Do you know what finance myths hold you back from creating wealth through multiple streams of income?
If you’re feeling overwhelmed and frustrated by the complex world of finance and investing, despite your best efforts to educate yourself, then you are not alone!
Many individuals struggle to decipher the jargon, navigate the maze of investment options, and make sound financial decisions. Despite taking advice from well-meaning friends or relying on outdated information, they find themselves confused and uncertain about where to invest their hard-earned money.
However, by debunking common myths and misconceptions about finance and investing, you can gain the clarity and confidence needed to make informed investment decisions and finally achieve the results you desire.
In this episode, you will be able to:
- Unearth the crucial role emotional control plays in smart investment decisions.
- Discover the power of multiple income streams for financial resilience.
- Illuminate misunderstood aspects of finance and investing, and expose the truth behind common myths.
- Grasp the mechanism of options trading in wealth creation and realize its dire need for adequate knowledge.
- Recognize the essence of having a defined trading plan, and the importance of understanding the emotional factors involved.
Table of Contents
The Importance of a Second Income
Most of us understand the value of having a steady, reliable income. It pays the bills, keeps food on the table, and provides that warm fuzzy feeling of security. But what about a second income?
We’ve all had those moments when we wished we had a little extra on the side, whether to cover unexpected costs or fund a dream holiday. The truth is that a second income can act as a helpful buffer, providing an extra layer of security and allowing us the freedom to explore other financial opportunities without worrying about basic necessities.
During the interview, Simon stresses the importance of having a second income or a nest egg. He brought attention to Bankrate’s 2023 Emergency Savings Report , a survey detailing that an alarming 57% of Americans would be unprepared for a $1,000 emergency expenditure, signaling how financially unprepared most of us are.
He proposes that by diversifying your income sources, it’s possible to better manage during financial downturns or challenging circumstances. He also emphasizes that asset owners often fare better during inflation and that diversifying your income is absolutely key to balancing out wage gains with asset appreciation.
Chapters
00:05:43 – Martial Arts Discipline in Life
00:09:29 – Overcoming Emotional Investing
00:12:15 – The Importance of a Second Income
00:14:57 – Finding Fulfillment in Life and Work
00:15:41 – The Shifting Nature of Markets
00:17:10 – Overcoming Myths and Comfort Zones
00:21:18 – Demystifying Finance and Investing
00:25:41 – Emotion Management in Trading
00:29:25 – Clarity on Trading Plan
00:31:45 – Anyone Can Trade
Finance Lessons Learned from Jeet Kun Do
Today we delve into the world of finance and investing with the dynamic and accomplished Simon Ree. Based in Singapore, Simon brings to the table an impressive 30-year career spanning two financial industry behemoths, Goldman Sachs and Citigroup.
With a keen understanding of market trends and investor behavior, Simon has dedicated his life to guiding individuals toward financial freedom and prosperity. The precision and emotional control, hallmarks of his practice as a Jeet Kun Do instructor, also inform his approach to financial decision-making, making for a fascinating amalgamation of disciplines.
Maintaining Emotional Control
Trading, as we all know, can be a venture that exacts a high emotional toll. The rapid rise and fall of the markets, and the uncertainty of what might happen next, all have the potential to trigger intense emotions that can cloud judgment and lead to impulsive decisions.
That’s why learning to maintain emotional control is so important. No one likes to lose money, but when we allow our fear of loss or our desire for quick gains to dictate our actions, we’re more likely to end up in the red. And so, the key to successful trading lies in finding that sweet spot between being emotionally invested in our ventures and yet not allowing our emotions to dictate our decisions.
Overcoming Emotional Investing
Familiar phrases like ‘buy low, sell high’ aren’t just there to look pretty on motivational posters. They’re there as reminders of the rational, considered approach we should be taking when investing.
It’s easy when the markets are soaring, and everyone’s talking about their staggering gains, to be swept up in the euphoria and forget those grounded principles. But that’s when we need them most.
Emotions and investing might not always be the best mix, and the most successful traders know how to separate the two.
When a person loses money on a particular stock, the natural inclination can be to try and make up for the losses by taking an aggressive position on that same stock, often to the individual’s detriment.
Simon cautions strongly against such revenge trading and instead urges for rationality, risk management, and diversification. He firmly believes in maintaining discipline, and when the traders feel like celebrating their successes, Simon advocates for going back to cash instead- as success can lead to complacency and riskier decisions.
The Shifting Nature of Markets
Markets are, by nature, in a state of constant flux. This dynamism is what makes trading exciting and rewarding but can also be a source of anxiety and uncertainty. It’s essential to keep in mind that markets will always change and that industries will never deliver consistent results.
Embracing this reality not only prepares us better to withstand market shocks but also opens us to a myriad of opportunities that come with these fluctuations. On a similar note, Simon agrees about the shifting nature of markets, indicating that even during a recession and potential job loss, it’s possible to see the silver lining and dig into the multitude of opportunities that arise in such situations.
When some are worried about the future, Simon encourages looking at branching out and seeking new and promising ventures. He believes in adapting to market changes and leveraging them for positive outcomes.
Simon Ree
Simon Ree has worked as a professional in the financial markets since 1992 when he started his career as a futures broker. He loves studying the markets, trading the markets and he loves traders, too.
During his 28-year career, Simon worked at Goldman Sachs where he founded and headed up the Markets Desk in Sydney. He subsequently held senior positions at Citibank in Singapore. During this time, he developed considerable expertise in financial markets, with a particular emphasis on stocks and options.
Simon is the author of the #1 Amazon Best Seller, The Tao Of Trading: How To Build Abundant Wealth In Any Market Condition. Simon’s passion extends beyond trading the markets, to analyzing the markets, talking and writing about the markets, and teaching others how to trade the markets.
Since 2017, Simon has successfully mentored hundreds of aspiring traders on the simple techniques he uses to generate consistent cash flow from the stock market.
Resources
Subscribe to Beyond the Rut on your favorite podcast player.
Follow Simon Ree on LinkedIn and Twitter.
You can also check out Simon Ree’s website, TheTaoOfTrading.com, to learn more about booking Simon for your next event or podcast.
Other episodes and articles you’ll enjoy:
Travis Smith: Unlocking Financial Freedom Through Tribevesting – BtR 336
What Forrest Gump Taught a 6-Year Old About Wealth – BtR 275
How to Prepare for Truly Living in Retirement – BtR 254
Connect with me:
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YouTube: https://www.youtube.com/channel/beyondtherut
Twitter: https://twitter.com/beyondtherut
LinkedIn: https://www.linkedin.com/in/jerrydugan/
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Transcript
