How did you lose your wealth?

My uncle (the brother of my father) never got married. He was born in 1950 and always lived the good life: he never had kids, not one Euro of debt, drove fast German cars, had amazing girlfriends (women literally adore him), made exotic travels, had tailor-made suits, knew literally most of the Bel Paese best restaurants in big and small cities alike, etc.

He started working in the Italian branch of a British company (at the time based in Naples) at 21 as a clerk and became a top manager in his late 40s. He was suddenly fired in the late 90s because of a restructuring and since he was already in his late 40s it was impossible for him to find a similar job at a competitor. Actually he could not find any job at all. Once out of the job market for a few years he basically gave up on looking for even a low-level job. Continue reading “How did you lose your wealth?”

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Has anyone surprised you after their death, e.g. receiving an organ from a donor, a sizeable inheritance, or a visit from a friendly ghost?

This did not happen to me but to a good friend of mine.

She had a boyfriend a bit older than her and they were a great couple. She was a medical student in her mid twenties and had a troubled past. He was a lawyer in his mid forties and was already divorced once. Once they became a couple he quickly turned her life upside down: she was naturally an introvert while he was the star of every party, a fantastic storyteller. He subtly and gradually pushed her out of her shyness egg to try to experience new things together. He taught her to drive and when she finally got a driving license, he bought her a small second-hand Fiat 500. He taught her new recipes to cook and they traveled a lot together across Europe.

They had been together for a bit more than one year when suddenly one day he died of heart attack. Apparently he had an undiagnosed problem with his heart and died in his sleep.

Her life was authentically destroyed. She had been grieving for months until one day she was driving the car and in a split-second of absent mind she crashed into the car in front of her. Luckily she was not injured and the damage to the cars was not really big: she stopped the car on the side of the road in order to fill the joint accident statement.

She struggled to stay calm then opened the passenger seat compartment where she found the car’s hand-book with the form to fill.

Once she opened the hand-book she unexpectedly found a hand-written message from her boyfriend saying something like this:

Darling don’t worry! If you are reading this it means that you are not badly injured. That’s great! Don’t worry if it was your fault: these things happen! Don’t worry if the car is destroyed: we will buy a new one as this is actually quite old already. Now go ahead and fill this form: write slowly and double-check what you write, even if you are a bit in shock. Also double-check what the other driver writes so that you both agree on how the accident happened. Don’t worry about anythingelse: I’ll wait for you at home. I love you.

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What are the top bad habits that should stop immediately?

My advice is to stop the following bad habits:

  1. Stop keeping cash in your bank account: save money and, after you have set up a good emergency fund in cash, invest everything else in one or more low-commission, index-tracking, ETF funds, as soon as possible. The “VOO” (Vanguard 500 ETF) and “VIG” (Vanguard Dividend Appreciation ETF) are two good starting points. This must be a priority. Because compound interest takes time to produce its amazing results, the earlier you start, the better. (Since many asked in the comments, I also recommend to Google: compound interest + dollar cost averaging. In short: if you will be constant with this two-pronged strategy, you will do better than 90% of the fund managers worldwide.)
  2. Stop smoking, doing drugs, drinking alcohol: they do not add anything to your life, and only subtract cash from your bank account (that you should rather invest in ETFs).
  3. Stop watching TV: same as alcohol, TV does not add anything to your life. By not watching TV, you can spend more time reading interesting non-fiction books to educate yourself about the most different topics. Knowledge has a powerful compound effect: as you progress putting different knowledge eggs into your basket, your analytical firepower will gradually increase and the benefit that you will derive will be exponential. TV does not add anything to your knowledge basket. Sell it, and invest the money (either by buying ETFs or by buying many interesting books) instead.
  4. Stop eating outside: learn to cook your own meals.
  5. Reduce Social Media: remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%).
  6. Stop sitting on the couch playing PS4: it’s probably as bad as Facebook. Every time you want to play a game, go for a run outside instead.
  7. Stop surrounding yourself with all these fake friends you don’t care about: they don’t care about you either and they will dump you at the first time you will be in need. It is better for you to be prepared not to count on them (or on anyone, actually). Text/call/see your parents/grandparents more, instead.
  8. Stop shopping to impress or please other people. It doesn’t work. They will still hate you even if you have a new car or some ridiculous Gucci shoes. The rare, true friends will like you and be at your side regardless of what you own. Once you will start doing this you will learn that you are not what you own. Acquiring this mindset will free you from a thousand mental layers that cloud many of our life choices. It feels amazing.
  9. Stop accepting wrong things in the status quo: you can change things for the better. It just needs a brain and hard work.
  10. Stop being a cheapskate: show the fewpeople that matter to you how much you care about them. Bring flowers to your girl/wife/mum/grandma. Make a nice wedding gift to your best friend. Offer discreetly to pay a dinner out if your friend cannot afford. Be a gentleman for all people you interact with. Write a thank you card to a colleague who was helpful in a difficult situation. Be grateful, very grateful, for these good people that touch your life kindly. Do not be afraid to spend money for those who are important for you and deserve your attention, kindness and generosity. The sky will not fall if you spend money and give them your attention and, most importantly, they deserve it. I have seen countless of truly good persons being hurt, friendships broken-up in horrible ways, just because of people being outright stingy. Also, remember to give a part of your profits to a charity that is important for you: the good these people do to this world is invaluable.
  11. Stop not taking (calculated) risks: career-wise,with time we all get lazy and tend to accept the current status quo: our job, our boss, our colleagues, our commuting, etc. This translates into fantastic opportunities being lost because we are too scared to abandon what we consider our current safe harbour (which most of the times is not much more than a steady salary). If you hate your job, if every Monday morning feels sour, if at work you are not respected for who you are, if your boss does not appreciate your efforts, if you are not paid enough, if your last salary increase was ridiculous: these are all signs that should push you to reconsider your career choices and check if anything better is available on the market. Nothing out there? Not all hope is lost: keep in mind that there has never been a better time in the history of civilization to be your own boss and start your own business.
  12. Stop taking new debt. Ditch your credit cards. Pay all the new stuff you want to buy upfront. No exceptions. If you cannot afford something upfront, simply do not buy it (most likely you will not need it anyway). Same for the mortgage: rent / share a cheap place and invest your savings in stocks instead.

Edit: I revised point 5 in order to also include Instagram, Twitter, Pinterest.

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Are you bullish or bearish on Bitcoin?

Look: I will cut the story ultra-short (oversimplifying for the sake of brevity).

  1. Scarcity: there can only be 21 million Bitcoin ever to be mined.
  2. Security:So far the Bitcoin protocol has been proven unbreakable in its aim at preventing double-spending: the cryptography behind it has been 100% bulletproof.
  3. Decentralization: Nobody can sue Bitcoin as there is no Bitcoin Corporation: it is fully decentralized and the Bitcoin protocol will be alive as long as there will be an internet connection and some miners keeping the network alive.
  4. Network effect:Nobody knows for sure what will happen in the future but almost everybody is coming to terms with the fact that Bitcoin is becoming the decentralized, digital version of gold (a store of value accepted from the US to Saudi Arabia, from Moscow to Paris, in Africa as well as in India). No other digital currency has been able to match Bitcoin’s network effect. It is an amazing technological advancement, a generational shift.

If you are able to invest your money during the dips and ably buy at least 1 Bitcoin while everybody else panics, you will certainlybe among the top 21m Bitcoin holders on the planet. This means that you will be in the top 21m holders — on the planet — of next generation’s gold. Even if you are able to buy only 0.1 Bitcoin, you will still be among the top 210m holders on the planet (and there are 7bn people around!). Already an amazing achievement.

People still have not realized how rare Bitcoins are if you think in planetary terms and the fantastic potential of the technology, its decentralisation and its monstrous network effect.

Obviously there are risks but this is an asymmetrical bet, with known, limited losses if the project somehow fails and unlimited potential if it succeeds.

Short term price fluctuations should not distract anybody: there are very few opportunities like it in the market today and if you “get it”, investing in it is a no-brainer.

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Why does the Serie A have such low attendance numbers, especially for big teams like Milan, Roma, Inter (not including derbies)?

For a series of reasons:

A. Poor infrastructure quality: the vast majority of the stadiums in Italy are owned by the municipalities. Italian municipalities are highly corrupted entities / do not directly benefit from increased attendances to the stadium (i.e. they get a fixed licensing fee from the Teams, regardless of attendances): for these reasons the stadiums have not been either maintained or renovated in decades and, as we all know, people in 2015 do not accept to go to the same stadium that was considered “state of the art” in 1989 and has been left untouched and decaying since then. The problem is exacerbated by the fact that Municipalities gain money by allowing the teams to play onlyin the Municipality’s stadiums (through a sort of licensing fee which is negotiated on a yearly basis): for this reason, not only they leave their own stadiums to decay, but they also have no interest to allow the Teams to build their own stadiums as the Municipalities would lose an important revenue stream for their finances (e.g. just look at the Naples Municipality and its now-in-ruins San Paolo Stadium: the Mayor of Naples refuses to either renovate it (blaming the lack of budget) or to authorise the Team to build its own infrastructure, otherwise they will lose the licensing fee: this is a disaster for such an ambitious and successful team). Please note that most of the stadiums in Italy have been built/re-built in the late 80s for the Italy 1990 World Championship. These stadiums are architecturally terrible, built at the end of the disastrously corrupted 80s, and they try to do too many things at once without doing anything right. They are also enormous (many of them can seat more than 80k supporters), the supporters are very far from the pitch so the players look very tiny, there are not even comfortable seats. On the opposite, the 40k seats Juventus Stadium in Turin has been completed 3 years ago, it is considered “state of the art” by 2015 standards and is consistently sold-out (even notwithstanding its higher-than-average prices).

B. Bad connections from city centers: the public transports in Italy are pathetic: in order to reach most of the stadiums in Italy you need to take a car or a scooter. This makes things bad on the way tothe stadium but things are utterly deadly on your way backhome at the end of the match. The roads around the stadiums connecting it to the city centers are simply unsuitable for thousands and thousands of cars flooding back to the city so you can easily remain stuck at the stadium for more than 1 or 2 hours after the game has ended. This is unacceptable for modern standards but the Municipalities have simply no interest in fixing this.

C. Violence by Organised Supporter Groups: in Italy (from North to South, East to West) it is still completely normal for a (small but influential) fringe of supporters to go the stadium not to watch a football game but to have an excuse to make riots, destroy everything and beat (sometimes even kill!) the opponents’ supporters. Roma, Genoa, Verona & Lazio supporters are among the most violent organised groups in Italy, and they can take whole neighbourhoods hostage of their riots for a full day: this obviously drives rational and normal supporters (often with kids) out of the habit to go to the stadium.

D. Lower quality of games: many of Serie A’s matches are consistently boring as the star players are going to play in richer championships (but things are improving, especially since 2015).

E. Overwhelming football offer on TV: compared to all the difficulties raised against the legitimate supporters to go to the Stadium, the offer of Football on TV is outstanding. There is simply not incentive to go to an empty stadium, if I can watch the same game from the comfort of my sofa at home.

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