April 18, 2024 • 44 mins
As the aroma of your morning coffee hits, you might wince at the new price tag, and as the sugar tax sweetens the US government's pockets, your wallet feels lighter. But did you know those tiny financial habits could brew a fortune over time?
In this week's steaming-hot episode of Rebel Traders Podcast, Sean and Phil spill the beans on how incremental savings and sharp diversification strategies can juice up your investment game. From the caffeinated highs of the UK's coffee market to the sugar-spiked tax landscape of the US, we're serving up a blend of sweet strategies and robust revelations.
Join us as Phil percolates over tax liens and certificates, a unique concoction not found worldwide. Meanwhile, Sean, the investment barista, stirs up the real estate realm, from Bangkok's pricey plots to profitable house shops that keep the cash flowing like a well-made drip.
Strap in as Sean shares the secret beans behind his investment portfolio—60% in stocks and options, 30% mainstream crypto, and a sprinkling of 10% in micro caps, revealing a world where 32,000% returns aren't just a caffeine-induced dream.
Meanwhile, Phil brews up wisdom on why trading isn't all about the big wins; it's about letting the market serve you its riches. The duo grinds out the details on diversification—beyond the usual financial instruments—touching on everything from whiskey to private equity, and the post-COVID challenges of brick-and-mortar ventures.
We're talking fast returns vs slow burns, dollops of personal experience, shifts in trading strategies, and the essential understanding that true wealth is the perfect blend of time and money.
So pour yourself a cup and join the conversation that goes beyond the traditional 60/40 stock-bond split, into a world where strategy, risk tolerance, and paying yourself first isn't just smart—it's Rebel-smart.
All this, plus our take on cancel culture and the 'woke' movement—all distilled into one must-listen episode. Because in trading, just like in coffee, it's all about the right mix.
Get ready for the buzz as the Rebel Traders, Sean and Phil, serve you an eye-opening shot of financial wisdom, right here on RT286 of the Rebel Traders Podcast.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Hey there. And in today's show, we're gonna be embracing
diversity in modern training strategies. My pronouns,
officially long and short. Rebel Traders takes
you inside the world of 2 underground master traders who take an entertaining
and entertaining and contrarian look at the markets to cut through the
noise of Wall Street and help you navigate the trading minefield.
(00:23):
Together, Sean Donahoe and Phil Newton are on a mission to give you the
unfair advantage of a rebel trader. And now, here are your
hosts, Sean Donahoe and mister Phil Newton.
Alright. We we we were skirting along there. Well, we were
skirting it, danced upon it, and and kicked it kicked the dirt over it
there. We're gonna offend someone today with this show because I
(00:45):
just can't help myself. But, I think, mister
Phil Newton is here as always, and he's chomping at the bit
as well. He was telling me some funny stories that I won't share
before we go, or before we went live here, but
we're kind of doing a double duty, podcast today because we're
releasing 2 episodes on the same day because
(01:09):
we had a little technical snafu with last week's publishing. The
recording was fine. It was the publishing and processing that went
askew. But, so we're gonna we're gonna drop
2 for the price of 1. It's a it's a 2 for Tuesday even
if this is recorded on a Wednesday. So, Phil, how are you
doing, sir, before I go off on a Doing fine. I'm resisting the
(01:30):
urge to stop this session giggling like a little schoolboy
again. Or is it schoolgirl, school schoolperson, a
schoolmate then?
Yeah. There's so many so many You started this show. You started this on this
soapbox. Don't even get me on this, whole cancel culture,
you know, woke soapbox because I should have been canceled freaking years
(01:53):
ago. I don't care about offending anyone was not
our intent. I'm just gonna be very clear about that, but we are who we
are. We're all farts. You know, we're not part of this whole bloody
new gen. We are not part of the Woke Brigade, unfortunately. Or
fortunately. It depends on your perspective. I'd
say bloody fortunately for that one because I got Fortunate. I'm too bloody
(02:17):
busy to to worry about all that stupid shit. But,
anyway, we are talking about the concept of diversification,
which is all about you know,
look. It's going to be beyond the whole 60,
40 stop bond split and all that stuff, you know, when, you
know, as a seasoned trader, you know, we've come to appreciate the
(02:39):
value of mixing things up, diversifying in
different areas, not just the
market, but also, I would say, time frame, strategy, environment, and
a lot of different things. So, Phil, where do you
wanna start with this one? Because, I mean, this is continuing our
12 rules of rebel trading, and this is number 8
(03:02):
in the series. Yes. We're on the 12 rules of rebel trading. We're
currently on rule 104.
Sounds about bloody right too. Does it I
was thinking about this kind of after the fact as Scott was
reviewing these kind of this particular mini series.
(03:22):
And there's always a number one rule, and
it's the first rule, then the the next first rule. And
there's quite literally a long list of first rules of trading.
So, yeah, take away the pinch of salt. 1 to 12, currently
on rule 104. But this one
revolves around, diversification
(03:45):
when it comes to financial assets in the markets.
And it it it really is
I've never understood, Sean, that the 60 40 stock bond
splits that traditional way of doing it. So I can't wrap
my head around it, to be honest. And I know for a lot of people
applied in the fifties, but you hate not I mean, for for a lot of
(04:08):
people at work, I know people that do it, and they make it work. But
it's a place to park cash when you've got that strategy, when you've
got nothing else to do with it. That's what you're allegedly
supposed to do. But if you look at the performance of
that over the last couple of years, it's kind of
broken down. It's not worked the way that it was
(04:31):
expected to work because the the logic behind it is that the stock market's
underperforming, bonds will start to perform and vice versa.
You've got this hedged
portfolio with a very loose and basic interpretation of it. So
I don't necessarily believe in diversification in the traditional
sense. I would rather be looking at other
(04:53):
things to do with my money when it comes
to strategy. And kind of both our defaults have been just
by a happy little accident, Sean. Because what we I think the funny thing is
before we actually met and became friends, we were kind of going this
parallel track with our own journeys of
trading. And then when we kind of met up oh oh oh, yeah. Oh, yeah.
(05:15):
Oh, yeah. Oh, I do that. It was that whole Spider Man meme right there.
Yeah. We don't point it to each other. So
we kind of came to a lot of similar conclusions. That's probably, I mean,
to be fair, with similar personalities, probably not unsurprisingly involved in a very
similar way when it comes to strategies and what we want, our likes and dislikes.
So a a lot I suppose as well, a little bit of
(05:38):
a a a detour as well, Sean, before we get right into it, is
a a lot of these things are driven by your personality.
And I'm emphasizing your, you know,
underscore it a few times because my preferences
are, to be fair, while similar, are different to Sean's
preferences. Simply put, we're in different
(06:00):
locations, and Sean's just moved, so his priorities have just
changed. So based on just some basic
geography, the way that you
deploy your assets is gonna be a little bit different
because of, hey. Maybe the legal structure's gonna be a little bit different so that
it's more tax efficient. And just those things are personality
(06:23):
or personal preference driven. So,
again, these are the things that kind of influence, what
we do and how we do it. Again, my, again, default stance when
it comes to diversity is strategy diversification. For many,
many, many years, I've always ran multiple
strategies. And you can have the
(06:45):
same strategy on different assets as well and across
different time frames. So just a few illustrations of you know, you
can be, for example, like I'm
reduced the number of assets that I'm looking for in the short term, but I've
also kept that diversity with the time horizons that
I'll trade essentially the same strategy. So let's for example,
(07:07):
2 or 3 strategies on 2 or 3 instruments with 2 or 3
time horizon. You know, 3, 3, and 3, you've got 9 different iterations. So you
can be long in the, kind of the the let's just
call it the long term. You can be flat in the short term, and you
can be bearish in the medium term. You know, you know,
any combination of all of these things. So it just gives you a little bit
(07:28):
of diversification for what the markets
are doing. And that's how I like to start the conversation
with diversification, Sean. Absolutely. Well, I think about
my diversification. Not only do I diversify in strategies,
but I have I call it the the triangle.
I have stock and options, obviously. I
(07:50):
trade, mainstream crypto. And right now, I've even
stripped that down from 20 assets I look at down to the main
4. And then there was liquid ones that have momentum
and, you know, trend very nicely. It's Bitcoin, Ethereum,
Solara, and BNB. Those are my 4 that I look at.
And then from that, I've also got micro caps. And the
(08:13):
thing is if one is lagging behind the others, well, I switch
my focus to those other assets.
You know? You talk about the the 6040 bond split. Funnily
enough, mine is 60% stock and options,
30% mainstream crypto, 10% micro
caps. That's my you know, I wouldn't say it's it it it it's
(08:35):
a happy accident. It's that kind of 6040, but it's
not intentional. It's just the way it's naturally flowed and
ended up in that kind of same ballpark. But I'm using,
crypto, which again is blowing up more recently since, you
know, 2023 into to now and has gone absolutely
bloody crazy. But with that, you know, it doesn't matter if
(08:58):
it's the the market's going up, down, sideways. There's money being made
everywhere, and I can put my focus and attention in those
different diversified sectors. And
one's always moving very nicely in my direction or
sometimes altogether. And, again, you know, that's
that just allows me to amplify because some markets have more
(09:20):
volatility like micro caps. Shoot. I could do,
anywhere from a 1000% return on capital in a day
on depending on the the stock or also the actual coin or what have you
I'm I'm doing. I mean, my my record is 32,000 percent
return on capital. That's a happy bloody day. Doesn't happen
often. But when it does, great. I'll take that cash and
(09:43):
sweep, move it into the other asset classes for longer
term returns as well. So that's why there's a You raise an
interest in point there, Sean, as well. Those the big wins
happen. The the undeniable. They've happened for you. They've happened for me.
But you're not aiming for that every trade, are you? It's it's one of those
we'll let the market give what it gives us or take what it takes from
(10:04):
us. You know, that that that's how we kind of view our trading. But
then from time to time, there will be the big win. So you've gotta have
a finger in the pie to see how to see how how much filling there
is in it. You know, I don't know where that best of all is going,
but you got so many ways we could take that. Yes. Let's move on from
that one quite quickly. But it's an interesting point, Sean, isn't it?
(10:24):
It's you're not hoping to swing for the fence yet. I think that's
also an important thing to consider
when it comes to the the the the trading
opportunities, the diversification, if you like. You know, you're not putting a
huge allocation in a higher risk asset
to, you know, win big on every trading
(10:47):
choice. No. You know, it it's not a realistic prospect. I
suppose to, you know, the real world business, Sean,
it would be like starting up business today,
with, you know, a few $1,000. And then this time next
month, you've got a couple 100,000,000, you know, in revenues and
turnovers. And while it has happened in the past, it
(11:08):
doesn't happen with every business. You know? So the the the
you understand that when it comes to the real world of bricks and mortar
businesses. But for some reason, as soon as you step into the world of
trading, that reality just gets completely forgotten
about. It really does. I mean, we, you know, we talk about
how we I mean, at one stage, Phil and I were
(11:32):
starting to consider diversifying back into brick and
mortar businesses, taking large swaths of capital that we've accrued
in our different trading accounts and our capital management asset
portfolio. And thinking, okay. Let's go buy up businesses. Let's
go buy up brick and mortar businesses, which I had done
in the past and, you know, done, turnaround business and
(11:54):
consultancy, got equity in different businesses and all sorts of other
things. But it became a major pain in the ass. Now that's an
option for diversification, but then
a lot of what we decided and I think, you know, me personally, certainly, I
think Phil did as well, was we have our rule of
thumb. Is is this unhustled? And the answer is Is this No. We're just
(12:16):
buying time solids. Yeah. Yeah. Is this is this just buying
headaches or buying hassles and bullshit? And for me, it's like,
no. I had to divest myself. Certainly post COVID,
I'm not dealing with brick and mortar anymore. Just it's just the way of
it. It was a painful lesson during that time. And,
yeah, I I got out of it. Exactly. During that time,
(12:38):
everything everything was up in the air, Sean. So we were exploring
to to be fair, pre COVID, we were exploring the concepts and ideas anyway.
But then COVID obviously hits hard and hit everyone. And so it was all up
in the air. You know? What what's the world gonna be like? You know? And
you're just trying to figure out what was going on at that time. So, yeah,
we're both exploring a variety of different new ideas and
(12:59):
concepts that, you know, we'd never really considered before just because, hey, you
know, we're all we're all stuck in the house together, and we've all got to
thinking about ways of ways of, you know, living in this, you
know, new world. And we didn't know how long it was gonna last. It was
a crazy, crazy time. So diversification, Sean, I think we're
both in agreement. Some sort of strategy
(13:20):
diversification. And I think it's also interesting to consider. It
could be nonstop markets
diversification can be included in this category. You could be
buying physical businesses, which seems to be a hot button at the
moment. I'm sure you've seen a lot of adverts and promotions for
various people saying, hey. You know, we've got this, you know,
(13:42):
business buying 0 money down, you know, on I've been in
a few of those programs and and to see what they're doing. Doing due diligence.
I think it's fair to say that while they do happen, you know, it's no
money out of pocket might be a better phrase, not necessarily no money
down. You can use other people's money. Anyway,
Steve don't get us started. Soapbox time.
(14:05):
So so diversification, it can come in a variety of
forms, you know, whether you're buying a share of a company,
in the stock market or a share of an asset when it comes
to, cryptos. You were saying that, Sean,
you've got a high risk allocation. You could also diversify
with actual businesses and, you know, getting a portion of,
(14:28):
what essentially is private equity, a private share, or a percentage
of performance. Again, that's gonna depend on your skill sets. You know, if you've not
got the the skill set to offer consultancy and performance based
returns, then, you know, maybe it's not a a a fact that you wanna consider
at this stage. But you can look at other things. I I've been
looking at so I I I tend to get, a mailer about,
(14:50):
whiskey investments for some reason, Sean. So
you can you can do this nonclassical
asset class of alternative investments.
I think that's also worth considering. So I I think just at this high
level, Sean, we've got this broad spectrum of things that
we could do. But then as we started off our conversation,
(15:13):
it's what you want to do, and that's gonna be
flavored by personal preferences. You know, do you want
to be, you know, involved or passive? You know, do you want
a payout cycle in 50 years or
5 years? That might depend on your age. You know, you know, as
I kind of, you know, crest another,
(15:35):
hill in life, you know, my time
horizon is getting shorter, but at the same time,
my patience is also longer. You You know, in an ironic twist, yeah, I might
be prepared to wait 30 years for a pay, but at the same time, you
know, like how I got 30 years left. You know?
You know, you start thinking about these things. So you've a
(15:57):
lot of these diversification issues, they're all flavored
by the preferences, what you want. And to be fair, what you know about could
also be a fact. I mean, that there's new technology, Sean. I mean,
certainly the US tends to get the the the the the first round of
things. You could certainly be a fractional investor
in property. Now let me say that a fractional investor, you don't need
(16:19):
100 of 1,000. And a lot of these things are US based, which is
great. You could go and invest couple $100
like you might, put a couple $100 every month
when you do this, you know, buy the S and P
500 or the Global Equity Index. You know? And you just put a couple $100
every month. You could do the same thing with property, but you rather than put
(16:41):
a lump sum in, you can again be a fractional investor
as a part of a, I'm trying to remember the name of this company, Sean.
But, you know, there's a variety of them where you can, you know, go
and invest in property schemes. You don't have to be hands on, and it's
super passive in that regard. Yeah. And one of the things Are you
thinking of talking about REITs or the different variants on that? I can't I can't
(17:04):
it probably is REITs again. The the terminology is a little bit different in the
UK to the US. But, yeah, there's
websites and there's directories, etcetera, of
companies that you can go and invest in that will go
and then manage that on your behalf. But you can get the buy
ins minimal, Sean, is all I'm trying to get to. Mhmm.
(17:26):
Again, nonstandard asset classes, you can buy
and sell debt. Again, there's platform in the this is revolutionary stuff, Sean,
compared to when we started out. The the opportunities for
starting out as an investor, were very minimal
unless you had a huge buy in. But I remember
the, peer to peer micro investing, Sean. You know, that you
(17:48):
know, pretty common these days, you know, to get a a payday
type loan, but you can do it peer to peer, which is,
you know, revolutionary. If you wanna lend 50 quid to someone
via this, you know, portal, you can do it, and you can collect
interest. Same thing with, tax liens is something
that always fascinates me, Sean. Again, completely unique to the
(18:10):
US. No one else in the world has this. It's, you know,
fascinating. So, again, diversification
comes down to what you want, what you know about, how much time do you
wanna invest. Do you wanna be elbows deep and actively managing, or
do you want to be passive? And then that's going to then dictate
what you go, further into, investigate, and kind of map out
(18:33):
the next the 5 years, the next 10 years, the next 15 years of what
you want for your, asset allocations. You know, I
would also, like to take a a little bit of a step back
is why would you want diversification if you're, you
know, in one area and you're doing very well. Why would you
want this kind of diversification? Some investments move
(18:54):
slower. Some diversification
creates, you know, different risk profile. But why would
you want to do it in the first place? What is diversification at
the end of the day? What does it do for you? What are the benefits?
So a lot of people, listeners, talking about hate REITs and buying and
selling debt and flipping out. They're like, this is a fucking trading
(19:17):
show. What what are you all about? Why aren't you talking about trading? Well, the
thing is and this is something that Phil said years ago, and
I've always laughed about it is, I don't care what
we do if it's making money. And one thing Phil
flippantly threw away is, I don't care if it's whimsical way of saying
this. Yeah. I've I don't care if it's more profitable putting
(19:39):
any bears on eBay. That's what we would be doing.
And it's not so much the vehicle, so to speak.
It's the what's the return and the speed of return?
That's 2 critical factors for me, which is why brick and
mortars and even real estate right now. I mean, I had my fingers in
a lot of different real estate, commercial real estate. And
(20:03):
that, again, slow rate of return, It can
accrue big numbers. You can leverage that debt. There's all sorts of different tax
advantages you can do from that. But at the end of the day,
it was a pain in the ass. And my rate
of return could be 12% a year. You
know, 12% a year. And that was with cash flow and all the rest.
(20:28):
I'm like, I could do that in a week. What the
fuck? Why am I why am I worried about that? And
then, you know, swinging swinging a big dick just saying, hey. Look. I've
got all this real estate portfolio. Who gives a shit? It's
only 10% a year. What can I do with that money that's
fucking faster without all the overhead liability,
(20:50):
the dealing with tenants, dealing with property management, dealing with
banks, dealing with all the paperwork and the tax headaches is
like, I'll just go put it over here? I'll watch it go up 10%, you
know, in a couple of days and take my money out. Okay. Good. Now
what? I'll do it again. Okay. I'll do it. Lay claim. Can't lay
claim to this this phrase, Sean, But, I'll try and dig
(21:13):
out so we can give the the attribute to it. But I heard it a
few times over the years in a variety of different ways. But it's
like the response to all of this is
all all of that sounds really great, Phil. You know? But I realized that I
like making money more than faffing around with all of that.
(21:33):
So, you know, what and again, it comes back to this is the personal preferences.
You know, if you if if your expectation is, you know, I'll make some money
in 3 months, 6 months, 12 months, 5 years, 10 years, that's great. But if
you have got a system that can pay out quicker, that's the benchmark. But if
you have got a system that can pay out quicker, that's the benchmark, you
know, and we've heard we said last week, and not all, it's we've heard this
week, if it depends on when you listen to us. When you listen to us
(21:54):
in the future, on the previous episode, we commented
on, like, we've just been through quite a revolutionary shift in our own trading,
you know, because with new products that come in the
financial markets, new ways of trading that were just never
previously available 5 years ago in the way that they are
today. You know, 6 months ago, I made a radical change. Sean's done a
(22:16):
similar radical change to shift from,
essentially swing trading over 30, 60, 90 days, which we still
do, but the allocation is switched from that's the primary
vehicle. Now it's daily and weekly SPX,
income options. That's now the primary driver. It took several months to kind of
unwind all my other positions and reallocate. But it's just
(22:39):
literally flipped everything on its heads. You know? And instead of
waiting 30, 60, 90 days for a possible payout
on 30, 40 positions and trying to juggle and manage
that, to be fair, by comparison headache, I can now do 2 or
3 positions every other day or
every week, you know, and by comparison make the same type of
(23:01):
results in a very short space of time, you know, 3 to 5 days
versus 3 to 5 months. You know, it's a very different situation.
And the the effort involved is significantly less.
So, of course, I'm going to make the shifts because the lens that myself and
Sean are always filtering through is, is it going to be more of a headache
or less of a headache? Is it more time or less time? And that really
(23:22):
is the first kind of filter that we do. Is this gonna suck all of
my time? Okay. Well, the returns might be like you said, I might be making
10% a year passively, or I'm making
10% a year doing 60 hours a week. You know,
which which is which is better for you? You know? Well, hey. Well,
you know, if you if you're a workaholic and you like, you know, being involved
(23:45):
elbows deep all day every day in the thing that you're doing to get the
return that you want, Great. Go for it. I'm not saying don't do it,
but it's not for me. You know, and that's what we're trying to figure out
when it comes to diversification. We've got alternative investments,
cryptocurrency, real estate. We've got strategy diversification, data
trading, swing trading, long term investment approaches. You can dance the same
(24:07):
strategy up and down the time frames, which is usually what I like to do.
And then you've got geographical considerations, tax considerations, global
marketing. What do you wanna be involved within this
modern diversification,
opportunities, I suppose, is probably a better way of describing it rather than
put a pin in any one individual thing. Yeah. Absolutely. I
(24:28):
mean, at the end of the day is where is your money
best served based on the outcome of McGuire, Sean. You missed it.
I know. I know. I'm just I'm just thinking because the impact here is
it it really comes down to, like you said at the very start, personal preference.
Where and, you know, I'm think it's funny. There's,
(24:51):
a And I think most new traders just to put the contrast in sorry, Sean.
Just to jump in. Just put that contrast in. Most new traders
go, what's making money? And great. You know, everything
works some other time, and they don't have that appreciation. But, well, what do you
wanna do? You know? And that just changing the priority
of the questions, is gonna have a radically
(25:13):
different outcome. No. It's very
true. And it's funny because the for
me, it's what do I wanna do with my time
and my money? And time and money are the
two elements that create wealth. You can have all the time in the world and
no money. That's not great. You can have
(25:36):
all the wealth and the money and no time. That's not great. But if you
have the 2 together, the time to do whatever you want and the
resources to do it, that's true wealth. And,
there's a gentleman who used to be a client of mine,
Pretty popular in the, I would say,
the woo woo space. Joe, I knew you were gonna talk about
(25:58):
this. I was thinking, is he gonna go woo woo? Yeah. Yeah. It's,
it's He's gonna say woo woo. 90 books. He's been on if you've read the
movie, the secret and everything else. I won't name drop because it's not cool. But
there's one thing that he talks about a lot, and it just popped in my
head. And I don't know if he was the original creator of this, but I'll
give Joe Vitale, you know, thread it where credit's due and he can pass
(26:20):
it along. But one of the things he talks about is
money loves speed. You know, is
how far do you wanna push? And there are always
the problem is a lot of people get stuck in the quicker,
you know, they they do the they they they want really, really fast
(26:41):
returns, so they'll take really, really big risks and get really, really
burnt in the ass. There's the really, really slow traditional
methods, which are a lot safer, but, again, slower rate of
return. Trying to find that balance of reality in the
middle and the strategies that work, strategies that don't,
again, that comes down to personal preference and flavors and all the other things that
(27:03):
we've talked about, plus your psychological,
acumen, so to speak, your mental toughness, and what your risk
profiles are. And, you know, some of
that, you also need that helping hand and guidance
to show you how to do it without getting burned and stuff like that,
without getting your panties in a bunch every time something goes
(27:26):
right or wrong. And you know what? It's it's no one can
no one can tell you what's gonna be best for you. All you can do
is stick your toes in the water and see if the temperature's
okay. You know. And then, it's a little cold, but I can deal with
it. Now it's getting a little warmer and okay. Fine. So
for a lot of people is while money loves speed, I personally, you
(27:47):
know, what is the quickest but proven way
to get to a certain point? For me,
I'm not a patient person. I don't wanna wait. You know, the the
rule of 7, which is, you know, hey, if you get 10% return, you'll double
your money within 7 years add compounding and all that kind of bullshit.
(28:08):
I don't wanna wait that long. I wanna see, okay. Well, what is
within my higher risk tolerance able to
flow? How aggressive can I be?
If I lose that, do I have a Sounds like a new character on DuckTales
Shop. It does. Doesn't it? Yeah. Does
funny shit. I have been called
(28:30):
worse than Scrooge McDuck. Yes. But, there's a lot of
different things that you have to decide for yourself is what is
your outcome you want and what with the strategy
strategies you have available or that you know or you can apply
is gonna get there. And then what has to happen within that
framework to make that happen in a measurable,
(28:54):
progressable way that you can track, build
on, compound into, and
accelerate that. I mean, a good example, and it's a
mathematical example, is okay. Some people start their
trading and they have, like they they'll do a cash allocation. Say, I'll
just use simple numbers. $1,000, that's their starting
(29:15):
pot, and they're gonna trade that and grow it over time. But the
way to 10 x that is add in an
extra 1,000 every month just like you're adding into your own
retirement plan. Now the compounding effect of that
over 3 years, 5 years, 10 years is
insane. You get to, you know, if you were
(29:38):
just having a consistent 10% return, just to use simple mathematical numbers,
this is a mathematical example. And this is the principle of dollar
cost averaging that we were kind of bouncing around a little bit and actually say,
isn't it? Yeah. Yeah. Every month, you put in an allocation. You do the same
thing with your strategy. And if you've got something that works, you know, you can
book $100 in, $500 in, whatever your number is,
(29:59):
whether it be real estate investing strategy. But if you do
that, you've got the, you know, the double effect of
compounding, is it? It's a yeah. It's a force multiplier for compounding, and
you will get to whatever your number is 10 times faster. Most people
don't think about treating and I'm waving a pen like it's a magic freaking
Harry Potter wand here. But the at
(30:20):
the end of the day, people don't consider investing more into
their business to help accelerate the growth. They just wanna
do the initial allocation. That's it. You know? And
and I'm just like, it's a business. Invest in it. Treat it like and this
is this is one thing, you know, from a money management set. And I do
this in in businesses. I do this for personal finance as
(30:42):
well, is pay yourself first. Tax yourself.
You know? The government's quite happy to tax you. Tax yourself.
Don't think of it as a tax, though. Think of it as an investment. It's
an allocation to your future. Take 10% off the
top, put it over here, you know, find a way to, you know,
take 10% and and of your gross income
(31:04):
and put it over here. Cut back on a couple of things if you need
to. Make a couple of sacrifices because that will pay you so much
more dividends in the future that, you know There was a price of coffee at
the moment. You can brew it yourself. You know? Bloody
right. Since since the, the mock down
that we had, literally, the price of coffee
(31:26):
has almost doubled in the UK. Then you've also
got, I don't know if they have it in the US, but
we've just, again, jacked up the sugar tax. Now I don't
know about you, Sean, but on the rare occasions that I do buy a can
of Coke, all the products are available, I might ask. But on the rare
occasion that I do, it's like I want proper
(31:48):
Coke. I don't want the diet nonsense because it's
it it it it doesn't doesn't make sense. You're
it's still full of shit. You might
as well put the put the the proper shits in. That's all I'm saying.
But then you get chance for the privilege of it. So anyway, the put the
point is did you save a cup of coffee? You know, it it it it's
(32:09):
a silly little thing. Cup of coffee a day. What is it? 5 $5, $8
a a cup in the US. It's it's almost £4,
like shiny pennies in the UK. So that's about 6, $7.
In a you know, say say book instead of 2 cups of coffee a day
out, you know, but, you know, buy 1 and save 1. You
(32:29):
know, it it can be a simple little thing just to get the
ball rolling. And you'll think about those little
$5 here, $10 there. You know, one of the things I
like, Sean, is I I sign up for these, these money apps, and everything
I do goes on cards. I hate carrying cash. I always have them.
But you've got this save the change feature on
(32:51):
most banking apps now. So if it's, you know, 495,
it'll round it up and save the change. You know?
And you can be surprised at how how much
those those little $3, $4, 5 that, you know,
those 50 pennies here and a dollar there, you know, they
adds up quite dramatically. And then you can do
(33:14):
something with that. You know, just save that change. Start small,
and then you can kind of have that compounding effect for
maybe not necessarily the trading show, but maybe that can be the
start of the, the alternative investments, you know, the the other stuff
that you could do. Because there's a a a mountain of things that, you know,
to be fair, interests and fascinates me. And the criteria, as we've
(33:37):
always said, is is it worth my time? Is it worth my money? And
if the answer's no, then, obviously, it just goes in the idea pile
for me, Sean. Yeah. No. That's exactly right. I mean, I have stacks and
stacks of books. I I use Evernote as as my
second brain. And every time I have this great idea or a synoptic, I thought,
this is a great idea. And then, you know, after the excitement of
(33:59):
who's new, which we all have,
it's it's like, okay. Well, I've slept on it. You know, it's been a few
days later. Is it time, money? You know, what what's better. Okay.
Carry on doing what I'm doing because, okay, it's gonna take time to build them.
You know, maybe maybe I'll do something with it. I mean, to be fair, the
one thing that does interest me, Sean, just simply because it's not available anywhere else,
(34:20):
I keep coming back to tax liens and tax re the is it the liens
and certificates? I find that fascinating because
it's I and, you know, if you're familiar with this in the US,
forgive a complete noob in the UK who's just heard about it
because it doesn't exist anywhere else in the world. You can
lend money to someone temporarily and have it
(34:42):
government backed. That's that's seems rebel. Why
wouldn't you do that, Sean? And it's completely
passive is what I like about it. Yeah. There's all sorts of
different things that crack me up in terms of what you can,
what you can't do, what vehicles are available. And half of
it, you know, I kind of like, is this legit? Is
(35:04):
is there what what's the catch? Because, you know, I I I'm
a I'm like the world's greatest bloody skeptic in in a
lot of these because I've seen every level of bullshit, something with
financial instruments come through my desk. And you're just like,
this is just a Ponzi. It's a wrapped Ponzi with a new name, you know,
and stuff like that. And it's a case of,
(35:26):
alright. Okay. Is there a real thing here? Then I start, you know, I'll
start talking to some smarter friends. Because here's the thing.
I wanna surround myself with people who are far smarter than me in financial
instruments. I don't wanna be the smart if I'm in the smartest person in the
room in regards to that, I'm in the wrong fucking way. Room. Yeah.
Exactly. And so I wanna find out who knows more. I mean, this
(35:48):
is why I got into real estate was I started networking with millionaires and
billionaires who had a quite a large
real estate portfolio. And I'm looking at them. It's like,
what are you doing? Like, here. I've even dabbled with it
here. Okay. And I'd say dabble with the idea. I'm not dabbling
because for a a flying, you know, a foreigner here can't
(36:10):
own property, but companies can.
So create companies and look at that. But I'm looking at cash flow because
a lot of the American real estate methodologies
don't exist here in Thailand. So my
brain's going, what if
I look at what was going on in America, what I can do in America,
(36:33):
and the methodologies and that? How would they apply here if
no one's thinking about it or no one's doing it? First of
all, why? What's the opportunity? Is there an
opportunity? What kind of financial lending is available for
this kind of thing, and I started down that rabbit hole. 6
months later, it's not really possible here. That's why because
(36:55):
of financial market regulations, government controls, and all sorts of other
things, it makes it a lot more difficult than it is in America.
Okay. But now I am aware of what the situation is. And
if that situation changes, then guess what? Sean's already got a
battle plan to gobble up massive amounts of,
you know, small real estate here. Single family
(37:19):
homes. You'll draw your swords and shout at the top of your voice by the
power of Grayskull and charge head first into the opportunity.
Yeah. It's it's it's not He Man. It's Batman. But, yeah, there you
go. I've got the kittens instead of battle cat. It's not gonna work out
very well. But, you a full kitten. Yeah. But funny
enough If you you're in just selling, though. The funny thing is
(37:42):
here, just as a just as a kind of sidebar, is what's
called house shops. They're 4 story,
single column. They've got a shop in the bottom and then 4
stories of, homes available. But
you you buy the house, cost a lot of money
because land here in Bangkok is fucking expensive. It's about 4
(38:05):
times. And center of Bangkok, it's, like, a 100
times like in Texas where I was.
But that land, the cruise doesn't tend
to go down, but you but you lease the shop, you lease the
houses, and continuous cash flow. And it's just
continuous cash flow and equity forever. And you you can you
(38:28):
don't have, like, 1031, lien exchanges with, you know, tax
exchanges where you don't get taxed on that. You move it into other properties. You
don't have that per se here, but you can get really good
financing opportunities, and the banks don't like
foreclosing. They will work with you on different payment terms.
Very lax here in that regard. So I was thinking, okay. Where's the
(38:50):
opportunity? There's an opportunity, but now
where's the headaches? Where's the hassles? And it comes down to regulation and
some of the stuff. Yeah. Speak up. Speak. Yes. So, yeah, I mean, there
there's a lot of different things that when you start looking into learning,
I use it as my spare time analysis of which I've got
plenty. Is, you know, is is okay. What else
(39:12):
is an opportunity, and what's the rate of return? And, funnily enough, I
end up coming back to the stock market and just saying, yeah. I'll just I'll
just change my allocation or I'll just add more to the portfolio here because
it ends up being a lot less hassle. But it's
it's interesting rabbit holes that we dive down. And we've gone completely off the
bloody script and the plan for the show. I hadn't noticed, and I
(39:34):
I thought we're completely on track, with our
But I think it's a good point to kind of I don't think it's a
bucket. Okay. I think it's good to explore. Looking back at the show notes, is
there anything you wanna pull from that that we haven't covered?
Yeah. I I I think just generally speaking, it
it's sometimes more than trading.
(39:56):
As we've said several times in the last few, editions of
this short miniseries, it's sometimes that the
the decisions that we make are not necessarily trading related
directly. You know? A lot of things are,
you know, personal preferences. They're gonna be situation. They're gonna be geography that
you know, there's a whole variety of things that influence it. So we can
(40:19):
still all be doing the same thing, but it's going to be approached in
a different way at these higher levels, the decisions that we make. Again, we always
filter through time. And, you know, is it going to be a time so
called not? You know, that is the first priority for everything that we do and
the decisions that we make. So diversification, Sean, you
know, it it's there's a lot of stuff out there. Do you wanna do
(40:41):
it? Do you have to do it? Do you need to do it? What are
the time horizons to consider? And then then you
can explore what might be the right thing for you. And again,
in the US, we've already established. There's lots of opportunities in the US compared
to just Europe. And then there's there's there's equally other
opportunities that are not available elsewhere depending on where you're in the world. So
(41:03):
do you wanna be, you know, allocate time to it,
or do you wanna allocate resources to it? A little bit of both. And then
you can turn those dials, as we like to say. You can kind of speed
things up, slow things down. That's gonna flavor to swipe
Sean's thing, which I quite like it, Moe. That's your flavor of ice cream, baby.
That's a bloody word, mate. So alright. Diversification. It doesn't
(41:25):
matter what you're doing, recognizing where you are,
what your needs are, what your requirements are
for risk diversification, money diversification,
you know, geographical diversification, time diversification,
what you're looking at in terms of where you are in the world environmentally,
(41:46):
governmentally, regulatory, you know, technology
available, behavioral, situations. There's
so many different ways to diversify not only your
portfolio, but also your risk and your brain as well.
One thing, I'll just put, you know, before we wrap up and
and a last thought that popped in my head is I like
(42:09):
diversification to keep my interest.
Because trading is boring as shit. It really should be. I mean, we
try and put a laugh and a spin on it, but training trading
should be boring. It shouldn't be an excitement driven,
avid because that leads to bad psychology as far as I'm concerned.
It should be boring. It should be functional. It should be a production line process.
(42:31):
You know, effort in, money in, profit out, and
that's it. It shouldn't be anything more than that. But because it
does get boring, I also like to just be aware
of different areas of finance and opportunity just to have my
finger in the pie, so to speak, and see what is out there,
from just a an educational standpoint as well.
(42:55):
So for me, there's all sorts of different reasons to diversify,
but as Phil reminded me,
depends on what flavor of ice cream you like. So go stick
a, what's it, a flake 99 on the top, little bit of
sprinkles, little bit of cherry syrup, and enjoy.
Don't get to hold the nuts. Yeah. There you go. Absolutely.
(43:17):
Absolutely. So with that being said, rock and roll, see you same bat
time, same bat channel next week. And, Phil, as always
See you same time next time myself, but, Tulu Trader, bye for now. There
you go. Adios, amigos.
For more cutting edge trading advice and a free trader workshop to help you
build a personalized trading plan and make smarter trading decisions,
(43:40):
go to tradecanyon.com now. Futures, options on futures. Stock
and stock options trading involves a substantial degree of risk. It may not be suitable
for all investors. Past performance is not necessarily indicative of future results. Trade Canyon
Incorporated provides only training and educational information. If you actually understood and listened to this,
then that means you are awesome. Congratulations and well done. Notice, this product
may contain nuts.
Hey there. And in today's show, we're gonna be embracing
diversity in modern training strategies. My pronouns,
officially long and short. Rebel Traders takes
you inside the world of 2 underground master traders who take an entertaining
and entertaining and contrarian look at the markets to cut through the
noise of Wall Street and help you navigate the trading minefield.
(00:23):
Together, Sean Donahoe and Phil Newton are on a mission to give you the
unfair advantage of a rebel trader. And now, here are your
hosts, Sean Donahoe and mister Phil Newton.
Alright. We we we were skirting along there. Well, we were
skirting it, danced upon it, and and kicked it kicked the dirt over it
there. We're gonna offend someone today with this show because I
(00:45):
just can't help myself. But, I think, mister
Phil Newton is here as always, and he's chomping at the bit
as well. He was telling me some funny stories that I won't share
before we go, or before we went live here, but
we're kind of doing a double duty, podcast today because we're
releasing 2 episodes on the same day because
(01:09):
we had a little technical snafu with last week's publishing. The
recording was fine. It was the publishing and processing that went
askew. But, so we're gonna we're gonna drop
2 for the price of 1. It's a it's a 2 for Tuesday even
if this is recorded on a Wednesday. So, Phil, how are you
doing, sir, before I go off on a Doing fine. I'm resisting the
(01:30):
urge to stop this session giggling like a little schoolboy
again. Or is it schoolgirl, school schoolperson, a
schoolmate then?
Yeah. There's so many so many You started this show. You started this on this
soapbox. Don't even get me on this, whole cancel culture,
you know, woke soapbox because I should have been canceled freaking years
(01:53):
ago. I don't care about offending anyone was not
our intent. I'm just gonna be very clear about that, but we are who we
are. We're all farts. You know, we're not part of this whole bloody
new gen. We are not part of the Woke Brigade, unfortunately. Or
fortunately. It depends on your perspective. I'd
say bloody fortunately for that one because I got Fortunate. I'm too bloody
(02:17):
busy to to worry about all that stupid shit. But,
anyway, we are talking about the concept of diversification,
which is all about you know,
look. It's going to be beyond the whole 60,
40 stop bond split and all that stuff, you know, when, you
know, as a seasoned trader, you know, we've come to appreciate the
(02:39):
value of mixing things up, diversifying in
different areas, not just the
market, but also, I would say, time frame, strategy, environment, and
a lot of different things. So, Phil, where do you
wanna start with this one? Because, I mean, this is continuing our
12 rules of rebel trading, and this is number 8
(03:02):
in the series. Yes. We're on the 12 rules of rebel trading. We're
currently on rule 104.
Sounds about bloody right too. Does it I
was thinking about this kind of after the fact as Scott was
reviewing these kind of this particular mini series.
(03:22):
And there's always a number one rule, and
it's the first rule, then the the next first rule. And
there's quite literally a long list of first rules of trading.
So, yeah, take away the pinch of salt. 1 to 12, currently
on rule 104. But this one
revolves around, diversification
(03:45):
when it comes to financial assets in the markets.
And it it it really is
I've never understood, Sean, that the 60 40 stock bond
splits that traditional way of doing it. So I can't wrap
my head around it, to be honest. And I know for a lot of people
applied in the fifties, but you hate not I mean, for for a lot of
(04:08):
people at work, I know people that do it, and they make it work. But
it's a place to park cash when you've got that strategy, when you've
got nothing else to do with it. That's what you're allegedly
supposed to do. But if you look at the performance of
that over the last couple of years, it's kind of
broken down. It's not worked the way that it was
(04:31):
expected to work because the the logic behind it is that the stock market's
underperforming, bonds will start to perform and vice versa.
You've got this hedged
portfolio with a very loose and basic interpretation of it. So
I don't necessarily believe in diversification in the traditional
sense. I would rather be looking at other
(04:53):
things to do with my money when it comes
to strategy. And kind of both our defaults have been just
by a happy little accident, Sean. Because what we I think the funny thing is
before we actually met and became friends, we were kind of going this
parallel track with our own journeys of
trading. And then when we kind of met up oh oh oh, yeah. Oh, yeah.
(05:15):
Oh, yeah. Oh, I do that. It was that whole Spider Man meme right there.
Yeah. We don't point it to each other. So
we kind of came to a lot of similar conclusions. That's probably, I mean,
to be fair, with similar personalities, probably not unsurprisingly involved in a very
similar way when it comes to strategies and what we want, our likes and dislikes.
So a a lot I suppose as well, a little bit of
(05:38):
a a a detour as well, Sean, before we get right into it, is
a a lot of these things are driven by your personality.
And I'm emphasizing your, you know,
underscore it a few times because my preferences
are, to be fair, while similar, are different to Sean's
preferences. Simply put, we're in different
(06:00):
locations, and Sean's just moved, so his priorities have just
changed. So based on just some basic
geography, the way that you
deploy your assets is gonna be a little bit different
because of, hey. Maybe the legal structure's gonna be a little bit different so that
it's more tax efficient. And just those things are personality
(06:23):
or personal preference driven. So,
again, these are the things that kind of influence, what
we do and how we do it. Again, my, again, default stance when
it comes to diversity is strategy diversification. For many,
many, many years, I've always ran multiple
strategies. And you can have the
(06:45):
same strategy on different assets as well and across
different time frames. So just a few illustrations of you know, you
can be, for example, like I'm
reduced the number of assets that I'm looking for in the short term, but I've
also kept that diversity with the time horizons that
I'll trade essentially the same strategy. So let's for example,
(07:07):
2 or 3 strategies on 2 or 3 instruments with 2 or 3
time horizon. You know, 3, 3, and 3, you've got 9 different iterations. So you
can be long in the, kind of the the let's just
call it the long term. You can be flat in the short term, and you
can be bearish in the medium term. You know, you know,
any combination of all of these things. So it just gives you a little bit
(07:28):
of diversification for what the markets
are doing. And that's how I like to start the conversation
with diversification, Sean. Absolutely. Well, I think about
my diversification. Not only do I diversify in strategies,
but I have I call it the the triangle.
I have stock and options, obviously. I
(07:50):
trade, mainstream crypto. And right now, I've even
stripped that down from 20 assets I look at down to the main
4. And then there was liquid ones that have momentum
and, you know, trend very nicely. It's Bitcoin, Ethereum,
Solara, and BNB. Those are my 4 that I look at.
And then from that, I've also got micro caps. And the
(08:13):
thing is if one is lagging behind the others, well, I switch
my focus to those other assets.
You know? You talk about the the 6040 bond split. Funnily
enough, mine is 60% stock and options,
30% mainstream crypto, 10% micro
caps. That's my you know, I wouldn't say it's it it it it's
(08:35):
a happy accident. It's that kind of 6040, but it's
not intentional. It's just the way it's naturally flowed and
ended up in that kind of same ballpark. But I'm using,
crypto, which again is blowing up more recently since, you
know, 2023 into to now and has gone absolutely
bloody crazy. But with that, you know, it doesn't matter if
(08:58):
it's the the market's going up, down, sideways. There's money being made
everywhere, and I can put my focus and attention in those
different diversified sectors. And
one's always moving very nicely in my direction or
sometimes altogether. And, again, you know, that's
that just allows me to amplify because some markets have more
(09:20):
volatility like micro caps. Shoot. I could do,
anywhere from a 1000% return on capital in a day
on depending on the the stock or also the actual coin or what have you
I'm I'm doing. I mean, my my record is 32,000 percent
return on capital. That's a happy bloody day. Doesn't happen
often. But when it does, great. I'll take that cash and
(09:43):
sweep, move it into the other asset classes for longer
term returns as well. So that's why there's a You raise an
interest in point there, Sean, as well. Those the big wins
happen. The the undeniable. They've happened for you. They've happened for me.
But you're not aiming for that every trade, are you? It's it's one of those
we'll let the market give what it gives us or take what it takes from
(10:04):
us. You know, that that that's how we kind of view our trading. But
then from time to time, there will be the big win. So you've gotta have
a finger in the pie to see how to see how how much filling there
is in it. You know, I don't know where that best of all is going,
but you got so many ways we could take that. Yes. Let's move on from
that one quite quickly. But it's an interesting point, Sean, isn't it?
(10:24):
It's you're not hoping to swing for the fence yet. I think that's
also an important thing to consider
when it comes to the the the the trading
opportunities, the diversification, if you like. You know, you're not putting a
huge allocation in a higher risk asset
to, you know, win big on every trading
(10:47):
choice. No. You know, it it's not a realistic prospect. I
suppose to, you know, the real world business, Sean,
it would be like starting up business today,
with, you know, a few $1,000. And then this time next
month, you've got a couple 100,000,000, you know, in revenues and
turnovers. And while it has happened in the past, it
(11:08):
doesn't happen with every business. You know? So the the the
you understand that when it comes to the real world of bricks and mortar
businesses. But for some reason, as soon as you step into the world of
trading, that reality just gets completely forgotten
about. It really does. I mean, we, you know, we talk about
how we I mean, at one stage, Phil and I were
(11:32):
starting to consider diversifying back into brick and
mortar businesses, taking large swaths of capital that we've accrued
in our different trading accounts and our capital management asset
portfolio. And thinking, okay. Let's go buy up businesses. Let's
go buy up brick and mortar businesses, which I had done
in the past and, you know, done, turnaround business and
(11:54):
consultancy, got equity in different businesses and all sorts of other
things. But it became a major pain in the ass. Now that's an
option for diversification, but then
a lot of what we decided and I think, you know, me personally, certainly, I
think Phil did as well, was we have our rule of
thumb. Is is this unhustled? And the answer is Is this No. We're just
(12:16):
buying time solids. Yeah. Yeah. Is this is this just buying
headaches or buying hassles and bullshit? And for me, it's like,
no. I had to divest myself. Certainly post COVID,
I'm not dealing with brick and mortar anymore. Just it's just the way of
it. It was a painful lesson during that time. And,
yeah, I I got out of it. Exactly. During that time,
(12:38):
everything everything was up in the air, Sean. So we were exploring
to to be fair, pre COVID, we were exploring the concepts and ideas anyway.
But then COVID obviously hits hard and hit everyone. And so it was all up
in the air. You know? What what's the world gonna be like? You know? And
you're just trying to figure out what was going on at that time. So, yeah,
we're both exploring a variety of different new ideas and
(12:59):
concepts that, you know, we'd never really considered before just because, hey, you
know, we're all we're all stuck in the house together, and we've all got to
thinking about ways of ways of, you know, living in this, you
know, new world. And we didn't know how long it was gonna last. It was
a crazy, crazy time. So diversification, Sean, I think we're
both in agreement. Some sort of strategy
(13:20):
diversification. And I think it's also interesting to consider. It
could be nonstop markets
diversification can be included in this category. You could be
buying physical businesses, which seems to be a hot button at the
moment. I'm sure you've seen a lot of adverts and promotions for
various people saying, hey. You know, we've got this, you know,
(13:42):
business buying 0 money down, you know, on I've been in
a few of those programs and and to see what they're doing. Doing due diligence.
I think it's fair to say that while they do happen, you know, it's no
money out of pocket might be a better phrase, not necessarily no money
down. You can use other people's money. Anyway,
Steve don't get us started. Soapbox time.
(14:05):
So so diversification, it can come in a variety of
forms, you know, whether you're buying a share of a company,
in the stock market or a share of an asset when it comes
to, cryptos. You were saying that, Sean,
you've got a high risk allocation. You could also diversify
with actual businesses and, you know, getting a portion of,
(14:28):
what essentially is private equity, a private share, or a percentage
of performance. Again, that's gonna depend on your skill sets. You know, if you've not
got the the skill set to offer consultancy and performance based
returns, then, you know, maybe it's not a a a fact that you wanna consider
at this stage. But you can look at other things. I I've been
looking at so I I I tend to get, a mailer about,
(14:50):
whiskey investments for some reason, Sean. So
you can you can do this nonclassical
asset class of alternative investments.
I think that's also worth considering. So I I think just at this high
level, Sean, we've got this broad spectrum of things that
we could do. But then as we started off our conversation,
(15:13):
it's what you want to do, and that's gonna be
flavored by personal preferences. You know, do you want
to be, you know, involved or passive? You know, do you want
a payout cycle in 50 years or
5 years? That might depend on your age. You know, you know, as
I kind of, you know, crest another,
(15:35):
hill in life, you know, my time
horizon is getting shorter, but at the same time,
my patience is also longer. You You know, in an ironic twist, yeah, I might
be prepared to wait 30 years for a pay, but at the same time, you
know, like how I got 30 years left. You know?
You know, you start thinking about these things. So you've a
(15:57):
lot of these diversification issues, they're all flavored
by the preferences, what you want. And to be fair, what you know about could
also be a fact. I mean, that there's new technology, Sean. I mean,
certainly the US tends to get the the the the the first round of
things. You could certainly be a fractional investor
in property. Now let me say that a fractional investor, you don't need
(16:19):
100 of 1,000. And a lot of these things are US based, which is
great. You could go and invest couple $100
like you might, put a couple $100 every month
when you do this, you know, buy the S and P
500 or the Global Equity Index. You know? And you just put a couple $100
every month. You could do the same thing with property, but you rather than put
(16:41):
a lump sum in, you can again be a fractional investor
as a part of a, I'm trying to remember the name of this company, Sean.
But, you know, there's a variety of them where you can, you know, go
and invest in property schemes. You don't have to be hands on, and it's
super passive in that regard. Yeah. And one of the things Are you
thinking of talking about REITs or the different variants on that? I can't I can't
(17:04):
it probably is REITs again. The the terminology is a little bit different in the
UK to the US. But, yeah, there's
websites and there's directories, etcetera, of
companies that you can go and invest in that will go
and then manage that on your behalf. But you can get the buy
ins minimal, Sean, is all I'm trying to get to. Mhmm.
(17:26):
Again, nonstandard asset classes, you can buy
and sell debt. Again, there's platform in the this is revolutionary stuff, Sean,
compared to when we started out. The the opportunities for
starting out as an investor, were very minimal
unless you had a huge buy in. But I remember
the, peer to peer micro investing, Sean. You know, that you
(17:48):
know, pretty common these days, you know, to get a a payday
type loan, but you can do it peer to peer, which is,
you know, revolutionary. If you wanna lend 50 quid to someone
via this, you know, portal, you can do it, and you can collect
interest. Same thing with, tax liens is something
that always fascinates me, Sean. Again, completely unique to the
(18:10):
US. No one else in the world has this. It's, you know,
fascinating. So, again, diversification
comes down to what you want, what you know about, how much time do you
wanna invest. Do you wanna be elbows deep and actively managing, or
do you want to be passive? And then that's going to then dictate
what you go, further into, investigate, and kind of map out
(18:33):
the next the 5 years, the next 10 years, the next 15 years of what
you want for your, asset allocations. You know, I
would also, like to take a a little bit of a step back
is why would you want diversification if you're, you
know, in one area and you're doing very well. Why would you
want this kind of diversification? Some investments move
(18:54):
slower. Some diversification
creates, you know, different risk profile. But why would
you want to do it in the first place? What is diversification at
the end of the day? What does it do for you? What are the benefits?
So a lot of people, listeners, talking about hate REITs and buying and
selling debt and flipping out. They're like, this is a fucking trading
(19:17):
show. What what are you all about? Why aren't you talking about trading? Well, the
thing is and this is something that Phil said years ago, and
I've always laughed about it is, I don't care what
we do if it's making money. And one thing Phil
flippantly threw away is, I don't care if it's whimsical way of saying
this. Yeah. I've I don't care if it's more profitable putting
(19:39):
any bears on eBay. That's what we would be doing.
And it's not so much the vehicle, so to speak.
It's the what's the return and the speed of return?
That's 2 critical factors for me, which is why brick and
mortars and even real estate right now. I mean, I had my fingers in
a lot of different real estate, commercial real estate. And
(20:03):
that, again, slow rate of return, It can
accrue big numbers. You can leverage that debt. There's all sorts of different tax
advantages you can do from that. But at the end of the day,
it was a pain in the ass. And my rate
of return could be 12% a year. You
know, 12% a year. And that was with cash flow and all the rest.
(20:28):
I'm like, I could do that in a week. What the
fuck? Why am I why am I worried about that? And
then, you know, swinging swinging a big dick just saying, hey. Look. I've
got all this real estate portfolio. Who gives a shit? It's
only 10% a year. What can I do with that money that's
fucking faster without all the overhead liability,
(20:50):
the dealing with tenants, dealing with property management, dealing with
banks, dealing with all the paperwork and the tax headaches is
like, I'll just go put it over here? I'll watch it go up 10%, you
know, in a couple of days and take my money out. Okay. Good. Now
what? I'll do it again. Okay. I'll do it. Lay claim. Can't lay
claim to this this phrase, Sean, But, I'll try and dig
(21:13):
out so we can give the the attribute to it. But I heard it a
few times over the years in a variety of different ways. But it's
like the response to all of this is
all all of that sounds really great, Phil. You know? But I realized that I
like making money more than faffing around with all of that.
(21:33):
So, you know, what and again, it comes back to this is the personal preferences.
You know, if you if if your expectation is, you know, I'll make some money
in 3 months, 6 months, 12 months, 5 years, 10 years, that's great. But if
you have got a system that can pay out quicker, that's the benchmark. But if
you have got a system that can pay out quicker, that's the benchmark, you
know, and we've heard we said last week, and not all, it's we've heard this
week, if it depends on when you listen to us. When you listen to us
(21:54):
in the future, on the previous episode, we commented
on, like, we've just been through quite a revolutionary shift in our own trading,
you know, because with new products that come in the
financial markets, new ways of trading that were just never
previously available 5 years ago in the way that they are
today. You know, 6 months ago, I made a radical change. Sean's done a
(22:16):
similar radical change to shift from,
essentially swing trading over 30, 60, 90 days, which we still
do, but the allocation is switched from that's the primary
vehicle. Now it's daily and weekly SPX,
income options. That's now the primary driver. It took several months to kind of
unwind all my other positions and reallocate. But it's just
(22:39):
literally flipped everything on its heads. You know? And instead of
waiting 30, 60, 90 days for a possible payout
on 30, 40 positions and trying to juggle and manage
that, to be fair, by comparison headache, I can now do 2 or
3 positions every other day or
every week, you know, and by comparison make the same type of
(23:01):
results in a very short space of time, you know, 3 to 5 days
versus 3 to 5 months. You know, it's a very different situation.
And the the effort involved is significantly less.
So, of course, I'm going to make the shifts because the lens that myself and
Sean are always filtering through is, is it going to be more of a headache
or less of a headache? Is it more time or less time? And that really
(23:22):
is the first kind of filter that we do. Is this gonna suck all of
my time? Okay. Well, the returns might be like you said, I might be making
10% a year passively, or I'm making
10% a year doing 60 hours a week. You know,
which which is which is better for you? You know? Well, hey. Well,
you know, if you if you're a workaholic and you like, you know, being involved
(23:45):
elbows deep all day every day in the thing that you're doing to get the
return that you want, Great. Go for it. I'm not saying don't do it,
but it's not for me. You know, and that's what we're trying to figure out
when it comes to diversification. We've got alternative investments,
cryptocurrency, real estate. We've got strategy diversification, data
trading, swing trading, long term investment approaches. You can dance the same
(24:07):
strategy up and down the time frames, which is usually what I like to do.
And then you've got geographical considerations, tax considerations, global
marketing. What do you wanna be involved within this
modern diversification,
opportunities, I suppose, is probably a better way of describing it rather than
put a pin in any one individual thing. Yeah. Absolutely. I
(24:28):
mean, at the end of the day is where is your money
best served based on the outcome of McGuire, Sean. You missed it.
I know. I know. I'm just I'm just thinking because the impact here is
it it really comes down to, like you said at the very start, personal preference.
Where and, you know, I'm think it's funny. There's,
(24:51):
a And I think most new traders just to put the contrast in sorry, Sean.
Just to jump in. Just put that contrast in. Most new traders
go, what's making money? And great. You know, everything
works some other time, and they don't have that appreciation. But, well, what do you
wanna do? You know? And that just changing the priority
of the questions, is gonna have a radically
(25:13):
different outcome. No. It's very
true. And it's funny because the for
me, it's what do I wanna do with my time
and my money? And time and money are the
two elements that create wealth. You can have all the time in the world and
no money. That's not great. You can have
(25:36):
all the wealth and the money and no time. That's not great. But if you
have the 2 together, the time to do whatever you want and the
resources to do it, that's true wealth. And,
there's a gentleman who used to be a client of mine,
Pretty popular in the, I would say,
the woo woo space. Joe, I knew you were gonna talk about
(25:58):
this. I was thinking, is he gonna go woo woo? Yeah. Yeah. It's,
it's He's gonna say woo woo. 90 books. He's been on if you've read the
movie, the secret and everything else. I won't name drop because it's not cool. But
there's one thing that he talks about a lot, and it just popped in my
head. And I don't know if he was the original creator of this, but I'll
give Joe Vitale, you know, thread it where credit's due and he can pass
(26:20):
it along. But one of the things he talks about is
money loves speed. You know, is
how far do you wanna push? And there are always
the problem is a lot of people get stuck in the quicker,
you know, they they do the they they they want really, really fast
(26:41):
returns, so they'll take really, really big risks and get really, really
burnt in the ass. There's the really, really slow traditional
methods, which are a lot safer, but, again, slower rate of
return. Trying to find that balance of reality in the
middle and the strategies that work, strategies that don't,
again, that comes down to personal preference and flavors and all the other things that
(27:03):
we've talked about, plus your psychological,
acumen, so to speak, your mental toughness, and what your risk
profiles are. And, you know, some of
that, you also need that helping hand and guidance
to show you how to do it without getting burned and stuff like that,
without getting your panties in a bunch every time something goes
(27:26):
right or wrong. And you know what? It's it's no one can
no one can tell you what's gonna be best for you. All you can do
is stick your toes in the water and see if the temperature's
okay. You know. And then, it's a little cold, but I can deal with
it. Now it's getting a little warmer and okay. Fine. So
for a lot of people is while money loves speed, I personally, you
(27:47):
know, what is the quickest but proven way
to get to a certain point? For me,
I'm not a patient person. I don't wanna wait. You know, the the
rule of 7, which is, you know, hey, if you get 10% return, you'll double
your money within 7 years add compounding and all that kind of bullshit.
(28:08):
I don't wanna wait that long. I wanna see, okay. Well, what is
within my higher risk tolerance able to
flow? How aggressive can I be?
If I lose that, do I have a Sounds like a new character on DuckTales
Shop. It does. Doesn't it? Yeah. Does
funny shit. I have been called
(28:30):
worse than Scrooge McDuck. Yes. But, there's a lot of
different things that you have to decide for yourself is what is
your outcome you want and what with the strategy
strategies you have available or that you know or you can apply
is gonna get there. And then what has to happen within that
framework to make that happen in a measurable,
(28:54):
progressable way that you can track, build
on, compound into, and
accelerate that. I mean, a good example, and it's a
mathematical example, is okay. Some people start their
trading and they have, like they they'll do a cash allocation. Say, I'll
just use simple numbers. $1,000, that's their starting
(29:15):
pot, and they're gonna trade that and grow it over time. But the
way to 10 x that is add in an
extra 1,000 every month just like you're adding into your own
retirement plan. Now the compounding effect of that
over 3 years, 5 years, 10 years is
insane. You get to, you know, if you were
(29:38):
just having a consistent 10% return, just to use simple mathematical numbers,
this is a mathematical example. And this is the principle of dollar
cost averaging that we were kind of bouncing around a little bit and actually say,
isn't it? Yeah. Yeah. Every month, you put in an allocation. You do the same
thing with your strategy. And if you've got something that works, you know, you can
book $100 in, $500 in, whatever your number is,
(29:59):
whether it be real estate investing strategy. But if you do
that, you've got the, you know, the double effect of
compounding, is it? It's a yeah. It's a force multiplier for compounding, and
you will get to whatever your number is 10 times faster. Most people
don't think about treating and I'm waving a pen like it's a magic freaking
Harry Potter wand here. But the at
(30:20):
the end of the day, people don't consider investing more into
their business to help accelerate the growth. They just wanna
do the initial allocation. That's it. You know? And
and I'm just like, it's a business. Invest in it. Treat it like and this
is this is one thing, you know, from a money management set. And I do
this in in businesses. I do this for personal finance as
(30:42):
well, is pay yourself first. Tax yourself.
You know? The government's quite happy to tax you. Tax yourself.
Don't think of it as a tax, though. Think of it as an investment. It's
an allocation to your future. Take 10% off the
top, put it over here, you know, find a way to, you know,
take 10% and and of your gross income
(31:04):
and put it over here. Cut back on a couple of things if you need
to. Make a couple of sacrifices because that will pay you so much
more dividends in the future that, you know There was a price of coffee at
the moment. You can brew it yourself. You know? Bloody
right. Since since the, the mock down
that we had, literally, the price of coffee
(31:26):
has almost doubled in the UK. Then you've also
got, I don't know if they have it in the US, but
we've just, again, jacked up the sugar tax. Now I don't
know about you, Sean, but on the rare occasions that I do buy a can
of Coke, all the products are available, I might ask. But on the rare
occasion that I do, it's like I want proper
(31:48):
Coke. I don't want the diet nonsense because it's
it it it it doesn't doesn't make sense. You're
it's still full of shit. You might
as well put the put the the proper shits in. That's all I'm saying.
But then you get chance for the privilege of it. So anyway, the put the
point is did you save a cup of coffee? You know, it it it it's
(32:09):
a silly little thing. Cup of coffee a day. What is it? 5 $5, $8
a a cup in the US. It's it's almost £4,
like shiny pennies in the UK. So that's about 6, $7.
In a you know, say say book instead of 2 cups of coffee a day
out, you know, but, you know, buy 1 and save 1. You
(32:29):
know, it it can be a simple little thing just to get the
ball rolling. And you'll think about those little
$5 here, $10 there. You know, one of the things I
like, Sean, is I I sign up for these, these money apps, and everything
I do goes on cards. I hate carrying cash. I always have them.
But you've got this save the change feature on
(32:51):
most banking apps now. So if it's, you know, 495,
it'll round it up and save the change. You know?
And you can be surprised at how how much
those those little $3, $4, 5 that, you know,
those 50 pennies here and a dollar there, you know, they
adds up quite dramatically. And then you can do
(33:14):
something with that. You know, just save that change. Start small,
and then you can kind of have that compounding effect for
maybe not necessarily the trading show, but maybe that can be the
start of the, the alternative investments, you know, the the other stuff
that you could do. Because there's a a a mountain of things that, you know,
to be fair, interests and fascinates me. And the criteria, as we've
(33:37):
always said, is is it worth my time? Is it worth my money? And
if the answer's no, then, obviously, it just goes in the idea pile
for me, Sean. Yeah. No. That's exactly right. I mean, I have stacks and
stacks of books. I I use Evernote as as my
second brain. And every time I have this great idea or a synoptic, I thought,
this is a great idea. And then, you know, after the excitement of
(33:59):
who's new, which we all have,
it's it's like, okay. Well, I've slept on it. You know, it's been a few
days later. Is it time, money? You know, what what's better. Okay.
Carry on doing what I'm doing because, okay, it's gonna take time to build them.
You know, maybe maybe I'll do something with it. I mean, to be fair, the
one thing that does interest me, Sean, just simply because it's not available anywhere else,
(34:20):
I keep coming back to tax liens and tax re the is it the liens
and certificates? I find that fascinating because
it's I and, you know, if you're familiar with this in the US,
forgive a complete noob in the UK who's just heard about it
because it doesn't exist anywhere else in the world. You can
lend money to someone temporarily and have it
(34:42):
government backed. That's that's seems rebel. Why
wouldn't you do that, Sean? And it's completely
passive is what I like about it. Yeah. There's all sorts of
different things that crack me up in terms of what you can,
what you can't do, what vehicles are available. And half of
it, you know, I kind of like, is this legit? Is
(35:04):
is there what what's the catch? Because, you know, I I I'm
a I'm like the world's greatest bloody skeptic in in a
lot of these because I've seen every level of bullshit, something with
financial instruments come through my desk. And you're just like,
this is just a Ponzi. It's a wrapped Ponzi with a new name, you know,
and stuff like that. And it's a case of,
(35:26):
alright. Okay. Is there a real thing here? Then I start, you know, I'll
start talking to some smarter friends. Because here's the thing.
I wanna surround myself with people who are far smarter than me in financial
instruments. I don't wanna be the smart if I'm in the smartest person in the
room in regards to that, I'm in the wrong fucking way. Room. Yeah.
Exactly. And so I wanna find out who knows more. I mean, this
(35:48):
is why I got into real estate was I started networking with millionaires and
billionaires who had a quite a large
real estate portfolio. And I'm looking at them. It's like,
what are you doing? Like, here. I've even dabbled with it
here. Okay. And I'd say dabble with the idea. I'm not dabbling
because for a a flying, you know, a foreigner here can't
(36:10):
own property, but companies can.
So create companies and look at that. But I'm looking at cash flow because
a lot of the American real estate methodologies
don't exist here in Thailand. So my
brain's going, what if
I look at what was going on in America, what I can do in America,
(36:33):
and the methodologies and that? How would they apply here if
no one's thinking about it or no one's doing it? First of
all, why? What's the opportunity? Is there an
opportunity? What kind of financial lending is available for
this kind of thing, and I started down that rabbit hole. 6
months later, it's not really possible here. That's why because
(36:55):
of financial market regulations, government controls, and all sorts of other
things, it makes it a lot more difficult than it is in America.
Okay. But now I am aware of what the situation is. And
if that situation changes, then guess what? Sean's already got a
battle plan to gobble up massive amounts of,
you know, small real estate here. Single family
(37:19):
homes. You'll draw your swords and shout at the top of your voice by the
power of Grayskull and charge head first into the opportunity.
Yeah. It's it's it's not He Man. It's Batman. But, yeah, there you
go. I've got the kittens instead of battle cat. It's not gonna work out
very well. But, you a full kitten. Yeah. But funny
enough If you you're in just selling, though. The funny thing is
(37:42):
here, just as a just as a kind of sidebar, is what's
called house shops. They're 4 story,
single column. They've got a shop in the bottom and then 4
stories of, homes available. But
you you buy the house, cost a lot of money
because land here in Bangkok is fucking expensive. It's about 4
(38:05):
times. And center of Bangkok, it's, like, a 100
times like in Texas where I was.
But that land, the cruise doesn't tend
to go down, but you but you lease the shop, you lease the
houses, and continuous cash flow. And it's just
continuous cash flow and equity forever. And you you can you
(38:28):
don't have, like, 1031, lien exchanges with, you know, tax
exchanges where you don't get taxed on that. You move it into other properties. You
don't have that per se here, but you can get really good
financing opportunities, and the banks don't like
foreclosing. They will work with you on different payment terms.
Very lax here in that regard. So I was thinking, okay. Where's the
(38:50):
opportunity? There's an opportunity, but now
where's the headaches? Where's the hassles? And it comes down to regulation and
some of the stuff. Yeah. Speak up. Speak. Yes. So, yeah, I mean, there
there's a lot of different things that when you start looking into learning,
I use it as my spare time analysis of which I've got
plenty. Is, you know, is is okay. What else
(39:12):
is an opportunity, and what's the rate of return? And, funnily enough, I
end up coming back to the stock market and just saying, yeah. I'll just I'll
just change my allocation or I'll just add more to the portfolio here because
it ends up being a lot less hassle. But it's
it's interesting rabbit holes that we dive down. And we've gone completely off the
bloody script and the plan for the show. I hadn't noticed, and I
(39:34):
I thought we're completely on track, with our
But I think it's a good point to kind of I don't think it's a
bucket. Okay. I think it's good to explore. Looking back at the show notes, is
there anything you wanna pull from that that we haven't covered?
Yeah. I I I think just generally speaking, it
it's sometimes more than trading.
(39:56):
As we've said several times in the last few, editions of
this short miniseries, it's sometimes that the
the decisions that we make are not necessarily trading related
directly. You know? A lot of things are,
you know, personal preferences. They're gonna be situation. They're gonna be geography that
you know, there's a whole variety of things that influence it. So we can
(40:19):
still all be doing the same thing, but it's going to be approached in
a different way at these higher levels, the decisions that we make. Again, we always
filter through time. And, you know, is it going to be a time so
called not? You know, that is the first priority for everything that we do and
the decisions that we make. So diversification, Sean, you
know, it it's there's a lot of stuff out there. Do you wanna do
(40:41):
it? Do you have to do it? Do you need to do it? What are
the time horizons to consider? And then then you
can explore what might be the right thing for you. And again,
in the US, we've already established. There's lots of opportunities in the US compared
to just Europe. And then there's there's there's equally other
opportunities that are not available elsewhere depending on where you're in the world. So
(41:03):
do you wanna be, you know, allocate time to it,
or do you wanna allocate resources to it? A little bit of both. And then
you can turn those dials, as we like to say. You can kind of speed
things up, slow things down. That's gonna flavor to swipe
Sean's thing, which I quite like it, Moe. That's your flavor of ice cream, baby.
That's a bloody word, mate. So alright. Diversification. It doesn't
(41:25):
matter what you're doing, recognizing where you are,
what your needs are, what your requirements are
for risk diversification, money diversification,
you know, geographical diversification, time diversification,
what you're looking at in terms of where you are in the world environmentally,
(41:46):
governmentally, regulatory, you know, technology
available, behavioral, situations. There's
so many different ways to diversify not only your
portfolio, but also your risk and your brain as well.
One thing, I'll just put, you know, before we wrap up and
and a last thought that popped in my head is I like
(42:09):
diversification to keep my interest.
Because trading is boring as shit. It really should be. I mean, we
try and put a laugh and a spin on it, but training trading
should be boring. It shouldn't be an excitement driven,
avid because that leads to bad psychology as far as I'm concerned.
It should be boring. It should be functional. It should be a production line process.
(42:31):
You know, effort in, money in, profit out, and
that's it. It shouldn't be anything more than that. But because it
does get boring, I also like to just be aware
of different areas of finance and opportunity just to have my
finger in the pie, so to speak, and see what is out there,
from just a an educational standpoint as well.
(42:55):
So for me, there's all sorts of different reasons to diversify,
but as Phil reminded me,
depends on what flavor of ice cream you like. So go stick
a, what's it, a flake 99 on the top, little bit of
sprinkles, little bit of cherry syrup, and enjoy.
Don't get to hold the nuts. Yeah. There you go. Absolutely.
(43:17):
Absolutely. So with that being said, rock and roll, see you same bat
time, same bat channel next week. And, Phil, as always
See you same time next time myself, but, Tulu Trader, bye for now. There
you go. Adios, amigos.
For more cutting edge trading advice and a free trader workshop to help you
build a personalized trading plan and make smarter trading decisions,
(43:40):
go to tradecanyon.com now. Futures, options on futures. Stock
and stock options trading involves a substantial degree of risk. It may not be suitable
for all investors. Past performance is not necessarily indicative of future results. Trade Canyon
Incorporated provides only training and educational information. If you actually understood and listened to this,
then that means you are awesome. Congratulations and well done. Notice, this product
may contain nuts.
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