Why George Forgets His TD Ameritrade Password
George will be the first to tell you that his lifestyle comes before anything else. So it's no wonder he waits for assets to become cheap, then loads up, then forgets about them.
In fact, he forgot his TD Ameritrade password the last time he tried logging in, it's been that long. There's an investing clue in there.
His approach is much different than some of us who log into our TD Ameritrade or Interactive Brokers account every morning and obsess over whether we have too much copper in our portfolio.
Many of us in the trading/investing space most certainly need to seek out more adventure in our lives, anyway.
And it's probably a good idea to break that pesky habit of staring at the number of currency units in our account(s) as if it's some kind of life score. Not healthy.
The point is, if you're refreshing stats, trying to time markets, or entering and exiting tickers like a trader (daily, weekly, monthly), and you believe you are an investor, then maybe it's time to consider the George approach.
Investing is boring and it should be
What George does is the complete opposite of what most amateurs do. Why?
Because George has mastered the buy-side of investing. George makes his money when he buys an investment, not when he sells it. Sounds counter-intuitive I know. But hear me out.
Amateurs tend to buy a stock at $3, then try and sell it at $5. Think of stocks like Tesla, or GameStop. These things are over-hyped, over-valued, speculative plays that make no sense on paper, and their valuations are at absurd levels.
They might be great if you are a technical trader looking to cash in on your skills as a chart reader. But from a long-term macro investing strategy they are all expensive, which makes them risky to own for 3 – 5 years.
How Deep-Value Investors Invest Their Money
The Pros wait for that $3 stock to drop to $0.50, then they buy it. Else they don't buy. It's a game of patience. It's not a casino.
They look for deep value in neglected sectors poised for growth. They buy when nobody else is buying and then wait. It's boring, but it works.
Take March 2020, when the markets crashed hard. That was a good time to buy $3 stocks at $0.50. That is what George did. That is what Lyn Alden did. That is what Chris MacIntosh did.
That's why George forgot his password. He loaded up, then walked away.
The amateur is driven by dopamine. He's looking for a rush, a fix. He's excited to compound his money, and he's looking for the next 10-bagger. It's a gamble. Pure speculation. He's driven by emotion and he has no concept of investing. He's a gambler.
He's especially dangerous if he has a couple of wins under his belt, too, because now he's a ticking time bomb. All he needs is one more reckless trade and his account blows up.
Emotion is a profit killer
Chris MacIntosh, a Rebel Capitalist Pro mentor, and Glenorchy Capital money manager, buys investments when they are cheap, and sells them when they are expensive.
He doesn't time markets, and he doesn't trade in/out of stocks.
His edge is having a firm understanding of the business cycle and the sectors that make up the business cycle.
Chris doesn't invest using leverage, he doesn't dollar cost average in on a pick that is going parabolic either.
He picks his sectors, then digs deep into those sectors, then picks great companies, and builds a basket of well-diversified companies inside each sector, then waits. That's it. Chris is always early, yet the payoffs could be 50x the investment.
Stop being so rigid with your portfolio
One thing we tend to notice in Rebel Capitalist Pro, and those investors who follow George's public live Q&A on youtube each Sunday, is that they tend to get caught up in the rigidity of asset allocations in their portfolio.
“Just exactly how are you dividing up that 80% of your portfolio that pays you to own it?”
George Talks about the 10/80/10 portfolio. Watch the video above. This is a simple investing formula, that he created, that practically guarantees cash flow, insurance, and enough speculative appreciation to meet the demands of your lifestyle when done right.
Roughly 10% of George's investment cash goes into buying physical gold, 80% goes towards investments that pay you to own them, and the final 10% goes into speculative assets, like Bitcoin or anything else with a high asymmetric upside.
The cash flow (80%) should maintain your cost of living. The insurance (10% physical gold) is for when shit hits the fan, and the speculation (10%) should make you richer in the long run.
Assets that pay you to own them (the 80% that matters most)
Real Estate Investments
The best performing asset that pays you to own it is Real Estate. Real Estate is a multi-dimensional asset class. Learn it. Get into it. It will make you rich.
You can take out a 30-year fixed-rate mortgage, which is like shorting the dollar over the next 30 years. Your tenants restore equity in the property through rents collected, which can be stripped out later, then you can use it to cover your cost-of-living expenses, tax-free (you don't pay taxes on borrowed money), or you can buy more rental property.
One trick to being a great macro investor is having Real Estate in your portfolio.
Dividend-paying stocks also pay you to own them. However, it's going to take a decent-sized portfolio to earn enough cash flow to satisfy your lifestyle needs if you focus exclusively on dividend-paying stocks.
Dividend-paying stocks are low-hanging fruit and both Lyn Alden and Chris MacIntosh talk about individual stocks a bunch inside Rebel Capitalist Pro.
There is no shortage of great companies that pay you to own them, that are ripe for the picking inside Pro.
In fact, Lyn Alden gives you access to her portfolio's inside Rebel Capitalist Pro. So you have no excuses, really.
Pros to owning Real Estate
You can see there are trade-offs. Real Estate is great because it only takes 20k to buy a $100k investment property in a linear market, that generates $1000/mo in rent. Cash flow can really add up this way and the rich own assets. So this is a great way to stock up on assets.
Cons to owning Real Estate
Despite being able to buy turnkey real estate investments, which come complete with property management, access to cheap money, mentorship, and a network of support, you still have to deal with people.
It's never been easier to own real estate, which makes finding great deals that much harder.
What sets guys like George, and even some professional money managers like Chris MacIntosh apart from the average Joe and Jane, is their ability to not overthink the details.
They don't obsess over portfolio allocations. They have a rough idea. They master the art of buying great companies at cheap prices, then wait for them to get expensive, then sell.
They purposely make investing boring so they can live a life full of fun and adventure. It's 100% possible and real people do it every day.
How about you? Are you nose-deep in charts every day, obsessing over the next opportunity? Or are you a buy cheap, then a sell-when-expensive investor who checks in from time to time?
Let us know how you approach long-term investing in the comments.
I love that message and authenticity.
Looking forward to shaking your hand in Miami next month, George.
[…] The 10-80-10 rule says that you have 10% of your investable net worth, you put it into gold. […]
George I follow your podcast and appreciate your insights on freedom and macro. I run a $500 million commodity trading company that specializes in plywood/lumber in the USA. We take ownership of the goods and deliver thousands of truckloads and carloads of wood every month to distributors, retailers, and manufacturers monthly. Obviously lumber prices lead the inflationary trend. But Container rates were $4000 in 2019. That’s Asia main ports to USEC. Now they are north of $20k. And have been for almost two years. Ports are a mess. I have over 180 containers in demurrage now. Warehouses are stuffed to… Read more »