My Worst Investment Ever Podcast

BIO: As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income. STORY: Dan decided to take the bold move of turning his treasury into a long-term crypto strategy. What started as $2 million in Bitcoin and Ethereum ballooned to $30 million, but the 2022 crash and business pressures forced him to liquidate at low prices—missing out on what could have been a $100 million windfall. LEARNING: Don’t chase aggressive expansion without a clear path to profitability. Stick to your core business. Separate your business from speculative bets.   > “Everyone has a plan until they get punched in the face. Take a moment of deep thinking every week when things are going well, think about everything that could go wrong, and then reassess your position.” > Dan Novaes   GUEST PROFILE As Co-Founder & CEO of Mode Mobile [https://invest.modemobile.com/regs], Dan Novaes [https://www.linkedin.com/in/danielnovaes/] is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income. Under his leadership, Mode achieved 32,481% revenue growth from 2019 to 2022 and ranked #1 in Software on Deloitte’s Technology Fast 500 in North America. WORST INVESTMENT EVER In today’s rapidly evolving and highly interconnected business world, companies are increasingly relying on external partnerships to drive growth and innovation. Dan’s story begins in the early days of crypto. His company had raised funds through Bitcoin and Ethereum when Bitcoin was valued at just a few thousand dollars and Ethereum at only a few hundred. This early success in the crypto market was a testament to the potential for significant growth that these investments could bring. Once the business had a comfortable runway, Dan made a bold move—he turned their treasury, which is the accumulated profits and cash reserves, into a long-term crypto strategy, much like what companies like MicroStrategy would later become known for. RIDING THE WAVE At first, the decision looked genius. That $1–2 million ballooned into $30 million. Dan was on CNBC, celebrating as Bitcoin crossed $10,000, and his company seemed unstoppable. They never had to fundraise again—until the 2022 crash. THE CRASH In 2022, Bitcoin’s price fell from $63,000 to $18,000, and pressure mounted. Compounding the pain, many of Dan’s advertising partners went bankrupt, leaving unpaid bills. This was a significant blow to the company’s financial stability. To survive, Dan’s company had to liquidate almost the entire treasury at depressed prices. Had Dan managed his growth and financials more cautiously, that crypto position could have grown to $100 million or more. Instead, he walked away with far less—and a bitter lesson. LESSONS LEARNED * Growth at all costs is dangerous. Chasing aggressive expansion without a clear path to profitability can leave your company vulnerable when market conditions shift. * Profit-taking matters. Riding the wave without ever securing gains turned paper wealth into a forced liquidation. * Stick to your core business. * Discipline is everything. Not letting market euphoria dictate strategy is critical to long-term survival. ANDREW’S TAKEAWAYS * Separate your business from speculative bets. Don’t gamble with your excess cash on foreign exchange trades. Instead, hedge your risks because trading currencies isn’t your core business. * Have cash discipline for survival through decades of ups and downs. * Guard your cash, respect your core business, and don’t confuse speculative opportunities with sustainable operations. ACTIONABLE ADVICE Take time every week for deep thinking. When things are going well, take a moment to ask: What could go wrong? By slowing down and imagining worst-case scenarios, you can prepare contingency plans before you get “punched in the face” by reality. This proactive approach to risk management will keep you prepared for any eventuality. DAN’S RECOMMENDATIONS Dan recommends building the habit of scheduled deep thinking. Carve out one or two hours weekly—whether it’s through running or quiet reflection. The practice isn’t just for investing; it sharpens decision-making across life and business. NO.1 GOAL FOR THE NEXT 12 MONTHS Dan’s goal for the next 12 months is to double revenue and triple EBITDA through acquiring and growing new businesses. It’s a bold target, but one grounded in the hard lessons of the past. This time, growth will come with more balance, more discipline, and a stronger focus on sustainability. PARTING WORDS   > “Thank you for having me. Feel free to reach out.” > Dan Novaes   [spp-transcript]   CONNECT WITH DAN NOVAES * LinkedIn [https://www.linkedin.com/in/danielnovaes/] * Website [https://invest.modemobile.com/regs] ANDREW’S BOOKS * How to Start Building Your Wealth Investing in the Stock Market [https://amzn.to/3qrfHjX] * My Worst Investment Ever [https://amzn.to/2PDApAo] * 9 Valuation Mistakes and How to Avoid Them [https://amzn.to/3v6ip1Y] * Transform Your Business with Dr.Deming’s 14 Points [https://amzn.to/3emBO8M] ANDREW’S ONLINE PROGRAMS * Valuation Master Class [https://valuationmasterclass.com/] * The Become a Better Investor Community [https://astotz.kartra.com/page/become-a-better-investor-community] * How to Start Building Your Wealth Investing in the Stock Market [https://academy.astotz.com/courses/how-to-start-building-your-wealth-investing-in-the-stock-market] * Finance Made Ridiculously Simple [https://academy.astotz.com/courses/finance-made-ridiculously-simple] * FVMR Investing: Quantamental Investing Across the World [https://academy.astotz.com/courses/fvmr-investing-quantamental-investing-across-the-world] * Become a Great Presenter and Increase Your Influence [https://academy.astotz.com/courses/gp] * Transform Your Business with Dr. Deming’s 14 Points [https://academy.astotz.com/courses/transformyourbusiness] * Achieve Your Goals [https://academy.astotz.com/courses/achieve-your-goals] CONNECT WITH ANDREW STOTZ: * astotz.com [https://www.astotz.com/] * LinkedIn [https://www.linkedin.com/in/andrewstotz/] * Facebook [https://www.facebook.com/andrewstotzpage] * Instagram [https://www.instagram.com/andstotz/] * Threads [https://www.threads.net/@andstotz] * X [https://twitter.com/Andrew_Stotz] * YouTube [https://www.youtube.com/c/andrewstotzpage] * My Worst Investment Ever Podcast [https://itunes.apple.com/us/podcast/my-worst-investment-ever-podcast/id1416554991?mt=2]

BIO: Dr. Gilbert  A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity. STORY: In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” He over-engineered, over-researched, and waited for “perfect”—while another company launched the same concept. By the time he moved, they dominated airports with a first-mover advantage. LEARNING: Jump in and get things going. Don’t be afraid to fail. Iterate, and get your product to market.   > “Don’t be afraid to iterate. Maintain the course, and you’ll see your product through.” > Dr. Gilbert A. Guzmán   GUEST PROFILE Dr. Gilbert A. Guzmán [https://www.linkedin.com/in/gilguz/] is a business strategist and systems thinker. He is the founder of IntraQ AI [https://www.intraqai.com/landing], a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity [https://payhip.com/b/0OAhP], which you can get for free using the code: Stotz. With a doctorate in business and experience leading large teams, he helps organizations boost productivity through practical systems built for real-world constraints. His work bridges people, data, and technology for lasting operational success. WORST INVESTMENT EVER In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” Users would rent charged batteries and return them to kiosks for reuse. Ironically, Gilbert is a very impatient man, but when it comes to business ideas, he takes his sweet time, sometimes too long. This is exactly what happened with the portable charger idea. Gilbert over-engineered, over-researched, and waited for “perfect”—while Fuel Rod launched the same concept. By the time he moved, they dominated airports with a first-mover advantage. He invented the wheel but didn’t roll it. LESSONS LEARNED * Jump in, do what you need to do, stay up late, work hard, do the research, and get things going. Ultimately, everything will come to fruition. * Manage your risks. * You can earn back cash, but you can’t earn back lost time. * In startups, a bad launch always beats no launch. Waiting for no flaws means 100% flaw: no product. * You can’t be a risk-averse leader. ANDREW’S TAKEAWAYS * MVPs beat masterpieces because if you’re not embarrassed by the first version of your product, you launched too late. * The market doesn’t care who invented a product—it cares who shipped it. ACTIONABLE ADVICE * Don’t be afraid to fail. Iterate, get your product to market, and find out if it makes sense and is relevant. * Don’t get scared of the big names, the Googles of the world, and think that they will crush you. * You don’t have to be horizontal. You can go vertical. You can find a niche and dedicate your time to it. GILBERT’S RECOMMENDATIONS Gilbert recommends his e-book Atomic Impact: Systems for Transformative Productivity [https://payhip.com/b/0OAhP] (remember to use code Stotz for a free copy). He also recommends visiting his website [https://atomicimpactbook.com/] for additional resources. Additionally, reading Edwards Deming’s Out of the Crisis [https://amzn.to/4mFqNiH] can help you apply systems thinking to your personal and work life, ultimately changing the way you view life, society, and work, and becoming a little more solution-oriented. NO.1 GOAL FOR THE NEXT 12 MONTHS Gilbert’s goal for the next 12 months is to further enhance the success of Atomic Impact [https://payhip.com/b/0OAhP] and IntraQ AI [https://www.intraqai.com/landing] by creating speaking engagements and workshops that will reinvigorate the concepts he has developed and transform the way people work. PARTING WORDS   > “I appreciate you having me on, Andrew. It’s been a pleasure. I look forward to the future. Go split some atoms.” > Gilbert   [spp-transcript]   CONNECT WITH DR. GILBERT GUZMAN * LinkedIn [https://www.linkedin.com/in/gilguz/] * Podcast [https://open.spotify.com/show/1ZwLNaGimfgjxLEHc3EQlH?si=d7808ad5b5cc447e] * YouTube [https://www.youtube.com/@Dr.Guzman] * Blog [https://atomicimpactbook.com/]  * Website [https://www.compoundingquality.net/] * Books [https://atomicimpactbook.com/] ANDREW’S BOOKS * How to Start Building Your Wealth Investing in the Stock Market [https://amzn.to/3qrfHjX] * My Worst Investment Ever [https://amzn.to/2PDApAo] * 9 Valuation Mistakes and How to Avoid Them [https://amzn.to/3v6ip1Y] * Transform Your Business with Dr.Deming’s 14 Points [https://amzn.to/3emBO8M] ANDREW’S ONLINE PROGRAMS * Valuation Master Class [https://valuationmasterclass.com/] * The Become a Better Investor Community [https://astotz.kartra.com/page/become-a-better-investor-community] * How to Start Building Your Wealth Investing in the Stock Market [https://academy.astotz.com/courses/how-to-start-building-your-wealth-investing-in-the-stock-market] * Finance Made Ridiculously Simple [https://academy.astotz.com/courses/finance-made-ridiculously-simple] * FVMR Investing: Quantamental Investing Across the World [https://academy.astotz.com/courses/fvmr-investing-quantamental-investing-across-the-world] * Become a Great Presenter and Increase Your Influence [https://academy.astotz.com/courses/gp] * Transform Your Business with Dr. Deming’s 14 Points [https://academy.astotz.com/courses/transformyourbusiness] * Achieve Your Goals [https://academy.astotz.com/courses/achieve-your-goals] CONNECT WITH ANDREW STOTZ: * astotz.com [https://www.astotz.com/] * LinkedIn [https://www.linkedin.com/in/andrewstotz/] * Facebook [https://www.facebook.com/andrewstotzpage] * Instagram [https://www.instagram.com/andstotz/] * Threads [https://www.threads.net/@andstotz] * X [https://twitter.com/Andrew_Stotz] * YouTube [https://www.youtube.com/c/andrewstotzpage] * My Worst Investment Ever Podcast [https://itunes.apple.com/us/podcast/my-worst-investment-ever-podcast/id1416554991?mt=2]

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing [https://amzn.to/4ebG33x]. In this series, they conclude the lessons from the book. LEARNING: Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad.   > “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.” > Larry Swedroe   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing [https://amzn.to/4ebG33x]. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners [https://buckinghamwealthpartners.com/] to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks [https://myworstinvestmentever.com/ep645-larry-swedroe-beware-of-idiosyncratic-risks/]. Larry deeply understands the world of academic research and investing, especially risk. In this series, they conclude on the lessons from the book. ENRICH YOUR FUTURE: LARRY’S TIMELESS GUIDE TO SMARTER INVESTING If you’ve ever wondered how to cut through the noise of investment hype and build a portfolio that actually works for you, Larry’s Enrich Your Future is the blueprint you’ve been looking for. Here’s a distilled look at the wisdom from his book. START WITH CORE PRINCIPLES Larry insists there are only a handful of fundamental truths in investing—and if you master them, you’ll avoid most costly mistakes: * Markets are highly efficient – While not perfect, markets price assets so effectively that consistently beating them on a risk-adjusted basis is near impossible. So don’t engage in individual security selection or market timing. * All risk assets offer similar risk-adjusted returns – Whether it’s US stocks, Thai stocks, or corporate bonds, the relationship between risk and return holds steady over time. Invest in assets based upon your ability, willingness, and need to take risks. If you’re willing to take more risk and have the ability and maybe the need to, then you can load up on more risky, higher expected-returning assets. It doesn’t mean they’re better assets; rather, they have higher expected returns at the cost of higher risk. * Diversification is non-negotiable – Since all risk assets have similar risk-adjusted returns, it makes no sense to concentrate all of your risk in one basket. Concentrating your risk in a single asset class or geography is a recipe for trouble. BUILD A PORTFOLIO THAT FITS YOU Forget cookie-cutter solutions—Larry believes the “right” portfolio depends on three factors: 1. Ability to take risk – Your financial capacity to weather market downturns is influenced by factors like investment horizon and job stability. 2. Willingness to take risk – Your psychological comfort level with market volatility. 3. Need to take risk – Whether you require high returns to meet your financial goals. Larry’s rule? Let the lowest of these three determine your equity exposure. If you don’t need to take big risks, don’t. THINK GLOBAL, BUT STAY RATIONAL A total global market portfolio is an ideal starting point—currently about 65% US, 27% developed international, and 8% emerging markets. Adjust only slightly if you have a reasoned view, but avoid drastic tilts that imply you “know better” than the market. BEYOND STOCKS AND BONDS Larry is a big believer in alternative investments—if you can access them at reasonable costs. These include: * Private credit – Lending directly to companies, often with double-digit returns and lower volatility than equities. * Reinsurance – Returns tied to natural disaster risks, uncorrelated with stock markets. * Infrastructure funds – Assets like toll roads, dams, and utilities with stable cash flows. His own portfolio now includes a significant allocation to alternatives, reducing reliance on traditional stocks and bonds. FOCUS ON RISK SOURCES, NOT JUST LABELS Instead of obsessing over “asset classes,” Larry advises analysing the risks each investment brings—economic cycle risk, credit risk, inflation risk—and blending assets with low correlations to one another. INTEGRATE FACTORS, DON’T ISOLATE THEM While factor investing (such as value, small-cap, quality, and momentum) is powerful, buying single-factor funds separately can create costly and contradictory trades. Larry favours integrated factor funds that combine multiple factors into one systematic strategy, reducing costs and improving efficiency. MASTER YOUR BEHAVIOUR Even the best portfolio fails if you can’t stick with it. Larry warns that there is no one right portfolio. The right portfolio for you is the one you are most likely to stick with. That means: * Avoid assets you can’t hold for at least 10–15 years. * Expect long stretches of underperformance from every risk asset. * Continue to buy during downturns to maintain your target allocation. DON’T DIY UNLESS YOU’RE TRULY QUALIFIED Less than 1% of investors have the skill, time, and emotional discipline to manage their investments entirely on their own. Larry recommends working with a true fiduciary adviser—one who: * Is paid only by you (no commissions). * Invests in the same funds they recommend. * Backs every decision with empirical evidence. EDUCATION BEATS IGNORANCE EVERY TIME You don’t need to read all 18 of Larry’s books, but three or four will give you the foundational knowledge to make better decisions. Investing ignorance, he warns, is far costlier than the price of a good book. THE TAKEAWAY Enrich Your Future: The Keys to Successful Investing [https://amzn.to/4ebG33x] isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad. Follow Larry’s principles, and you’ll not only protect your wealth but also position yourself for long-term financial peace of mind. As Larry himself says: > “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.” DID YOU MISS OUT ON THE PREVIOUS CHAPTERS? CHECK THEM OUT: PART I: HOW MARKETS WORK: HOW SECURITY PRICES ARE DETERMINED AND WHY IT’S SO DIFFICULT TO OUTPERFORM * Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds [https://myworstinvestmentever.com/enrich-your-future-01-the-determinants-of-the-risk-and-return-of-stocks-and-bonds/] * Enrich Your Future 02: How Markets Set Prices [https://myworstinvestmentever.com/enrich-your-future-02-how-markets-set-prices/] * Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers [https://myworstinvestmentever.com/enrich-your-future-03-persistence-of-performance-athletes-versus-investment-managers/] * Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find? [https://myworstinvestmentever.com/enrich-your-future-04-why-is-persistent-outperformance-so-hard-to-find/] * Enrich Your Future 05: Great Companies Do Not Make High-Return Investments [https://myworstinvestmentever.com/enrich-your-future-05-great-companies-do-not-make-high-return-investments/] * Enrich Your Future 06: Market Efficiency and the Case of Pete Rose [https://myworstinvestmentever.com/enrich-your-future-06-market-efficiency-and-the-case-of-pete-rose/] * Enrich Your Future 07: The Value of Security Analysis [https://myworstinvestmentever.com/enrich-your-future-07-the-value-of-security-analysis/] * Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return [https://myworstinvestmentever.com/enrich-your-future-08-high-economic-growth-doesnt-always-mean-high-stock-market-return/] * Enrich Your Future 09: The Fed Model and the Money Illusion [https://myworstinvestmentever.com/enrich-your-future-09-the-fed-model-and-the-money-illusion/] PART II: STRATEGIC PORTFOLIO DECISIONS * Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t [https://myworstinvestmentever.com/enrich-your-future-10-you-wont-beat-the-market-even-the-best-funds-dont/] * Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill [https://myworstinvestmentever.com/enrich-your-future-11-long-term-outperformance-is-not-always-evidence-of-skill/] * Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play [https://myworstinvestmentever.com/enrich-your-future-12-when-confronted-with-a-losers-game-do-not-play/] * Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance [https://myworstinvestmentever.com/enrich-your-future-13-past-performance-is-not-a-predictor-of-future-performance/] * Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon [https://myworstinvestmentever.com/enrich-your-future-14-stocks-are-risky-no-matter-how-long-the-horizon/] * Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe [https://myworstinvestmentever.com/enrich-your-future-15-individual-stocks-are-riskier-than-you-believe/] * Enrich Your Future 16: The Estimated Return Is Not Inevitable [https://myworstinvestmentever.com/enrich-your-future-16-the-estimated-return-is-not-inevitable/] * Enrich Your Future 17: Take a Portfolio Approach to Your Investments [https://myworstinvestmentever.com/enrich-your-future-17-take-a-portfolio-approach-to-your-investments/] * Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans [https://myworstinvestmentever.com/enrich-your-future-18-build-a-portfolio-that-can-withstand-the-black-swans/] * Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe [https://myworstinvestmentever.com/enrich-your-future-19-the-gold-illusion-why-investing-in-gold-may-not-be-safe/] * Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management [https://myworstinvestmentever.com/enrich-your-future-20-passive-investing-is-the-key-to-prudent-wealth-management/] PART III: BEHAVIORAL FINANCE: WE HAVE MET THE ENEMY AND HE IS US * Enrich Your Future 21: Think You Can Beat the Market? Think Again [https://myworstinvestmentever.com/enrich-your-future-21-think-you-can-beat-the-market-think-again/] * Enrich Your Future 22: Some Risks Are Not Worth Taking [https://myworstinvestmentever.com/enrich-your-future-22-some-risks-are-not-worth-taking/] * Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions [https://myworstinvestmentever.com/enrich-your-future-23-seeing-through-the-frame-making-better-investment-decisions/] * Enrich Your Future 24: Why Smart People Do Dumb Things [https://myworstinvestmentever.com/enrich-your-future-24-why-smart-people-do-dumb-things/] * Enrich Your Future 25: Stock Crashes Happen—Be Prepared [https://myworstinvestmentever.com/enrich-your-future-25-stock-crashes-happen-be-prepared/] * Enrich Your Future 26: Should You Invest Now or Spread It Out? [https://myworstinvestmentever.com/enrich-your-future-26-should-you-invest-now-or-spread-it-out/] * Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities [https://myworstinvestmentever.com/enrich-your-future-27-pascals-wager-betting-on-consequences-over-probabilities/] * Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases [https://myworstinvestmentever.com/enrich-your-future-28-29-how-to-outsmart-your-investing-biases/] * Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks [https://myworstinvestmentever.com/enrich-your-future-30-the-hidden-cost-of-chasing-dividend-stocks/] * Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot [https://myworstinvestmentever.com/enrich-your-future-31-risk-vs-uncertainty-the-investors-blind-spot/] Part IV: Playing the Winner’s Game in Life and Investing * Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand [https://myworstinvestmentever.com/enrich-your-future-32-trying-to-beat-the-market-is-a-fools-errand/] * Enrich Your Future 33: The Market Doesn’t Care How Smart You Are [https://myworstinvestmentever.com/enrich-your-future-33-the-market-doesnt-care-how-smart-you-are/] * Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally [https://myworstinvestmentever.com/enrich-your-future-34-embrace-the-bear-why-market-crashes-are-your-silent-ally/] * Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers [https://myworstinvestmentever.com/enrich-your-future-35-market-gurus-are-just-expensive-entertainers/] * Enrich Your Future 36: The Madness of Crowded Trades [https://myworstinvestmentever.com/enrich-your-future-36-the-madness-of-crowded-trades/] * Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap [https://myworstinvestmentever.com/enrich-your-future-37-38-the-calendar-is-a-crook-hot-funds-are-a-trap/] * Enrich Your Future 39: More Wealth Does Not Give You More Happiness [https://myworstinvestmentever.com/enrich-your-future-39-more-wealth-does-not-give-you-more-happiness/] * Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals [https://myworstinvestmentever.com/enrich-your-future-40-why-passive-investing-gives-you-back-what-wall-street-steals/] * Enrich Your Future 41 & 42: DIY Investing or Hire an Advisor? How to Avoid the Costliest Mistakes [https://myworstinvestmentever.com/enrich-your-future-41-42-diy-investing-or-hire-an-advisor-how-to-avoid-the-costliest-mistakes/] ABOUT LARRY SWEDROE Larry Swedroe [https://www.linkedin.com/in/larry-swedroe-18778267/] was head of financial and economic research at Buckingham Wealth Partners [https://buckinghamwealthpartners.com/]. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match. Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need [https://amzn.to/3HC9QnZ].” He has authored or co-authored 18 books. Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets. Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect [https://alphaarchitect.com/blog/], Advisor Perspectives [https://www.advisorperspectives.com/search?q=Larry+Swedroe], and Wealth Management [https://www.wealthmanagement.com/search/node/Larry%20Swedroe].   [spp-transcript]   CONNECT WITH LARRY SWEDROE * LinkedIn [https://www.linkedin.com/in/larry-swedroe-18778267/] * X [https://twitter.com/larryswedroe] * Website [https://buckinghamwealthpartners.com/] * Books [https://amzn.to/3JfpUgx] ANDREW’S BOOKS * How to Start Building Your Wealth Investing in the Stock Market [https://amzn.to/3qrfHjX] * My Worst Investment Ever [https://amzn.to/2PDApAo] * 9 Valuation Mistakes and How to Avoid Them [https://amzn.to/3v6ip1Y] * Transform Your Business with Dr.Deming’s 14 Points [https://amzn.to/3emBO8M] ANDREW’S ONLINE PROGRAMS * Valuation Master... [https://valuationmasterclass.com/]

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing [https://amzn.to/4ebG33x]. In this series, they discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust. LEARNING: Passive investing is still the winner. If something is worth doing, it’s worth paying someone to do it for you.   > “A good wealth advisor helps you build a plan and choose the best investment vehicles that’ll give you the best chance of achieving your life and financial goals.” > Larry Swedroe   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing [https://amzn.to/4ebG33x]. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners [https://buckinghamwealthpartners.com/] to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks [https://myworstinvestmentever.com/ep645-larry-swedroe-beware-of-idiosyncratic-risks/]. Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust. CHAPTER 41: A TALE OF TWO STRATEGIES In Chapter 41, Larry explains why investors who have implemented the types of passive strategies recommended in his book have experienced “the best of times.” On the other hand, for those who continue to play the game of active investing, it has generally been the “worst of times.” “It was the best of times, it was the worst of times.” Charles Dickens may have been writing about the French Revolution, but Larry observes that that line rings true for today’s investors, too. Depending on how you approach the market, your experience can feel like either a triumph or a disaster. IF YOU’RE BETTING ON ACTIVE MANAGEMENT, IT’S THE WORST OF TIMES According to Larry, people who still believe in the promise of active fund managers as the winning strategy are likely to find themselves in the “season of Darkness.” Over the years, the ability of active managers to consistently outperform has dwindled significantly. You may be surprised to learn that in 1998, when Charles Ellis wrote his famous book “Winning the Loser’s Game [https://amzn.to/45fmeVg]”, about 20% of actively managed funds produced statistically significant returns after adjusting for risk. That figure was already discouraging. A later study in 2014 (Conviction in Equity Investing [https://www.pm-research.com/content/iijpormgmt/40/4/77]) found that the percentage of managers producing any net alpha had dropped from 20% in 1993 to just 1.6%. Larry reminds investors who are holding on to the hope that active management will deliver the goods that they are swimming against a strong current. The odds aren’t in their favour—and neither are the expenses. IT’S THE BEST OF TIMES FOR PASSIVE INVESTORS If you’ve embraced passive investing, it’s the best of times. The resounding success of this strategy, backed by a wealth of data and real-world results, should instill a strong sense of confidence in your investment decisions. For investors who believe that markets are efficient and that passive investing is the winning strategy, it has been the best of times. The availability of passively managed funds—index funds, exchange-traded funds (ETFs), and passive asset class funds-has dramatically increased. These funds cover a broader range of asset classes and factors, giving you more effective tools to diversify your portfolio. Passive funds are not only inherently more tax-efficient because of their low turnover, but some are also specifically managed with tax efficiency in mind. And if you’re using ETF versions, they become even more efficient. Then there’s the cost. Famous fund companies like BlackRock, Vanguard, and Fidelity are in fierce competition for your investment dollars. That competition has driven expense ratios down dramatically. CHAPTER 42: HOW TO IDENTIFY AN ADVISOR YOU CAN TRUST In Chapter 42, Larry provides guidance to those investors who believe they are best served by working with a financial advisor. He shares a roadmap to help them identify one they can trust. In Larry’s opinion, investing is like home repairs. There are two types of people: the do-it-yourselfers and those who hire professionals. You might fall into the DIY camp because you believe you can save money or because you enjoy the process. But, Larry adds, some people who try to do it themselves simply shouldn’t. If you don’t have the right skills, the cost of fixing mistakes can be much greater than hiring a professional in the first place. THE SWEDROE PRINCIPLE Here’s where Larry’s encouragement to use the Swedroe Principle comes in: If something is worth doing, it’s worth paying someone to do it for you. The Swedroe Principle advocates for the use of professional financial advisors for tasks that are complex or require specialized knowledge. This advice can empower you to make confident investment decisions. You may value your free time. Maybe you just don’t enjoy managing investments. Or maybe, like many, you’ve come to realize that if something can be messed up, you’ll find a way to do it. Whatever the reason, Larry says it’s okay to admit that managing your finances on your own may not be the best route. Studies show that few individuals possess both the knowledge and the discipline needed to be successful investors. If investing were compared to home repair skills, DIY investors would likely fare worse than DIY handypersons. And the financial consequences of poor investment decisions can be far greater than the cost of fixing a leaky faucet. On the other hand, if you do recognize your limitations, you can still come out ahead—if you choose the right financial advisor. HOW TO IDENTIFY A FINANCIAL ADVISOR YOU CAN TRUST Choosing a financial advisor, Larry emphasizes, is one of the most important decisions you’ll ever make. Surveys show that, in addition to financial expertise, trust is at the top of the list of what people want in an advisor. Trust is intangible and hard to measure, but it’s crucial. That’s why it’s important to ask the right questions and insist on the right commitments when choosing an advisor. Larry shares a checklist to guide your decision. He says when interviewing an advisor, ask them to commit to the following: 1. Client-first philosophy: The advisor should demonstrate that their core principle is to act in your best interest. 2. Fiduciary duty: They must follow a fiduciary standard, the highest legal duty of care, which is very different from the “suitability standard” used by many brokers. 3. Fee-only compensation: They should earn no commissions—just fees paid directly by you. This avoids the temptation to recommend products that benefit them more than you. 4. Full disclosure: Any potential conflicts of interest must be clearly disclosed. 5. Evidence-based advice: Their investment philosophy should be grounded in rigorous academic research—not guesswork or opinions. 6. Client-centric service: Their only goal in offering solutions should be to serve your best interest. 7. Personal attention: They should build a strong personal relationship with you and provide access to a team of professionals. 8. Skin in the game: They should invest their own money based on the same principles they recommend to you. 9. Integrated planning: They should help you develop a plan that includes investments, estate planning, taxes, and risk management tailored to your unique needs. 10. Goal-oriented decisions: Every recommendation should be made with your long-term success in mind. 11. Qualified professionals: The people advising you should hold respected credentials like CFP, PFS, or similar. FURTHER READING 1. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns [https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2010.01598.x],” The Journal of Finance (October 2010). 2. Mike Sebastian and Sudhakar Attaluri, “Conviction in Equity Investing [https://www.pm-research.com/content/iijpormgmt/40/4/77],” The Journal of Portfolio Management (Summer 2014). DID YOU MISS OUT ON THE PREVIOUS CHAPTERS? CHECK THEM OUT: PART I: HOW MARKETS WORK: HOW SECURITY PRICES ARE DETERMINED AND WHY IT’S SO DIFFICULT TO OUTPERFORM * Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds [https://myworstinvestmentever.com/enrich-your-future-01-the-determinants-of-the-risk-and-return-of-stocks-and-bonds/] * Enrich Your Future 02: How Markets Set Prices [https://myworstinvestmentever.com/enrich-your-future-02-how-markets-set-prices/] * Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers [https://myworstinvestmentever.com/enrich-your-future-03-persistence-of-performance-athletes-versus-investment-managers/] * Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find? [https://myworstinvestmentever.com/enrich-your-future-04-why-is-persistent-outperformance-so-hard-to-find/] * Enrich Your Future 05: Great Companies Do Not Make High-Return Investments [https://myworstinvestmentever.com/enrich-your-future-05-great-companies-do-not-make-high-return-investments/] * Enrich Your Future 06: Market Efficiency and the Case of Pete Rose [https://myworstinvestmentever.com/enrich-your-future-06-market-efficiency-and-the-case-of-pete-rose/] * Enrich Your Future 07: The Value of Security Analysis [https://myworstinvestmentever.com/enrich-your-future-07-the-value-of-security-analysis/] * Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return [https://myworstinvestmentever.com/enrich-your-future-08-high-economic-growth-doesnt-always-mean-high-stock-market-return/] * Enrich Your Future 09: The Fed Model and the Money Illusion [https://myworstinvestmentever.com/enrich-your-future-09-the-fed-model-and-the-money-illusion/] PART II: STRATEGIC PORTFOLIO DECISIONS * Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t [https://myworstinvestmentever.com/enrich-your-future-10-you-wont-beat-the-market-even-the-best-funds-dont/] * Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill [https://myworstinvestmentever.com/enrich-your-future-11-long-term-outperformance-is-not-always-evidence-of-skill/] * Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play [https://myworstinvestmentever.com/enrich-your-future-12-when-confronted-with-a-losers-game-do-not-play/] * Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance [https://myworstinvestmentever.com/enrich-your-future-13-past-performance-is-not-a-predictor-of-future-performance/] * Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon [https://myworstinvestmentever.com/enrich-your-future-14-stocks-are-risky-no-matter-how-long-the-horizon/] * Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe [https://myworstinvestmentever.com/enrich-your-future-15-individual-stocks-are-riskier-than-you-believe/] * Enrich Your Future 16: The Estimated Return Is Not Inevitable [https://myworstinvestmentever.com/enrich-your-future-16-the-estimated-return-is-not-inevitable/] * Enrich Your Future 17: Take a Portfolio Approach to Your Investments [https://myworstinvestmentever.com/enrich-your-future-17-take-a-portfolio-approach-to-your-investments/] * Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans [https://myworstinvestmentever.com/enrich-your-future-18-build-a-portfolio-that-can-withstand-the-black-swans/] * Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe [https://myworstinvestmentever.com/enrich-your-future-19-the-gold-illusion-why-investing-in-gold-may-not-be-safe/] * Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management [https://myworstinvestmentever.com/enrich-your-future-20-passive-investing-is-the-key-to-prudent-wealth-management/] PART III: BEHAVIORAL FINANCE: WE HAVE MET THE ENEMY AND HE IS US * Enrich Your Future 21: Think You Can Beat the Market? Think Again [https://myworstinvestmentever.com/enrich-your-future-21-think-you-can-beat-the-market-think-again/] * Enrich Your Future 22: Some Risks Are Not Worth Taking [https://myworstinvestmentever.com/enrich-your-future-22-some-risks-are-not-worth-taking/] * Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions [https://myworstinvestmentever.com/enrich-your-future-23-seeing-through-the-frame-making-better-investment-decisions/] * Enrich Your Future 24: Why Smart People Do Dumb Things [https://myworstinvestmentever.com/enrich-your-future-24-why-smart-people-do-dumb-things/] * Enrich Your Future 25: Stock Crashes Happen—Be Prepared [https://myworstinvestmentever.com/enrich-your-future-25-stock-crashes-happen-be-prepared/] * Enrich Your Future 26: Should You Invest Now or Spread It Out? [https://myworstinvestmentever.com/enrich-your-future-26-should-you-invest-now-or-spread-it-out/] * Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities [https://myworstinvestmentever.com/enrich-your-future-27-pascals-wager-betting-on-consequences-over-probabilities/] * Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases [https://myworstinvestmentever.com/enrich-your-future-28-29-how-to-outsmart-your-investing-biases/] * Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks [https://myworstinvestmentever.com/enrich-your-future-30-the-hidden-cost-of-chasing-dividend-stocks/] * Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot [https://myworstinvestmentever.com/enrich-your-future-31-risk-vs-uncertainty-the-investors-blind-spot/] Part IV: Playing the Winner’s Game in Life and Investing * Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand [https://myworstinvestmentever.com/enrich-your-future-32-trying-to-beat-the-market-is-a-fools-errand/] * Enrich Your Future 33: The Market Doesn’t Care How Smart You Are [https://myworstinvestmentever.com/enrich-your-future-33-the-market-doesnt-care-how-smart-you-are/] * Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally [https://myworstinvestmentever.com/enrich-your-future-34-embrace-the-bear-why-market-crashes-are-your-silent-ally/] * Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers [https://myworstinvestmentever.com/enrich-your-future-35-market-gurus-are-just-expensive-entertainers/] * Enrich Your Future 36: The Madness of Crowded Trades [https://myworstinvestmentever.com/enrich-your-future-36-the-madness-of-crowded-trades/] * Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap [https://myworstinvestmentever.com/enrich-your-future-37-38-the-calendar-is-a-crook-hot-funds-are-a-trap/] * Enrich Your Future 39: More Wealth Does Not Give You More Happiness [https://myworstinvestmentever.com/enrich-your-future-39-more-wealth-does-not-give-you-more-happiness/] * Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals [https://myworstinvestmentever.com/enrich-your-future-40-why-passive-investing-gives-you-back-what-wall-street-steals/] ABOUT LARRY SWEDROE Larry Swedroe [https://www.linkedin.com/in/larry-swedroe-18778267/] was head of financial and economic research at Buckingham Wealth Partners [https://buckinghamwealthpartners.com/]. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match. Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need [https://amzn.to/3HC9QnZ].” He has authored or co-authored 18 books. Larry’s dedication to helping others has made him a sought-after national speaker. He has made...

BIO: Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing. STORY: At the age of 13, Peter convinced his parents to open a brokerage account. He picked the broker’s newest “hottest pick” stock—an oil/gas transport company. He invested everything, thinking the people running the company knew what they were doing. Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss. LEARNING: Small losses are better than catastrophic ones. Knowledge is your only edge.   > “People who invest in individual stocks will make mistakes. There’s no doubt about that, but it’s way better to make a mistake with a few hundred dollars compared to $100,000.” > Pieter Slegers   GUEST PROFILE Pieter Slegers [https://www.linkedin.com/in/pieter-slegers-649354248/] is the founder of Compounding Quality Newsletter [https://www.compoundingquality.net/]. Pieter studied Financial Management at the KULeuven and graduated summa cum laude. He worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing. WORST INVESTMENT EVER At the age of 13, Peter earned his first paycheck by stocking shelves at a supermarket. Eager to grow his savings, he persuaded his parents to open a brokerage account (a feat for minors in Belgium). Despite his lack of investing knowledge, he diligently explored his broker’s platform for ideas. A new stock caught his eye on the broker’s “hot picks” list—an oil/gas transport company. He invested all his earnings, believing in the company’s potential. Peter didn’t conduct any research, despite his limited knowledge of oil and gas and his complete lack of investing experience. He simply trusted the “hot pick”. THE CRASH Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss. His family was not impressed by his poor investment skills and told him that investing was akin to gambling, and he should consider working for the government instead. Pieter felt like such a failure. However, that $300 loss was his best investment. It hurt, but it taught him never to follow others blindly. LESSONS LEARNED * Small losses are better than catastrophic ones. Losing $300 at the age of 13 beats losing $300,000 when you’re 40. Early pain builds immunity to big mistakes. * Knowledge is your only edge: If you don’t understand how a company makes money, you’re gambling, not investing. * Failure fuels obsession. That loss made Pieter devour investing books, 10-Ks, and financial news. Pain became his mentor. ANDREW’S TAKEAWAYS * Allow young investors to make mistakes with small sums (e.g., companies they understand, such as Netflix or Coca-Cola). * Humility beats hubris. 90% of professional investors at Goldman Sachs underperform. What makes you different? It’s your checklists, not confidence. * Read biographies, study market history, and connect patterns. Wisdom compounds like interest. ACTIONABLE ADVICE For parents guiding young investors, start with brands that they are familiar with and use in their daily lives, such as Coca-Cola, Netflix, and McDonald’s. When they drink a Coke, say: “You own a piece of this.” Cap play money at 5% and limit high-risk bets to cash they can afford to lose. Encourage young investors to do their homework. If they can’t explain the business model in two sentences, they shouldn’t own it. PIETER’S RECOMMENDATIONS Pieter recommends reading What I Learned About Investing From Darwin [https://amzn.to/4kX8qoZ] by Pulak Prasad if you want to perfect your investment skills. He also offers numerous free resources on CompoundingQuality.net [https://www.compoundingquality.net/]. Learning from others’ experiences, whether through books, online resources, or personal advice, is a valuable way to improve your own investing skills. NO.1 GOAL FOR THE NEXT 12 MONTHS Pieter’s goal for the next 12 months is to continue his learning journey by reading books, listening to podcasts, and engaging in other educational activities. He understands that continuous learning is the key to successful investing. PARTING WORDS   > “It’s amazing what Andrew is doing. I had a lovely time. Please give him a hand, send him an email, or support him in any way you can. If people have questions for me, I’m always happy to help via combining quality.” > Pieter Slegers   [spp-transcript]   CONNECT WITH PIETER SLEGERS * LinkedIn [https://www.linkedin.com/in/pieter-slegers-649354248/]  * Website [https://www.compoundingquality.net/] ANDREW’S BOOKS * How to Start Building Your Wealth Investing in the Stock Market [https://amzn.to/3qrfHjX] * My Worst Investment Ever [https://amzn.to/2PDApAo] * 9 Valuation Mistakes and How to Avoid Them [https://amzn.to/3v6ip1Y] * Transform Your Business with Dr.Deming’s 14 Points [https://amzn.to/3emBO8M] ANDREW’S ONLINE PROGRAMS * Valuation Master Class [https://valuationmasterclass.com/] * The Become a Better Investor Community [https://astotz.kartra.com/page/become-a-better-investor-community] * How to Start Building Your Wealth Investing in the Stock Market [https://academy.astotz.com/courses/how-to-start-building-your-wealth-investing-in-the-stock-market] * Finance Made Ridiculously Simple [https://academy.astotz.com/courses/finance-made-ridiculously-simple] * FVMR Investing: Quantamental Investing Across the World [https://academy.astotz.com/courses/fvmr-investing-quantamental-investing-across-the-world] * Become a Great Presenter and Increase Your Influence [https://academy.astotz.com/courses/gp] * Transform Your Business with Dr. Deming’s 14 Points [https://academy.astotz.com/courses/transformyourbusiness] * Achieve Your Goals [https://academy.astotz.com/courses/achieve-your-goals] CONNECT WITH ANDREW STOTZ: * astotz.com [https://www.astotz.com/] * LinkedIn [https://www.linkedin.com/in/andrewstotz/] * Facebook [https://www.facebook.com/andrewstotzpage] * Instagram [https://www.instagram.com/andstotz/] * Threads [https://www.threads.net/@andstotz] * X [https://twitter.com/Andrew_Stotz] * YouTube [https://www.youtube.com/c/andrewstotzpage] * My Worst Investment Ever Podcast [https://itunes.apple.com/us/podcast/my-worst-investment-ever-podcast/id1416554991?mt=2]