5 Excuses For Why You're Not Investing | Phil Town

TL;DR

You can move past common investing excuses by clearing high-interest debt, opening an online brokerage account, and building a watch list of strong companies to buy when they are discounted. Phil Town argues that fear of losses, market crashes, limited time, and discomfort with numbers need not prevent someone from investing. Read on for his concrete 3-step starting plan and approach to buying patiently.

Transcript

are you guys I'm Phil town from rule 1 investing today I'm gonna discuss how often I hear the phrase I'd love to be an investor but and the common excuses and the fears that follow that statement investing in great companies is the best way to grow your wealth no question about it it's the best way to become financially free it's the best way to en... Read More

Key Insights

• 😨 Overcoming financial fears is crucial to becoming a successful investor.
• 🌱 Following a simple 3-step plan can help anyone start investing.
• 📱 Stock market crashes are opportunities for smart investors to buy discounted stocks.
• 💦 Investing doesn't require a lot of time; it's about working smarter, not longer.
• 👋 Being good with numbers is not a prerequisite for investing; calculators and the internet handle most of the math.
• 😨 Trusting a solid strategy and taking action is the best way to banish investing fears.
• 💦 The time-tested ways to succeed in the market have worked for investors like Warren Buffett for decades.

Questions & Answers

Q: How can I start investing if I do not know where to begin?

Phil Town recommends a 3-step plan: eliminate high-interest debt, open an online brokerage account, and create a watch list of great companies. He says to focus on understandable businesses that are likely to remain operating ten years from now, then wait until their shares go on sale.

Q: Should I pay off debt before investing?

Town says to eliminate high-interest debt first. He uses an 18% credit-card debt as an example and describes paying it off as a phenomenal rate of return.

Q: Can I open a brokerage account without money to invest?

Yes, according to Town, you can open an online brokerage account with zero money and establish a paper-trading account. He also gives $2,000 as an example of an amount someone might deposit when opening an account.

Q: What companies should go on an investing watch list?

Town suggests companies whose businesses you understand, such as those selling products you use or operating in an industry familiar to you. He says they should be solid businesses likely to exist ten years from now, run by honest people, and aligned with values you feel good about.

Q: How does Phil Town suggest reducing the risk of losing money?

He recommends buying wonderful companies at discounted prices and holding them through temporary price swings. His approach follows Warren Buffett’s two rules: do not lose money, and do not forget the first rule.

Q: How can investors take advantage of a stock market crash?

Town views a crash as an opportunity to consult a prepared watch list and buy strong companies at large discounts. He says that buying a company for half of what it is worth and seeing it recover would double the invested money; if that occurred over three years, he calculates the return as 26% per year.

Q: Why does patience matter in long-term investing?

Town says investors can get into trouble when fear makes them sell after a temporary price decline. He advises holding a great company bought on sale and waiting for its long-term value to be reflected, citing Charlie Munger’s point that money is made while waiting.

Q: Do investing and company tracking require a lot of time or advanced math skills?

The existing guidance says the Rule One strategy requires about 15 minutes per week to manage investments and track selected companies. It also says investors do not need to be naturally good with numbers because calculators and the internet can handle most of the math.

Summary & Key Takeaways

• Many people are held back from investing due to financial fears, but those fears are only illusions.

• The first step to start investing is to get out of high-interest rate debt, open an online brokerage account, and create a watch list of great companies.

• Stock market crashes provide an excellent opportunity for investors to buy quality companies at discounted prices and ultimately make a profit.