Paul, 27, thinks he has a winning strategy. Headlines about President Donald Trump’s trade policies and looming tariffs, he and his wife Vicki saved $80,000 and invested it in stock options.
Paul bets that automakers like Tesla will take a hit. He is confident that he can time the market and make money with his choice or choice for sale. But the market has other plans.
Instead of reducing the value, the stock stayed strong, and Paul's positive effect quickly turned into a huge loss.
Paul told Ramit Sethi on the Podcast of Master of Finance, “It’s a very difficult thing.” I'll teach you that you have money.
The personal financial advisor invites the couple to unravel what went wrong and important in the long game of wealth.
When Paul made his first choice deal at Tesla, he rode high, about $3,000. However, the initial small victory quickly fell into devastating losses.
By the next day, Paul lost $80,000 and decided to sell his position to “submit to the choice of trading God.”
"I was destroyed," he admitted to Sisi.
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The money disappeared within 24 hours and the couple's emergency fund has been kept for two years. $80,000 is not only a number, but it is safe.
"It's a big number for both of us," Vicky added. "The meaning behind it is freedom."
Paul was suppressed not only by a financial blow, but also what it meant to his relationship. He called Vicky to tell her what was going on, describing it as a difficult pill for swallowing.
Vicky recalls the pain of hearing Paul's voice. “I heard my husband was very anxious and very painful and my direct reaction was to become a calm, cool, collectible.”
Paul and Wiki looked solid financially until they wiped off their nest eggs. Their debt is zero, current assets are $80,000, investing $110,000 and $23,000 in savings - bringing their total net worth to $213,000.
Now, the couple are rethinking their own risk approach and working to restore the construction that has taken years to the point of rest.
Sethi says that while many people are obsessed with skipping coffee or looking for coupons to build wealth, real game changers involve bigger strategies.
"When people are asking $30,000, people focus on the $3 question," he said.
According to Sethi, these are the "$30,000 questions" of moving the needle:
Choose the right careR (know when to negotiate or switch jobs)
Decide whether to rent or buy,Where
Make smart, long-term investment choices
Plan major life goals Like retire early or conduct business
Sethi offers the couple some strategies to help them rebuild and move forward.
He recommends building a 12-month emergency fund and establishing some additional savings to provide financial security. By doing so, they will also avoid making impulsive decisions during times of market volatility.
Sethi recommends automatic investment to maintain a consistent investment strategy and reduce the need to make decisions amid the current craze.
Sluggish panic sales could lock in losses. It is crucial to stay informed and make decisions based on long-term goals rather than fear and emotions.
Finally, it is important to focus on major financial decisions. By prioritizing significant life choices with short-term market changes, you put your overall financial well-being at the forefront.
This article provides information only and should not be construed as advice. It is without any warranty of any kind.