"I'm telling you man if you invest in that cottage house it will be worth double in a few years, especially if you sell it in a warm summer"
"This kid is buying them in bulk and selling them individually for double the profit you gotta check out http://www.cantonfair.org.cn/en/index.aspx"
"Currency arbitrage is the way to go, Columbia for the win"
"A business that makes people live longer is the way to go"
"Australia is booming, a lot of work there in the mines, great craic too!"
I did my Leaving Cert the summer of 2008. I went to uni 3 months later. 1 month later news broke that a recession had begun due to the housing market crash (its going to be a tough 4 years in uni I taught to myself and it was!). The death of The Celtic Tiger, an economic term used to describe the uber progression of the Irish economy since the mid 90's, fueled by the construction sector and up to 150% mortgages from Irish banks and people investing with emotions and a fear of missing out. I enjoy looking back on it and learning what was happening to my country during my youth, I was lucky enough to be too young to be involved in it but I think one of my fav memories from my secondary school are my fellow peers (some of whom had parents who had sold land or built a house and sold it or took out mortgages to buy a house with a chandelier on the inside!) using a 50 euro note to buy a 80 cent sausage roll with sauce and getting 49.20 in change. The 50 euro note was less healthy than the food it bought! These young confident 17 year olds with nothing in the brain but cars and women were not alone:
http://www.independent.ie/entertainment/banter/trending/14-things-you-wont-believe-irish-people-did-during-the-celtic-tiger-29825905.html
Helicopters dont fly over anymore! Next time they do maybe Ill be in one. The average person has their own idea of what to do with their money from the cute heur of a Kerry man to the big northern men from Tyrone and everyone in between. Some of the quotes above are ones I've heard and there's loads more. How many of these people who bought houses ever invested in their lives? How many of them ever got an investment return apart from a 2% savings account?! 99% hadn't a clue and didn't want to know or hear where their imaginary money was coming from. I enjoyed the rise in milk price in 2009 because farmers finally got a chance to say "I TOLD YOU SO!!".
Enough of what others say, what do I say? Well, I believe before you invest £250,000 into an investment you plan on speculating with riddle me this how does someone invest £1000? Ha? Hmm? Well? You are not sure, are you? :) Answer this and then you will see how bad and innocent a position the bank has you in. Most people think building wealth is a lot about investing and buying the right shares or houses or land or cattle. While this can certainly help, the reality is that the big money is made through deals that you make yourself. What do I mean? How many times have you seem opportunities and see them a year later and say oh for Gods sake if I only invested £100 id be a happy boy? You need to pick your opportunity and research it to death, then put your ideas proof of R.O.I on paper, then show it to people, ask them nothing - wait for their response, they may love it and want to invest £1000 aswell, or maybe it is flawed, their questions with become your answers. If your idea is solid then with £1000 from you and £1000 from others and you are away.
OPPORTUNITY YOU SPOTTED + OTHERS £ + HARD WORK = HAPPY BOY
Key words from todays lesson: FOMO fear of missing out
Emotional money: Money you are gambling with not knowing or researching on fully where its going. :P
"The tortoise always wins the race" and "my money can work harder than I ever could" - I will make a new blog with these headings shortly. Slan go foill mo chairde!
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Picture courtesy of siaann @ toonpool.com