Make Time To Think Differently

Mexican fisherman and his catchThe stock markets surged to new highs on May 3, 2013 in large part because the Labor Department said the economy added 165,000 jobs in April, 15,000 more than consensus expectations. 15,000 is a rounding error in a nation of millions, but we’ll take it if we can see billions more wealth created!

Just think about this situation for a little bit. Is it not a little bit ironic that more jobs creates more stock market wealth, but once you have lots of stock market wealth you no longer have to work? I’m reminded about the parable of the Mexican fisherman who gets ridiculed by an executive with a fancy MBA for why the fisherman doesn’t want more than his catch. The whole point about investing our money is so that our money will one day work so hard for us that we don’t have to.

FORGET ABOUT THE SAME

Here I am an unemployed guy looking for work as a masseuse’s guinea pig in Bora Bora and for what? To earn $25 an hour while getting rubbed down by some lovely lady on the beach after two hours of tennis and one hour of scuba diving? Forget that! What I should be doing is spending my hours trying to uncover potential multi-bagger investment opportunities that people have overlooked. My biggest regret when I was in my early 20s was not having enough money to invest in this one stock that exploded by 50X in a matter of months. I’ll tell you about this story in a future post.

Risk-on is risk-on. People overbid like crazy for things in a bull market. Bubbles will eventually form, but before the burst you can make a ton of money in the process. Everybody likes to talk about how dotcom millionaires went bust in 2000. I personally know a handful of dotcommers who did quite well. The same goes for real estate. We are talking millions of dollars in the bank before the age of 30. Not everybody got crushed like the media makes it out to be. Those who succeeded in cashing out have quietly gone about their ways.

From now on I will spend at least 15 minutes once a week looking for investment ideas, publicly traded or private. I’ll alternate the time for new online entrepreneurial ideas as well. I’m not going to over promise by saying 30 minutes or 1 hour because I know that won’t happen.

Most of us spend too little time using our imaginations. We wake up, brush our teeth, get dressed, go to work, come home, eat dinner, watch TV, poop, and repeat the cycle over and over again. Let’s make room for some meditation, some investment idea hunting, and some creativity. I bet if we set aside more time to think differently, we can do much more, be much more, and earn much more.

IDEAS TO PONDER

* Is there a product you swear by that you use all the time? Perhaps it’s a publicly traded stock you can look into.

* Is a company in a foreign country replicating the success of an established player? Samsung vs. Apple, Yandex vs. Google, Hyundai Motor vs. Honda, etc.

* Is there something you are particularly good at or fond of that you can leverage into something more?

* Is there a problem that bothers you where you see a solution?

* Do you see something mediocre which you can do better?

* Where is fear the greatest? Some of the greatest opportunities come out of darkness.

* My post on Should I Invest In China? is my attempt to think differently and look for laggards in a bull market. Your turn!

Readers, when was the last time you set aside time to think about a new business, a new investment idea, or a new approach? Why do we dream so differently than we did as kids? Maybe you’ll be motivated to set 15 minutes aside right after you’ve read this post. Let me know what you come up with.

Photo: A Mexican fisherman with a huge catch, 2011.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    A lot of people are chasing that “one stock that exploded by 50X in a matter of months.” That is stocks that will give big capital gains. I’m starting to head the other way and focus on dividends.

    Since 2011 I’ve been pursuing what is a new investment idea for me. In the UK it is called a High Yield Portfolio (HYP). In brief it involves amassing 15-20 shares, from different industries, with big market cap, typically with dividends above the market average, that I believe will spin off dividends that rise at or above the rate of inflation. It only considers capital growth as a secondary cnsideration.

    During the accumulation phase you then reinvest those dividends and in “retirement” those dividends become your salary.

    My observation so far. It’s a very boring investment strategy that will certainly not give you any 10 bagger opportunities but it’s investment idea that I am warming to.

  2. says

    My very first stock investment was Microsoft not long after the IPO. I invested $1000 and after a year it was worth $10000 when I sold it (which was stupid). I talked to my Dad who was a long term investor and said this stock picking stuff is easy. How little I knew – I was just lucky.

    I like your idea of thinking about investing every week. That’s why I started my blog about asset allocation – I wanted to force myself to think and write about the subject on a regular basis. There is nothing like writing to force you to clarify your understanding.

  3. Marcel says

    Yes! Investing as a life philosophy. More important than your financial assets, it’s all about how you invest your time, energy and thoughts. My goal this year is to start investing in my X-factor.

    • says

      Sounds good Marcel. Might be the best thing you’ve done. I don’t include any of my online endeavor in my net worth, but one day, I will, and I believe it could make up a substantial portion if I keep at it.

    • says

      I’ve been waiting for a pullback since S&P 500 1,555 as well to no avail. But, with my 401(k) conversion to an IRA, I went balls to the wall in China stocks and Apple during their last results. I do have a SDS hedge on though.

  4. says

    Excellent idea! 3M has a policy similar to this for their employees, particularly their scientists. It was one of those moments that invented “post it”. For me, the additional time pointed me into blogging. Years ago, the additional time pointed me into income property.

  5. says

    The suggestion to spend some time daily or weekly looking for new investment opportunities is excellent. However, I would exercise more caution when describing bull market success stories. I don’t doubt the intelligence of those who “cashed out”, as you described, but we are talking about short-term market timing, which in my experience is rather futile. I prefer an investing approach which revolves around finding solid long-term investment opportunities instead of attempting to time the market ups and downs

  6. says

    Recently I’ve been setting aside 5-20 minutes/day 4-5 times a week now to get more fit. Even just a small amount of time can go a long way. I used to think what’s the point of 5 minutes, but there’s actually a lot you can do in 5 minutes! So I totally agree that the same thing applies to investing, brainstorming ideas, and learning more about personal finance overall.

  7. says

    I’m surprised that you hadn’t gone down this avenue until this time Same. After all, you could consider your “job” either increasing your portfolios, or at a minimum paying your future taxes as you get into your 59.5 years of age.
    I’m thinking that when I retire in another 13-14 years, then I will have the job to do the same.

    Glad to see you’re considering some risk taking for a change. :-)

    • says

      It’s because I lost my greed for more money after I reached my financial nut goal, and now with all this time I’m finding the greed again.

      The rolled over IRA of $400,000 is a perfect portfolio to punt around. If it goes to $0, it will suck but I never counted on it in retirement anyway. It would be fun to try and grow it to $1-$2 million in 10 years. Let’s see!

  8. says

    I’ve been doing this for the past year or so and I’ve come up with a bunch of interesting business ideas around energy efficiency and saving energy in residential homes. All my ideas have failed once I really dug into them, but that’s just part of the process… or so I’m told.

  9. says

    I quite like this idea, actually! A friend of mine does a “taking stock” type thing of her life each week and calls it her “state of the union” checkin. Applying this idea to think creatively about investment possibilities is awesome, and easily achieved.

  10. Mitch says

    I like dividend stocks primarily, but I like to play the extremely riskylong shot odds of some of the cancer drug development companies with drugs in pretrials. SNTI or CTIX. You hahve to have a little fun with it.

  11. says

    Readers, when was the last time you set aside time to think about a new business, a new investment idea, or a new approach?

    I will answer this by quoting you – “There‚Äôs something missing in all of this, and that something is what I call the X Factor. Above average people seem to always be thinking of new ways to build wealth. ”

    I am currently involved in several small start-ups in addition to my day job which has brought me overseas making an expat wage.

    But within all that “trial and error” & “X Factor” are my core investing fundamentals which includes dividend stocks, real estate and CD’s.

    Roshan

  12. says

    Another one of your recent posts mentioned something similar. After reading that I made a point to spend more time searching out new investment opportunities rather than purely focusing on what I already owned.

    I started researching a relatively new industry and eventually ended up buying some shares in the current industry leader. They reported earnings last week and shares have risen more than 20% over the last 5 days. So, ummm…thanks for the motivation to search out new opportunities!

  13. San Diego says

    Sam great post, you got my entreprenurial juices flowing. I am working on a Mezcal (similar to tequilla) business up near the Bay Area, we are currently looking for investors to take it to the next level. We make the spirits the traditional way in the villages of Oaxaca Mexico and have been reviewed by the New York times to much acclaim. If you are interested in learning more just send me an email.

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