DEVELOPING THE INVESTOR MINDSET

[Doolan Wesley]

When in my senior year of high school I started developing an interest in the stock market and investing. As I was a kid and didn't have much money to start a portfolio myself, I would just follow some companies that I was familiar with. PepsiCo (PEP) was one of my favorites. It wasn't until I was in college that I said, I am going to begin actively investing. I opened a portfolio with ETrade, put $2000 of my hard earned dollars in there and completely whiffed, losing 80% of my initial investment in just months. The loss was unfortunate, but at just 17 years old I recovered and learned in the process.

 As a means to making additional income, I started writing for SeekingAlpha.com. I honestly didn't know much about investing. I was 17 years old, I had a small stock portfolio, but I was always interested in money and passive income. Maybe it was beginners luck, but I made some great investments after I started doing further research on the companies. I invested in stocks such as Facebook (FB), Starbucks (SBUX), Visa (V), Trex (TREX), PepsiCo (PEP), etc.

As I saw my portfolio grow to to $20k...$30k...$40k...$50k...all the way to $80k fresh out college, I began getting more and more aggressive. We all know how this story ends. I begun actively trading too much, trading on margin, using high risk options strategies until I blew up my account. As hard as the losses were to stomach I gained super valuable knowledge along the way. I knew that investing would always play an important part in my life, but I had to learn to control risk.

A friend and myself came up with a list of criteria that we found most important in stocks. Strong free cash flow, strong margins, high ROIC, and most importantly being in the right industry. We applied metrics to our own investing and have had a great run of success, seeking out some extremely strong businesses. I've also used the knowledge that I gained and applied it to my own real estate investing success. I'm just beginning to acquire properties, but my first property was really a homerun in my opinion and it just came with patience.

I don't know if Bigger Pockets has any additional stock investing forums. In 2017 we created a portfolio of about 25 holdings and started writing about our portfolio. In the process we've met investors from many different states and countries, it's been a great experience.

If any of you have any newsletters or investment techniques that you use, please share them below. I guess the premise of this conversation is that there are a million ways to generate passive income and that equities and real estate should both be utilized. If you can come up with a methodical investment strategy, you're probably on the right track, if you're a gun slinger looking to make a quick buck. BEWARE.