The World IS NOT Ending
Capitulation. Giving up. Nihilistic beliefs. None of this is helpful. None of this is going to get you the life you want. None of this is even going to make your life better.
The worst part is it’s just plain wrong.
“But the state of the country!” mhmm.
“The US is on the decline!” ok.
“What good is a business if the US isn’t functioning!?!” yeeaahh…
If it actually gets that bad, what’s the other option? Give up and starve? IF it gets that bad, you can literally pick up your WiFi business and move to another country. That’s the point of WiFi money. It’s all done from your laptop. You don’t have to be in country.
You can serve clients remotely. You can sell product remotely. You can be in any country in the world and still host your website.
THIS IS LITERALLY THE POINT OF WIFI MONEY!
IF it doesn’t get *that* bad and you waste 2+ years in a nihilistic slumber, you’ve missed an enormous opportunity. Putting yourself years behind your peers that didn’t have an immature view of the world.
2001
It’s the middle of a giant bubble that saw the NASDAQ lose 78% of it’s value over 3 years. Companies that were promised to change the world are shutting down left and right.
Investors and founders of these tech companies that got rich almost overnight are filing for bankruptcy. Only half of the darling companies survive the bubble.
People that quit their job to become full time traders were ruined. The Venture Capital markets dried up.
And then.
As tens of thousands of people’s lives are ruined by irrational exuberance, thousands more die in a terrorist attack.
If you were your current age in 2001, how would you be feeling?
Looking back…this was the prime opportunity to start learning tech skills. As people thought the internet was overhyped, it was only getting started.
2008
As I sit on a college campus with my GF, I get the news from her that her family is losing their house. Her father was laid off from the plant he worked at. They were being foreclosed. Her and millions of others around the country are about to be homeless.
I start to see the world for what it is. I start paying attention. My morning routine now consists of turning on the news and absorbing all of the bad things that are happening around the world for the first time in my life.
What’s worse is I’m preparing for my first deployment to the middle east. What should I expect? Could I die? Everyone around me is preparing and treating this financial crisis like the world economy will be over. This could be the great depression on steroids. My family is treating me like there’s a chance I don’t come home.
Do I focus my mental energy on coursework, my deployment and whatever may come of that experience, or that when I come back home, I’ll be coming back home to 1933?
The deployment is mostly fine and I come back home. Deep depression sets in for a variety of reasons.
The world didn’t seem to be getting better.
If you were in my position, how would you be feeling?
I had all the naivety of a child or an idiot. I wasn’t a “cool guy”, didn’t understand markets, and didn’t understand history. Being stupid has a major cost.
Looking back…the stock market bottomed shortly after and experienced one of the best bull runs in history. Shortly after that, one of the best opportunities to get into real estate.
I wasted it. Wallowing in depression. For what?
2020
I’m on Twitter now and paying attention very closely. There seems to be a wave coming that many in the media don’t seem to be taking seriously. I see the stats. I see the speed of the spread.
I send my wife and kids to [redacted] to see here parents. Plan on them spending a month or two there. They’re old and given the stats on this thing, this may be the last time they see them. This also allows me unfettered time to focus. I focus on work, watching the markets, and running stats as new data comes out daily.
The difference between 2020 and the crisis’ before is I’m older and know the world isn’t going to end. I double down and plan. Twitter is a gold mine. The news from Twitter reaches me days/weeks before the general population catches on.
I avoid the shortages and so does my family. I’m watching the markets fall and continuously place buy orders. I don’t get rich from it, but I make more money than if I did nothing. The 20 y/o me would have wallowed in pity while I was forced to use taco bell napkins as TP.
A few months into all of this, I notice a shift in one of my employees. He’s 24, smart, but very inexperienced in many aspects of life. After the riots, he’s reached capitulation.
The gist of his feelings is that the world is ending. Even if it’s not, he’s at a loss of direction of “what to do with his life”.
Like many of you young and impressionable readers, he feels like this because he’s never experienced true crisis even from the outside. He doesn’t emotionally internalize that while the world may never go back to the way it was previously, it’s not over.
He didn’t experience the tech bubble, 9/11, 2008, the 99% movement, the Zika Virus, Ebola, war, experiencing generational poverty, seeing absolute poverty abroad, or countless other bad things in the world.
Because of this capitulation and self loathing, he not only misses the best buying opportunity for stocks of his lifetime, but the best time to start a WiFi business.
The world will go on but it will be different. It is your job to position yourself to come through the transition in the best situation possible.
While everyone wallows, you need to take advantage of the opportunity to accelerate your life.
2023
We’re in one of these situations again. The markets are crashing. Inflation is sky high. Russia/Ukraine, China/Taiwan, CBDC’s, the petrodollar, incoming food shortages, gas prices, chip shortages, credit markets locked up, etc.
So what are you going to do? Have a childish belief that the world will just disappear due to this chaos? Like you won’t be around in 3 years?
OR are you going to do something about it? Take advantage of the opportunity?
Benefits of Economic Downturn
Economic downturns benefit people that think long term and are on their way up. It hurts people that think short term, have no shot at making it, or have already made it. If you’re reading this, my thought is you’re likely in the first group. Or hope to be.
If you have this unrealistic belief that all markets just go up continuously, you’re just plain wrong. Markets are constrained. There’s an upper and lower bound. Depending on your economic viewpoint, they’re constrained by money supply, productivity, GDP, etc.
At the height of 2022, they were likely close to the upper bound of their constrained limit. Which means that if you bought and the market didn’t crash, there’s not a lot of room for your investments to go up during the next 3-5 years. If the market crashes, they’re closer to the lower bound. Meaning much more room to grow over the next 3-5 years.
Here’s some of the benefits of a downturn.
Shares are given at a lower stock price. If your long term incentive plan gives you $60k in shares vested over 3 years, you want those given during a downturn. Instead of those shares being worth $80k over 3 years, they could now be worth $120k-$150k
Money put in today buys more assets over the long term. Let’s say you were buying SPY in Dec 2021 for 460. For every $460 you put in, you bought 1 SPY, which is a fixed percent of the 500 largest companies. At today’s price of $366, you’re buying 1.257 shares of SPY. This is the same percent ownership of the companies as you would have gotten at $460. You’re buying more equity for less money.
Companies will go bust. This can benefit you in a myriad of ways.
Companies treat their customers worse as their resources are constrained. Allowing for new market entrants. (you)
Buying cheap assets from companies.
Valuations are lower. Want to buy a business or website? You can now get it for cheaper.
Ad costs go down. One of the first places CFOs pull back on during a recession is marketing spend. This leads to lower CPCs and allows smaller players to have a shot at ramping and optimizing their customer acquisition.
Companies get desperate for revenue and start running more promotions. I know of some companies that will be running steep discounts in the near future. This will be really dependent on the supply chain but expect retailers that are doing bad to run deep discounts. This will help you offset some of the inflationary pressures.
Actions You Should Take
So here’s the meat of it. The world is not ending and you should get to work making your life better. Set yourself up for success instead of being that guy a few years later talking about “if I would have just done this I would have been a millionaire”.
Cool story bro. But did you do that thing?
Become un-fireable. It may be too late for some of you, but you should position yourself so that you can withstand the coming layoffs. This is your #1 priority to ensure you skate through this and flourish on the other side.
First, make sure you are playing the political game and the right people like you at your company.
If you’re just an unlikeable person, if there is only one person that can do a task for the company, make sure you’re that person. Build a moat around you so you’re less likely to be let go.
Make sure whoever has the decision to lay you off knows what you’re working on and the value it provides. If that decision maker thinks you’re a cog in the wheel or your boss takes all of the credit for your work… Well, the less cogs the better. Make sure they know you’re bringing in revenue or saving costs. Hopefully that number is way higher than your salary.
Reduce living expenses. You need to do this for two reasons.
Inflation is running rampant. You need to ensure you don’t end up in a debt trap.
You need to have enough money to invest in being able to make more money
Stock up on things that you will need in the future. Inflation isn’t stopping any time soon. Anything that you purchase now but use a year later will make you an X% return. Where X is the inflation rate of the item next year.
Stop doing shit that doesn't make you money. You’re not going to have time to do the real work that it takes if all of your time is spent on distractions. Cut out the dead wood to free up time to…
No I’m not going to X birthday party, holiday party, barbecue, drinks, baseball game, get together, etc. No No No Best to keep a small IRL circleNormalize saying no to normy social commitments. You’re never going to have time to work on yourself or your side business if you can’t say no.
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Invest all money back into your business. This is going to be your greatest return. Not stocks. Not crypto. Business.
Invest *excess* money back into markets. Excess money. When you can’t invest another dollar into your business with a decent return and you have leftover cashflow. I don’t know your financial position so I don’t know what markets you should invest in. My guess is that you should probably just buy the SPY and don’t be a stock picker/trader.
If you act, plan, and work like a mature responsible adult, it’ll all be fine. You may think the world is burning. But remember, forest fires clear the dead wood allowing new trees the opportunity to grow.
If you’re subscribed to this newsletter, you need to keep in mind why we’re here.
Your boss and company, no matter how nice, doesn’t care about your future. Nobody outside of a few family members and select friends care about your growth and your future.
You are the only one that can save yourself and make your life what you want it.
Single player. Just you.
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Disclaimer: Nothing written here should be construed as legal for financial advice of any kind. These are opinions and observations, written by an anonymous cartoon Opossum, built up over years working in e-commerce & affiliate marketing.
Would buying something like VTI be similar to buying SPY? Great article
Opossum, you win, I'll buy you 2 coffes per month.
Made my day with this post.