How I doubled my money in a recession

Kevin here.

I lived 30 miles away from college

During undergraduate, my uncle would drive me to school every Sunday and teach me about investing.

Being 18, I had no idea what the hell I was doing. Investing scared the shit out of me. I thought investing meant…

  • People in suits

  • People yelling at each other to buy or sell stocks

  • …LOTS and LOTS of drugs
Thanks to Wolf of Wall Street

It just seemed so complicated.

I just wanted something simple and easy.

My uncle was an example that it was possible to become a millionaire by investing. What was his secret? Was it his sexy new investing strategy or high frequency stock trading? No.

Like the baller Warren Buffett once said…

A lot of people don’t invest because they don’t know how to invest, want to figure it out later, or are scared to lose money. Often times it’s this fear that prevents opportunities. We don’t realize that we’re already losing money to inflation by letting our money sit in a bank.

But how do you control your emotions? Where do you begin? Perception.

One day shit will hit the fan

Most people go through life crossing their fingers and hoping nothing bad will happen… and they have the same mentality when investing. Reality check: shit happens to everyone.

Oh gawd.

Look at the trend for the last 10 years for the Vanguard index funds.

Trend last 10 years

Downturns in the market are inevitable. The real question should be how are you going to recover when shit hits the fan?

How to see opportunity in all situations

When the market is going up, everyone is happy… but what happens when the market shits the bed? People panic.

A piece of me died when I saw this on Reddit.

Reddit fear of investing

My uncle ALSO lost over 60% of his money during that same time. It was a hard time for everyone. But what did my uncle tell me when I asked him for advice?

Uncle: Now is the time to buy.
Me: Wait… what? Why would I invest if the market is doing poorly?
Uncle: Trust me fam. I gotchu like pikachu!

Day one ninja

Okay. So maybe my uncle didn’t REALLY say that last part… but you get the point. Right after that conversation, I took $3000 and invested into more index funds and my money grew.

Watch me dip

I was lucky in 2010. It could have gone the other way, but over the long run index funds have trended upwards roughly 8-12% per year.

Long term
Past performance doesn’t mean you will win… but it’s pretty likely.

My uncle’s strategy

God damn. My uncle’s strategy was SO simple. How did it work?

Ghetto drawing
My ghetto drawing

He automatically invested a set amount every month into index funds (eg. $1000/per month). This is known as dollar cost averaging. When the market shit the bed, he would dump more money in.

Instead of focusing on losing money, he saw it as a great time to buy. SO CHEAP.

What’s that sound? THE SOUND OF DUH GOOD DEAL

There is opportunity with every situation

This article isn’t about index funds or investing. It’s about having the right mindset against for any obstacle.

Think about how most people react to bad news.

They complain about how it’s unfair or might blame others. Even though it might be true, they do everything BUT focus on the ACTUAL problem. We can’t control what happens to us, but only control how we react.

So instead of looking at the situation as a problem or obstacle, it’s an opportunity to do something different, look at the problem in a new way, and to improve our position in our life.

Here are some examples…

  • Getting over a breakup?
    • Instead of spending time fighting, you can focus on shit YOU want to do
  • Fired?
    • It’s opportunity to figure out other ways to make money
  • Fucked up your macros by polishing off a bag of chips?
    • Time to look into healthier alternatives AKA QUEST CHIPS <3

So if when bad shit happens, it’s not the end of the world. Take it as an opportunity to re-strategize. At the end of the day things can ALWAYS be worse.

Need help? What setbacks are you going through right now? Let me know by emailing me at subscribers@refugeehustle.com or leave a comment below.

Kevin

PS… I get a lot of questions about investing, what sorts of things do you want to know? What are some reasons why you don’t invest?

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9 thoughts on “How I doubled my money in a recession

  • April 10, 2016 at 5:10 am
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    Hi Kevin,

    What are some tips to get started in investing? Part of the reason why I have not started is because people say that reading books on investing is not effective. Others have told me it is way too risky if I want a decent return. I am so lost!!!

    Rick

    Reply
  • April 19, 2016 at 5:27 pm
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    Hi Kevin,

    What services do you recommend when you get started in investing? (ex. etrade, fidelity, schwab)
    Thank you,
    Thomas

    Reply
  • April 19, 2016 at 8:07 pm
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    hey what are some books you recommend about stocks for new comers

    Reply
  • April 19, 2016 at 9:58 pm
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    What service should starters use, what am I looking for on this website or in general.
    How much should I be investing (% of my total $)
    Im a 16 year old, can I start now?
    Tips youve picked up investing over the years.

    Reply
  • April 20, 2016 at 4:13 am
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    Kevin,

    Im 15 working part time slowly making money in australia. I have 2k to my name and it will grow slowly but once i finish school it will increase, my question is how do you invest and what should you invest in

    Reply
  • April 20, 2016 at 8:58 pm
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    Kevin how much research do you put into a stock before investing in it? What kind of research do you do and how do you conduct that research?

    Reply
    • May 8, 2016 at 4:22 pm
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      So to put it in short… Risk and benefit.

      1. Taxes
      2. Fees
      3. Performance/potential risk

      These are some of the things I look at.

      Past performance ≠ future, but it can help you make a better decision especially if you’re going with a managed fund.

      With fees, people are not going to manage your funds for free LOL. So there’s expense ratio (how much % they take from you), front and back end fees (if they charge you upfront when investing or take out), etc…

      Performance… the potential ROI you can get from the fund and the relative risk. With S&P 500 you are more diversified than a stock because you are buying small chunks of each company. With a stock, if it tanks you’re fucked. But on the flip side you could purchase something like Apple back in the day and have it blow up.

      Taxes… So there’s tax advantaged accounts (401k, Roth IRA, etc…) but also with taxable accounts there’s things like capital gains tax. Basically mudda Unco Same always gotta get his cut too.

      I’m actually in the middle of creating a investing course… so stay tuned.

      Reply
  • May 10, 2016 at 4:58 am
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    Hi Kevin,

    I just wanted to know what the difference is between the Vanguard 500 index fund versus the Vanguard ETF?

    Also, I’m looking forward to the investing course!

    Reply

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