Real-Estate & Stock/ Forex Trading: How and why they mesh well.

[Joseph Medina]

Hello All, 

If you click on my profile you will see I use the Stock Market to raise funds for my REI. I want to share some insight on trading your way to success.

I cut my teeth on FOREX trading and moved to Stock Investing much later. Trading is seeing a massive boost lately because its very appealing to the younger crowd like my-self. I have always been fascinated with "Charts", and I just love looking at them and analyzing them. Trading is very rewarding and very dangerous. The barrier for entry is super low, and the risk is as high as one could get. 

I started off my trading carrier with 100 dollars in a FOREX trading account and turned it into a 15,000$ account in a matter of days. I thought I was a trading genius (like most rookie traders) and on one fateful afternoon I entered a "Buy" on the pair USD/CHF. (US Dollar/ Swiss Franc) some volatile news came out and I got margin called. My trading terminal flashed red and my 15,000 dollar profit dwindled to a mere 100$ in a matter of 5- 10 minutes. My terrible trading habits caught up with me, like the practice of over leveraging my money, not using "Stop-losses", being cocky and the lot. 

Did that stop me? No! 10K dollars in trading education and 7 years later I arrived at a place where I am comfortable. Trading education is very unlike Bigger Pockets. Trading education is super expensive, because everyone wants a quick dollar. Very rarely does an educator talk about the Psychology of trading. Clicking the Submit button is super easy, but withstanding the ups and downs of Price Action will shake even the most experienced non-trading professional. 

I am doing a trial with my self, and I have decided to mirror what i did regarding learning how to trade with real estate investing by taking a full year of learning and what I have grown in that year will be my down payment on my first REI property.

In the BP podcasts its very rarely discussed, but I want somewhat of a velocity of money now while I am learning. I want that money moving always, and I do not ever want my dollars sitting still. As of 29-Jul-2021 the inflation rate sits at 5.5 or 5.6%, and the problem of this is illustrated by asking yourself "How much gas can I get today compared to this past March?" Robert Kiyosaki illustrates it best when he said "currency is derived from current, as in moving water. When the water sits still it becomes non-potable very quickly, but if it has a strong current it is safe to drink, because there is no germ that can grow without sitting still" 

When your money sits still in a savings account it weathers in the storm of inflation. Its value becomes less and less. Sitting your money in a brokerage account and trading is risky, but when one does this they at least open up the possibility of a potential gain. When one keeps their money in a savings account they are ensuring a loss at a rate of at least 5% a year. Talking to all the W-2s out there: I'm not saying empty out your savings and go on a stock market shopping spree, but take some time to learn about business investing and buy good quality stocks until you're ready to buy your first or next property. You don't need a stock broker to do this, because there are no classes in any university (to my knowledge) that teaches stock trading. Warren Buffet says it best "Wall Street is the only place where someone rides to in a Rolls Royce to get advice from someone who rides the subway"  

Once you have grown the amount to an amount that suits you pull it out and dump it on a down payment of a property of your choice, and continue to let inflation benefit you. Think of your brokerage account and equity in your properties' equity as a savings account instead of a dumpy bank account. If you need cash take out a HELOC/ HEIL or liquidate your positions cash out.

"what if the market crashes?"  It will, and so what? you only record a loss if you sell out of your position. Trading stocks is not like FOREX where the trend can last for months or years and if you're on the opposite side of it you're going bankrupt. 

The US is the Financial Capitol of the world. There is only one other (and only one other) market in the world that can support the weight of the world's economy and that is the UK. Many ask about the Euro and I say it depends on how optimistic you feel about Germany supporting the World Economy as they are by far the "Bank" that backs the euro with other countries in the EU somewhat supporting it with others draining it. 

The US holds something like 52% of the Worlds GDP, and if we fall the World Economy falls, so the Market might dip AKA "Crash" but the US will not allow the Stock Market reach zero. we cant afford that and the world cant afford that. 

Brandon Turner says it all the time "the real estate market might dip or soften but overall I truly believe real-estate will continue to appreciate" this is the exact same concept except on a lager scale. 

Yes the velocity of money slows down as your dollars sit in a property, but its growing as the government keeps printing more dollars for stimulus. 

Bottom line is keep that dollar moving. Trade it, slave it, but what ever you do just don't save it!