly.

In comparison, many CEOs, executives, directors and upper management are considered middle or upper-middle class, especially if they came from a comfortable family.

Whereas the inherited landed class, who don’t need to work even a few years or do business for that matter, are considered upper class.

I know, it is silly, but in this context many executives and managers once worked 9–5 jobs on the way up the ladder.

Therefore, it might not be the best way to earn a living, but there is some empathy.

With those that don’t need to earn a living, and never have had to do 9–5, there can be more elitism.

In some other countries I have lived in, class and money are more easily tied than in most European countries.

Maybe one day most countries will be the same. Class is certainly seen as less important amongst most younger people these days.

It is still there though, albeit more subtly than before.

The main things are:

  1. Work on your income. Do this by always learning new things, reading, implementing rather than just focusing on ideas, spending more time with better influences and less time with toxic people. Network + develop contacts online and offline. It can take time but it is worth it.
  2. Watch your spending habits. As you earn more, as per number 1, don’t just spend loads more. Otherwise, you aren’t more stable. It is just a rat race and a keeping up with the Jones’ contest.
  3. Take calculated risks in your career, with investing etc. There is no such thing as zero risk. Taking no risk, often results in bigger risks further down the line.
  4. Invest money, don’t save it, apart from a small amount for emergencies.
  5. Start investing early. Compounding is king in investing.
  6. Always invest, ideally monthly, or at least in regular intervals. Never try to time the stock markets. You might get it right once or twice. You won’t do it over 50 years, adjusted for fees and taxes.
  7. Learn the basics about how to invest properly or outsource it to somebody that does. Don’t DIY invest without knowing the basics. Otherwise, what happens is people act like the beginner in the gym that has no idea how to control the tools and ends up inured! In investing, you get a worst result than a gym injury if you get it wrong yourself!
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8. Don’t allow peer pressure get to you. It all too often makes people make silly decisions like buying the most housing for their needs and not the least, overspending, going in the wrong career and so on.

9. Get started. Ideas are one thing but 80% of life is just turning up and then being persistent.

10. Be persistent and play the numbers game. You might do all of the above and still take years to succeed in doing things like scaling your income. So don’t give up. If something was easy, then everybody would do it, so you should be happy that it isn’t always easy.

The issue is most people don’t want to put in the effort or take the uncomfortable choices.

I was watching a Gary Vee talk and he started the lecture by saying “I know about 97% of you won’t do anything with this”.

It is true and it is something you soon realise if you start your own business.

People want easy ideas that will magically produce results. Few are wiling to be very persistent.

If you are willing to do things other people aren’t willing to do, however, you stand a great chance, because other people won’t just copy what you are doing as it comes with some pain.

And once you start getting succeed, don’t be complacent. Success often isn’t maintained long-term for this very reason.

What are the things rich people do that poor people don’t do?Originally Answered: What things do millionaires do that poor people don’t?Remove Banner

Source: Quora

Source: Quora

Many people have probably asked you this question:

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Wealthy people are much more likely to priority wealth over mere income and consumption.

Yet who asks “how would you reinvest a lottery win to make sure you can earn cashflow and future income?”. Almost nobody!

Thinking “what can my money earn me” is more common than thinking “what can my money buy me” for wealthier people. At least the sustainably wealthy.

There are two simple reason for this:

  1. If you don’t find a way to make money work, you could eventually lose it all like the 60% of former sports stars that go bust within just 5 years of retirement, and yes the many lottery winners that do the same! If you find a way to turn income into future wealth, income and cashflow, you can have more security, future income and wealth by sacrificing a bit of present income.
  2. You can’t out-earn bad spending habits in the same way you can’t out-run a bad diet with exercise. It is basic maths. If you earn $1m after tax but spend $1.2m you are in debt. You are high income but you aren’t wealthy. So investing 30% of a 80k income is more beneficial to wealth building than investing 5% of a 200k income.

Most people have this fear of losing something. So all too often people think “well I could die tomorrow. What’s the point in having $2million in my investment or bank account?”.

This fear of losses, where losing something is much more painful than the thrill of gaining something (loss aversion as explained below brilliantly by Vintage Value Investing’s cartoons) is something many wealthier people have learned to deal with.

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Beyond that, the bigger differences are:

  1. Investing as opposed to saving money
  2. Not just focusing on selling time for money. Leveraging money (investing as an example) or other people’s time and resources (starting your own business) is a key difference. Most wealthy people invest and/or start their own business. If they haven’t, often it is because of company pension schemes, but that is indirectly investing.
  3. Reading, traveling and learning more. University is the start, not the end, of the learning process.
  4. Being a contrarian and breaking some normal ways of doing things.
  5. Believe it or not, wealthier people are more likely to be more trusting and less cynical, and see the value in co-operation.
  6. A focus on the long-term. I once spoke to a recruiter friend who told me that calling up an executive is easier than the intern. The reason? Partially point five but also information is useful. The executives, even those not seeking a new position, are sometimes open to information exchange. In comparison, most people only engage if they want a job – “what’s in it for me short-term”. Same in the investing industry. Bigger clients are actually often easier to deal with than smaller ones. People have told me the same thing in real estate and a range of industries as a generalisation.
  7. Journaling + having a plan.
  8. Be quite sceptical about some types of luxury spending – reverse snobbery. Preferring to buy from an independent store as opposed to a branded store as an example.
  9. Get out of the bubble. We all live in bubbles. I spoke to one of my friends in the UK recently. Half of his family are quite wealthy and another side is poor, even though both sides started with little. On the poor side of the family everybody is proud of this one member that got “a full-time job”. It is only 30 hours a week. Yet in their bubble, that is a big deal, as most are on welfare. For the other side of the family, they are in a different bubble. We all live in bubbles, no matter how hard we try not to. It is important to see different perspectives though. Getting rid of toxic people and networking with wealthier people can change many people’s perspectives and lives.

What are some unusual ways that have allowed you to save a considerable amount of money?
One of the easiest ways is avoiding peer-pressure related spending:It has zero value added, because by definition you are being pressurised to do it. Yet many people feel the pressure to own their own house, even if they suspect renting is cheaper in their city, or have the biggest house for their bu(more)105Adam Fayed·WedFounder of Global Online Financial Advisory Firm What principles do you follow in stock investing?

The main ones are:

  1. Simplicity beats complexity
  2. This time probably isn’t different. Now sure, things change. Some things are unprecedented like a lockdown or two world wars in 25 years about 100 years ago. But markets will come back
  3. Volatility isn’t stability.
  4. A period of stagnant isn’t a bad thing. The Nasdaq has been the best performing index for the last 30 years. It was stagnant from 2000–2016 if you bought at the peak. The S&P500 and Dow Jones have done 9%-10% long-term if you reinvest the dividends, but they were stagnant from 2000–2010, and 65–82. Same with other markets that have done well long-term.
  5. Linked to the last point, celebrate any market falls or stagnation. It means you are buying at cheaper prices.
  6. Reinvest the dividends. That helps in a stagnant market like the UK’s FTSE100 as an example:
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7. Never try to time the markets

8. Have more in stocks than bonds, but rebalance from one to the other yearly when one component is doing better than the other.

9. Focus on my spending habits, income and investing habits because they are all linked to total $ returns. The more and longer you invest is more important than mere percentage returns

10. Learn from other peoples’s mistakes. It is easier than your own mistakes, but I also learn from my own mistakes.

11. Getting the market average is enough to get rich slowly for most people.

12. The media is not offering value for money. To the contrary, their job is to put bums on seats, to entertain. Entertainment isn’t real investing. Switch off the media or don’t take it seriously at least.

13. Control emotions. There are many fat doctors out there and plenty of people with loads of investing knowledge that are broke too. When there is a huge stock market crash, controlling emotions is more key than knowing a lot. Staying calm is easier said than done

14. Consistency is key. Good, long-term, actions beats a good year or two.

15. Get international exposure and not just focusing on one country.

Why do musicians go broke fast?

It isn’t just musicians. It is the lions share of sports and entertainment industry.

Take these incredible statistics:

  1. 60% of former basketball players are said to be broke within just 5 years of retirement – Bankrupt basketball star wishes he’d gotten an MBA – InvestmentNews
  2. A similar number of footballers and other sports stars go broke

Some people might say that this is because only the very top stars tend to make a lot of money.

However, even top end stars can go broke, such as Johnny Depp, who “ claimed he was left broke after losing his entire $650 million movie fortune and wracking up $100 million in debt” – Johnny Depp says he lost his $650m movie fortune and wracked up $100m in debt

The main reasons are:

  1. Lack of management money skills. Learning to make money is one skill. Learning to budget and invest money is different. If you have loads of hangers on and spend money left, right and centre, you can get broke no matter how much you make.
  2. Number one is especially the case if you face unexpected events like divorce or even something like coronavirus
  3. Most sports and entertainment stars, even the top ones, have a relatively shorty period at the top. So Mike Tyson made $500m, but that was mainly over 10 years. I am sure the same is true in the music industry. We have all heard of one hit wonders and those that are successful over a short period like 5–10 years. However, I am sure most of these people get used to the money and can’t adapt after retirement
  4. Some big bands, if they have 5–10 members, don’t end up with much after all the money is split between them and the management company. This is what this guy claimed – They were once the most popular teen band across the globe, amassing fame and fortune with their hit songs and TV show, but one of the stars of S Club 7 has revealed he has hit rock bottom
  5. People don’t usually hope for the best and plan for the worst. Most people expect good times to keep rolling in much the same way that most poorer people expect to be poor forever. It is partially human nature to assume that the past is a guide for the future.
  6. If people make money too early, in their 20s, it is more likely to be easy come, easy go, compared to somebody who needed to wait until their 30s or 40s.

The only saving grace? Many of these fading stars can still get some money from royalties even if they declare bankruptcy and some still have a personal brand.

So a few have fully recovered after losing it all.


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