Does History Repeat Itself?

What’s Poppin’,

This is the Master Money Newsletter where we teach you how to master your money so you are the smartest at your holiday dinner table. It’s payback time for when your brother-in-law said “have fun staying poor” when you didn’t put all your money in crypto.

Here’s what we have on deck today:

Why you should not worry about short-term returns.
How to maximize travel rewards.
Why we can’t have nice things.

You should ignore all short-term market problems.

The “Dude with a sign” should have this on his cardboard sign.

It is one of the most important lessons you can learn as an investor. Once you learn this, all your stress around investing seems to melt away. You will make less mistakes. You will be a better investor.

But it is a hard lesson to learn.

See, in the short run, the market is run by investor emotions. This is why day trading is one of the biggest scams of all. Nobody can predict what other people's emotions will be (unless you’re a mind reader. Newsflash, you’re not).

Emotions will cause you to lose money in investing.

In the long run, the market is dictated by one thing. Investment returns earned by corporations.

What this means is that in the long run, the market is pretty darn predictable. It has been for a century. Yet, people still try to outsmart the market.

This is why when the market is down you do not panic.

Let me say it louder for your uncle who day trades in his spare time in the back.

DO. NOT. PANIC.

Why?

Because historically speaking the market always recovers. Down years are normal. They are as normal as the mailperson coming to your house every day.

The insanity always returns to sanity.

1/ The 1910s had some terrible investing years. What followed the 1910s? The roaring 20’s.

2/ The rough 1940s (WW2) were followed by the booming 1950s.

3/ The discouraging 1970s were followed by the soaring 1980s.

4/ More recently, the 2008 great depression was followed by a decade of the highest stock returns of all time.

Here is a chart that shows the power of staying invested.

This pattern happens over and over again without fail.

In fact it can destroy your returns if you let your emotions get involved.

So when you catch yourself worried about what happened this year. Just know that stocks may be on sale.

It is all about your mindset and how you look at the situation.

There is one thing I do know. The long-term investor always wins.

For me, that means investing in low-cost index funds and ETF’s. I know we can’t beat the market. So instead, I have become the market.

Just keep buying.

"You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets." — Peter Lynch

High-Performance Book Club 📚

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The Little Book of Common Sense Investing

INDEX FUND PRO IS LIVE 1.2.22

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Gain Clarity. Get a clear plan of how to put an investment plan together so you can achieve financial freedom.

Compound Interest Will Change Your Life. We break it down and show you how just a few hundred dollars a month can become a huge pile of money over time.

Investing 101: Learn the basics of stocks, bonds, index funds, and ETFs.

Automate Your Money: Learn to automate your investment plan so you can set it and forget it.

Set Yourself Up to Retire. Simple explanations of each retirement account, how they work, and what order to invest.

The Investors Checklist: I simplify which accounts you should invest in and in what order.

Diversification: Discover how adding international index funds, bonds, and US index funds, can help your portfolio weather any storm.

Get Inspired: We walk through how much you need to save and invest to become a millionaire. By age!

How to choose index funds: Take the guesswork out of investing by understanding the different types of ETFs and Index Funds.

Reduce your taxes! Not your CPA’s tax lessons. Learn how reducing your taxes with retirement accounts puts more money in your pocket.

Why Investing Makes You Wealthy. Still on the fence if investing is legit? We prove why it is the best way to build wealth.

How to buy index funds and ETFs: I hold your hand and show you exactly how to buy index funds in my own personal accounts.

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The Personal Finance Podcast 🎙️

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