+44 7393 450837


Follow on


This answer will speak about some of my Quora answers for this week. If you would like me to answer any questions don’t hesitate to email me – advice@adamfayed.com.

What is something that rich people know that the rest of us would benefit from?

Source: Quora

You have probably seen this man online, especially if you have used Youtube these days.

main qimg ccbbab58aced959cf29d28d6ba76fb68

He is hated by many. Plenty of people have given him bad reviews. Most knowledgable people about personal finance know that some of his advice isn’t true.

It doesn’t matter to him though because he understands some basic business facts such as:

  • Production comes before perfection (he uses an iPhone for many of his videos and not very professional kit)
  • Know your audience. The lion’s share of his audience aren’t wealthy, or finance or business experts. Often they are young and impressionable. What matters is being liked by your audience. Likes don’t pay the bills in isolation. If 99% of people like you, but nobody feels strongly about it, that is worst for traction than 80% of people hating you and 20% of people loving you.
  • Being known by $500m-1billion people, and being hated by 70%-80% of them, beats being loved by 2,000 people in your local community.
  • Scale and not selling time for money One course takes so many hours to make. Then it is available “forever” online so earnings aren’t linked to money.
  • Today’s scandal is tomorrow’s fish and chip paper. He can get as many good or bad reviews online, but it won’t affect him that much long-term.

None of this is praising or criticising him, merely it shows he understands some basic business concepts.

Beyond that, I would say that “the rich” aren’t a monolithic group and wealth and income aren’t the same thing.

Most people, however, assume that wealthy and income are always linked, hence why people like Tai buy fancy stuff for social proof – “he must know what he is talking about as he is driving a lambo and wearing a fancy watch – yup he made it!”

What we know from looking at the statistics, however, is that isn’t true in general. Most wealthy people spend less than people assume as this book shows:

main qimg 35ab2d39eed445d480fcc33ac806f921

A recent study showed that the average decamillionaire (worth $10m+) only spends 60k on a car.

Sure some spend zero, such as wealthy people who no longer drive due to climate change, and others spend hundreds of thousands or millions.

But the average is just 60k. So probably some people you know, including people complaining about being broke, spend more money than the average decamillionaire and indeed some billionaires.

So “acting rich” doesn’t make sense unless you are an influencer and can monetise off other people’s misconceptions about money.

The final point would be that investing in yourself, your own business and/or financial instruments is much safer in the long-term than “playing it safe” with money in the bank if done correctly.

Why are you afraid of investing in tech stocks?

Source: Quora

I am not afraid of investing in tech stocks if it is the whole market, meaning indirectly through the S&P500 and Nasdaq.

This question was asked in October 2018. Despite the volatility tech has done very well as I am sure you have seen.

It has done very well over 30 years as well, despite the incredible volatility, which included 16–17 years of stagnation after 2000:

main qimg 30f21901953d90dcf28e59faaadd5fc3

As the graph above shows, 10k yearly into the Nasdaq or S&P500 would have paid off randomly despite all the huge drops along the way.

The returns have been high enough to make you wealthy slowly, if you can deal with the ups and downs.

The problem comes when people try to time the markets based on trying to be too smart and “cute”.

This applies to many finance professionals as well. Many spend hours looking at various ratios including different p/e ratios.

It is far better to just buy 3–4 indexes, including a bonds index, reinvest dividends, rebalance and hold it for decades.

Instead, many people panic sell during moments like the 2000 Nasdaq meltdown, or indeed covid.

Some DIY investment platforms are reporting that over 30% of their clients sold in March-May of 2020!

So don’t be afraid of tech stocks if you are buying the indexes which are partly linked to stocks.

Be afraid of how you will react to any huge market decline. Buffett’s advice here is spot on:

main qimg 74e1eccf1a926b4f8316cd2050a7024d

A decline and a loss aren’t the same thing if the sell button isn’t pressed.

From your own perspective, what are the three most common barriers hindering individual financial freedom?

Source: Quora

In many situations wealth can work like a clock in that if one side of the machine isn’t working, the whole thing doesn’t work:

main qimg dc7ad80aa08aeec02153c4127d453914

Most people have three different things to consider when it comes to wealth:

  1. Net income
  2. Expenditure
  3. Investing returns

If one aspect doesn’t work, the whole equation doesn’t make sense. For example if your income is super high, your spending habits are excellent but you “invest” in something which is more like a speculation, then your net wealth could go down to zero in an extreme situation if the “investment” collapses.

What is more common is for people to just spend whatever comes in, or more than what comes in, even if their income is high.

That isn’t extreme. It is far more common than losing everything due to a bad investment.

It is now the norm in many countries for people to “live everyday like it is my last” and just spend 100% of what comes in after tax.

Finally there are those people that know how to invest, and are frugal, but their incomes are so low that they can’t build wealth.

So realistically you need to work on all aspects of the equation. Changing residency to help save you money on costs of living and taxes helps part 1 and 2 of the equation.

Investing from a young age to take account advantage of compounding helps the third aspect of the equation.

Usually the people that fail have either made an error on one of these three aspects, or just need to wait some time.

The lions share of 21 year olds coming out of university can only afford to save and invest small amounts of money. So it is natural that it takes some people time to get things working.

Apart from that, lack of focus is another issue. Many people work hard, but working with focus is key.

Focusing on skills that can help your income, in addition to money management skills, is important.

A simple example. A world-class business owner, salesperson, internet marketeer or sportsman who also has great money management skills is unlikely to be broke.

They have a scalable income after all, and if they are truly world class or at least good, they will find a way to earn well even during tough economic times.

However, a world-class business owner, salesperson, internet marketeer or sportsman who has terrible money management skills is highly likely to be broke!

So the two most important skills to learn is one which is related to your income, and the second related to how to manage that money.

How do I become rich? Please say more than just ‘hard work’

Source: Quora

Let’s start with a two basic premises. Firstly, most people want to be rich or at least wealthy.

Many people deny it, but the majority of people do. Second, despite the fact that most people want to be rich, few are willing to do certain things to get rich.

In some cases, this makes complete sense. It is obviously silly to work 20 hours a day, get sick at 40 due to overwork, and spend wealth to fix your health.

Likewise, becoming a criminal to get rich short-term isn’t rational either.

These are extreme cases though. Most people aren’t willing to do things which are outside their comfort zone.

So there is an oversupply of ideas, but an undersupply in execution.

There is an oversupply in people wanting to be rich, but an undersupply in those people willing to take the actions needed.

The bottom line is, there is money in any activity which other people aren’t willing to do, but you are willing to do.

Be willing to do what others won’t

main qimg 8756426922f47e82117788de6c76afe7

More specifically, you have income-generating actions that others won’t do, expenditure-related actions and investment actions.

As net worth = net income – expenditure x compounded investment returns, you need to focus on these actions.

Some examples – Income

  1. Work harder than others are wiling to do. I know you didn’t want to hear it, but it can work, especially if you compound it.
  2. Don’t work harder than others are wiling to do, but work smarter than others. For example, changing your residency if you have an online income to a lower tax country. With one move, you could reduce your taxes and sometimes cost of living, without affecting your gross income, but increasing your net income. This isn’t just for rich people either. Imagine you are an online teacher, coach or consultant earning 50k. In many countries you can’t invest anything on that level. If you change your residency, you could invest half of it in some cases.
  3. Be willing to be popular if needed. Many people aren’t willing to do that. Another simple example. 30 years ago, cold calling worked well in business. But most people hated it, including those doing it. So what happened? Those willing to do it, including business owners, could earn a lot without always needing to work super hard, because most people weren’t willing to do it. These days, why do many social media influencers make a lot? Most people are too sensitive to deal with trolls or put themselves out there. It is getting more competitive but still the point holds
  4. Break norms. Most people are concerning with what is “normal” so even if they work hard or smart, they focus on norms. For example, when doing business face-to-face was abnormal, very people in business focused on it even though getting a first mover advantage is sensible. Now it is normal what has happened? You guessed it, more people are comfortable doing it as it is normal.
  5. Play the numbers game. Most people are too proud to fail. But no matter how good you are, you might need to implement 20 ideas or more for 1 to work.
  6. Be very persistent. Most people will give up too soon
  7. Be more rational than emotional. Sounds easy, but it is easier said than done as an example below will show. Most people are “willing to cut off their noses to spite their faces” if they think something sounds “unfair”.

2. Some examples – expenditure

  1. What would most people do with a big inheritance. Spend it. Try to be more frugal than most
  2. It is possible to get rich slowly on a medium income and good speeding habits. This book explains the stats:
main qimg 3aca11654fe1ecad2da30b6479eb960a

3. Don’t act rich or try to impress others. This is what stops many people getting wealthy. Even many people who start earning big, just spend big, because they need other people to see “I’ve made it”. I am sure you personally know some people who have a big income but are struggling with huge debts such as car payments and mortgages.

3. Investing habits

  1. Define long-term as not even 20 years. Focus on a lifetime
  2. Don’t panic sell like countless people do when markets are down.
  3. Don’t time the markets
  4. This is a great example of ideas vs execution. Unlike a lot of what I said above, countless people know that you shouldn’t try to time markets and you should be long-term. It is “common” advice. Yet how many people do just invest every month for say 30, 40 years? Again, many people don’t, even if their financial situation allows. I have lost count of the number of people that have panic sold when markets have been down, even if they know deep down it is irrational. But since when are human emotions rational? So again, the money is in the execution, not the ideas. So you don’t need to reinvest the wheel. Just executing better than others is often enough.

The reason being willing to do what others won’t do is so powerful is it is less competitive than other ways.

In the 1980s there was a boom in plastic surgery in some parts of the US.

Salaries for doctors was high for doing work which wasn’t horrible.

Sometimes doctors in that niche were making 5x-10x what normal doctors were earning.

What happened? Many doctors from all around the world and country relocated. So it drove down salaries.

The point is, if there is an easy and “nice” way of making loads of money, it gets more and more competitive.

I would start by listing all the skills, personality traits which require no skills and resources you have (time, money even if it is limited).

Then ask yourself how you can work on these things to improve your situation long-term.

Read a lot as well, so you can expand on the list. Play the long game and be persistent.

Why is Tesla’s stock market price so high if its EPS (earnings per share) is nowhere near its value?

Source: Quora

Tesla is finally making a profit now. The price was going up even when the firm was unprofitable.

However, as you rightly say, it doesn’t look like a good buy relative to how much money it is making as profit.

So many investors are betting (speculating) on the fact that Tesla is the future.

So they are willing to overload the fact that Tesla doesn’t look good value for money in 2020, in the hope that the valuation will “catch up” in the future.

In other words, if Tesla starts making more money in 2021, 2025 or 2030, the stock price will look more “fairly valued”.

There are two possibilities here:

  1. Tesla’s stock price will fall long-term so its EPS ratio will become normalised
  2. Tesla’s profitability will rise dramatically meaning that the EPS ratio will become normalised. Therefore, Tesla’s stock price could stay the same or rise a lot more, but the EPS will look more fairly valued.

If you look at any individual stock long-term, p/e and EPS ratios can seem out of kilter for 5, 10 or even 15 years making some stocks seem very undervalued or overvalued. Long-term though, these ratios often become normalised.

This is the key difference between a speculator and investor though.

A speculator is often willing to take “bets” on the future. An investor is much more likely to stay away from that kind of thing.

That’s why many professional investors now either buy the whole market (index funds/index-linked ETFs) or only stock pick stocks that have been consistently making money for years or often decades.

A lot of individual do it yourself (DIY) investors, however, are trading on emotion.

It would be interesting to know how much of Tesla’s price increase is based on smaller investors investing on DIY platforms vs how much institutional and professional investors are placing in the stock.

Either way I would keep a maximise of 10% in individual stocks. Too many DIY investors get their fingers burned by this kind of thing.

Look at the 1990s and tech. The index itself (the Nasdaq) has more than recovered and people had a 10 year+ period to buy it cheap after the 2000 crash.

Countless individual stocks that were going crazy during the 1990s went bankrupt or never recovered.

I am not saying the same thing will happen with Tesla. It might increase or fall.

Merely huge risks remain considering its valuations.


Top Content

Top Articles
Personal Financial Planning Investment Options Godwin Capital Review
HSBC Expat Review
Getting Money Out of China
Best Investment Options for Canadian Expats
Best Investment Options for UK Expats
Best Investing Options for American Expats
Best Investment Options for Australian Expats
Regency for Expats Review
Capital International Group Review
RL360 PIMS Personal Investment Management Service Review
Investors Trust Access Portfolio Review
Investors Trust S&P 500 Review: Should You Buy?
Novia Global Review: Do Better Options Exist?
Custodian Life Review 2023
Evelyn Partners Review: This is Why You Shouldn't Buy as an Expat
Sarwa Dubai Review 2023: Is This a Good Idea?
Dominion Capital Strategies Guernsey Review
Utmost International Professional Portfolio Plan Review
Utmost Worldwide Choice Review
Hansard International Capital Investment Bond A Review
Hansard International Universal Personal Portfolio 2023 Review
Utmost International Quilter Collective Investment Bond Review
Utmost International Collective Redemption Bond Review
Utmost International Executive Redemption Bond Review
Utmost International Managed Capital Account Review
Hansard International Vantage Platinum II Review
Zurich International Vista Savings Plan Review
St. James’s Place Review 2023: Should You Buy?
Premier Trust Review
RL360 Regular Savings Plan Review
RL360 Quantum Savings Plan Review
Friends Provident International Premier Advance Savings Plan Review
Friends Provident International Reserve Bond Review
RL360 Oracle Offshore Bond Review for Expats



Gain free access to Adam’s two expat books.

Gain free access to Adam’s two expat books.

Get more strategies every week on how to be more productive with your finances.