Lecture Notes: Financial Wisdom and Investment Strategies

Introduction

• Speaker: Felix, retired in early 30s, former wage slave
• Focus: Advice for younger self, 40 lessons for wealth accumulation
• Existence of a free workbook at felixfriends.org/40lessons

Key Principles for Successful Investing

Mental Foundation

1. Mastering Money

   • Anyone can learn investing; no need for genius
   • Practice and learning from smart people are key

2. Patience

   • Wealth grows slowly, patience is crucial
   • Reference to Warren Buffett's success post-65

3. Emotional Control

   • Avoid fear and greed; have a clear investment plan

4. Knowledge over Luck

   • Understand market patterns
   • Write down reasons for investing in stocks

5. Start Small, Win Big

   • Even small, regular investments compound over time
   • Example: $25/week builds a fortune

6. Independent Thinking

   • Avoid following trends blindly; aim to buy low, sell high

7. Learning from Mistakes

   • Analyze and learn from investment errors

8. Goal Setting

   • Clear financial goals provide direction

9. Power of Compounding

   • Example: $100/month at 8% for 30 years becomes $149,000

10. Use the 4% Rule

    • Withdraw 4% annually from retirement portfolio

11. Regular Investment

    • Invest weekly/monthly to beat inflation

12. Defeat Inflation

    • Invest in stocks to outpace inflation

13. Slash High Debt

    • Pay off debts with high interest rates first

14. Emergency Fund

    • Save 3-6 months of expenses to avoid selling stocks in emergencies

15. Minimize Fees

    • 1% fees can significantly reduce investment growth

16. Weekly Budgeting

    • Regular review of expenses helps find savings for investment

Investment Strategies

17. Choose Strong Companies

    • Invest in companies with steady profits and loyal customers

18. Growth Stocks

    • Invest a small percentage in high-risk, high-reward stocks

19. Dividends

    • Stocks paying 3-5% dividends can be reinvested for growth

20. Smart Selling

    • Use stop-loss rules to maximize gains

21. Quickly Drop Losers

    • Sell off stocks with poor performance promptly

22. Diversification

    • Mix investments in stocks, real estate, and ETFs

23. Avoid Cheap Stocks

    • Low PE stocks often indicate poor business health

24. Focus on Cash Flow

    • Prefer companies with strong cash flow

Tools and Techniques

25. Use tools like Tradevision.io

• Provides advanced market data and indicators

26. Buy Indices Below 200-Day Moving Average

• Capitalize on market downturns

27. Trend Lines and Stop-Losses

    • Use technical analysis to make informed decisions

28. Volume and Price Bars

    • Monitor stock volume as an indicator of market moves

Daily Practices and Long-Term Success

33. Plan with a Partner

    • Collaborate on financial goals for accountability

34. Ignore Market Noise

    • Focus on stock quality over news headlines

35. Reinvest Gains

    • Continuously reinvest profits to accelerate growth

36. Buy on Dips

    • Use market downturns to increase investments

37. Hold Good Stocks

    • Retain stocks as long as they perform well

38. Quarterly Reviews

    • Regularly assess the performance of investments

39. Prioritize Investing

    • Invest before spending to ensure wealth accumulation

40. Stay Committed

    • Consistent investing through market fluctuations leads to success

Conclusion

• Encouragement to share insights with others
• Wishing for a successful financial journey