A&B #87

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🙏  Support:This week's newsletter was made possible by Money Scoop.Money Scoop is a personal finance newsletter that will teach you how to be smarter with your money. If you want to learn how to become better at budgeting, saving, and investing your money, this newsletter is for you.Sign up for FREE here!

👋 Hey everyone,

Here are a few popular posts you may have missed:

• 20 Blogs worth reading.

• 20 YouTube channels that will make you smarter.

• 20 Most popular Alex & Books threads of all time.

PS: Alex & Books passed 

on Twitter this week. Thank you for your support everyone!!

📚 Book Lessons:

This week's book is The Behavior Gap by Carl Richards.This book is all about explaining why people do dumb things with money. It focuses more on understanding human behavior rather than financial tools and tactics. If you enjoyed The Psychology of Money, you'll like this book.Here are three lessons from it:1) The Market Is Driven By 2 EmotionsEvery investor is constantly driven by one of two emotions: fear or greed. It's important to remember that these emotions are two sides of the same coin and have their own pros and cons:

• If you're fearful, it will lead you to make more conservative investments, but as a result, you'll miss out on some gains when the market goes on a bull run.

• If you're greedy, you'll get rewarded during a bull run but suffer the pain of a huge drop when it comes to a sudden end. 

Neither side is better than the other. You need to aim for a balance that reflects your own emotional strengths and weaknesses so that you won't feel compelled to jump in or out of the stock market at the wrong time. That's why it's important to have a strategy and make financial decisions based on what you know, and not what you feel.

2) Be Careful of Financial EntertainmentYour favorite financial magazine or TV show should not be your financial advisor.In fact, you probably shouldn't make any investment decisions based on what you see in the news. Why?A few reasons:

• Magazines and TV shows are in the business of getting as many eyeballs as possible, they don't care about your investment portfolio.

• Constantly watching the news will overload you with information and make you second-guess your financial strategy.

• By the time you hear about the events on TV or read about it in the newspaper, the market has already shifted and adjusted to the news.

Here's what Carl advises: "Don't let your fears run the show...almost none of that stuff on CNBC matters. Nothing bad will happen if you miss the endless commentary." 

3) Risk Is The Price You Pay For Returns

Here's one of the most important laws of investing: if the returns are high, so is the risk.If you want 15-30% returns, you can buy stocks. But there's also a chance your investments could go down negative 15-30%.If you want 100%+ returns, you can get into speculative investments like crypto. But there's a high probability your investment could go to zero.Or if you want to play it safe, you can buy bonds or CDs. Your money will be secure, but the downside is you'll get only 1-3% returns.So the next time someone tells you about an investment that is a rocket going to the Moon, remember that it's also a rocket that could explode at any time.

✅ Actionable Advice: 

 1) Remember that the market is driven by 2 emotions:

• If you're fearful, you'll miss out on gains during the bull run but not take as big of a hit when the market drops.

•  If you're greedy, you'll feel great when the market is hot but you'll get burned when things shift to a bear market.

2) Don't take financial advice from TV shows or magazines:  

• TV shows and magazines are for entertainment, not education.

• By the time you hear about an event in the news, chances are the market has already adjusted to it and you'll be too late to capitalize on it anyway.

3) Remember that high returns = high risk:

• Understand your risk tolerance and plan accordingly.

• There's no such thing as a safe high-risk investment.

🎧  Podcast Update:No new pod, but here are 3 new book rec videos:

• 5 Books To Make Better Decisions

• 5 Books To Better Manage Your Money

• 5 Books That Will Make Girls Crave You

📖  Reading Lesson:Stop wasting hours looking for the perfect book, start with these:

• Health: Ikigai

• Habits: Atomic Habits

• Writing: On Writing Well

• Productivity: Indistractable

• Emotional Control: The Daily Stoic

• Social Skills: How To Talk To Anyone

• Personal Finance: The Psychology of Money

⭐️  Weekly Quote:If you don't like writing in your books...Read this quote.

Thank you for your support everyone, I'll see you next Sunday!Read on,Alex W.