Do this to NEVER lose your hard-earned money.

#Episode 1 - Money Playbook - A 'Reflection Shorts' Series by Gourav Khanijoe

More than a 1/3rd of the stock market’s value was wiped out in October 1929, whose days were later named Black Monday, Black Tuesday, and Black Thursday. 💩

Reports of Wall Street speculators committing suicide were spreading across NYC.🤐

Wall Street rush after the Stock Market Crashed in Oct 1929, many speculated about traders jumping out of their windows. Credits: www.history.com

Abraham Germansky, a multimillionaire real estate developer and trader, lost everything. His wife reported him missing.🪦

Meanwhile, Jesse Livermore, another millionaire at the time, made $3 billion in one day because he bet stocks would decline.

“You mean we are not ruined?” - his wife asked. 🫣

“No Darling, I have just had my best-ever trading day”. - Jesse said. 🎉

4 years later. Jesse was full of confidence after his 1929 blowout, made larger bets backed by increased debts, and ultimately lost everything in the stock market. ❌

His wife reported him "missing," and later they found that he took his own life. 🪦

Common trait? Both Jesse and Abraham excelled at accumulating wealth but struggled to maintain it.

Making wealth is one thing.

Keeping it is another. 🫨

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Gentle Reminder: There is NO financial advice offered here. Gourav is neither a financial expert nor an advisor or promotor of anything. He’s sharing his own learnings and experiences.

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What does it mean for Techies?

Fast forward almost a decade. Today’s Big Tech Software Techies are one of the most elite groups, earning millions of dollars in a relatively short period. 🚀

That’s why they must manage their wealth rightly. They must learn to keep and grow their monies. We must not let emotions and greed destroy it. 😈

Personal Example: I learned this lesson the hard way. When the crypto market was going down in 2023-23, and my Coinbase shares were tanking 📉, I sold a whole lot of my old RSUs at a very shitty price thinking it may become a penny stock. No one can time the market, but it was a fearful sell that has cost me $1 million at today’s price. 🔪

Skill to learn: 👉 Be both optimistic and paranoid about money. The hardest skill to master is staying consistent and thriving on steady growth, as wealth-building is more about managing emotions than analyzing charts and patterns. 📈

Do this:

1. ✅ Be paranoid in financial planning: “You plan for good, God laughs..” - Plan for the worst. A great financial plan can only work if it can survive the worst reality. Save for 12 months of expenses and put it in High Yield Saving Accounts.

2. ✅ Control Emotions: “Buy low, sell high” - Tough thing to do despite being so intuitive. We should not sell when the market is going down, but we often also don’t sell when the market is going crazy high, thinking

   1. We’d lose the opportunity of “more growth”.

   2. We don't know what to do with the cash after selling.

   3. But remember this: if that cash helps you avoid selling during a crash, you'll save much more.

3. ✅ Be Optimistic: Don’t panic by downturns. Embrace them. Use Dollar Cost Averaging during downturns. Sticking around during hard times and giving time for compounding to work is the key.

That’s it for today 🙏. If you are wondering “What’s a Reflection Short?” Read here.

References

• The Psychology of Money: Timeless lessons on wealth, greed, and happiness

• The Total Money Makeover Updated and Expanded: A Proven Plan for Financial Peace

• The Intelligent Investor

Interesting Reads

• My Investment Rebalancing Process by

  Andre Nader

• Break Society's Money Rules If You Want to Be a Quiet Millionaire by

  Tim Denning

Let’s Connect 🤝

👋 Hey there, I am Gourav. I write about Engineering, Productivity, Thought Leadership, and the Mysteries of the mind!

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