How can I improve myself in 6 months?

Self-improvement is a marathon which involves following a path different for each of us and my advice is as follows:

  1. Stop keeping cash in your bank account: start saving 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 Vanguard 500 ETF is a good starting point (also Vanguard’s VIG is very good). This must be a priority. Because compound interest takes time (like a decade or more) to produce its amazing results, the younger you start, the better. (Since many asked in the comments, I also recommend to Google: compound interest+ dollar cost averaging in order to understand the benefits of this double-pronged strategy). In this way, money in your bank account will grow steadily during the years and give you an invaluable peace of mind in case of emergencies and allowing you to take new opportunities down the road. Continue reading “How can I improve myself in 6 months?”
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Where and how do you invest your monthly salary?

This is how I have been doing since 2008 and how I highly recommend you to do.

  1. Open a Stock Account with your bank and every month save 20%/30%/40%/50% of your net income and invest it in a low commission S&P500 ETF by Vanguard (like “VOO” or “VIG”: google them).
  2. Google: “dollar cost average” + “compound interest” in order to understand the benefits of this double-pronged strategy (in short: you will beat 90% of all the professional Fund Managers out there). Continue reading “Where and how do you invest your monthly salary?”
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What is the best way to build resilience?

Start achieving results: from the smallest task during your daily life to gradually the bigger goals you set up for your journey.

As soon as you will achieve (small and big) results against the adversities (downfalls, lack of motivation, adversarial circumstances, lack of support, etc.) you will grow more confident of your incredible strength and ability to pass above those obstacles. Continue reading “What is the best way to build resilience?”

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Why are some wealthy people so frugal?

Being frugal is awesome.

Learning to love being frugal has been a life changing experience for me for the following reasons:

  1. You must realize that you do not need 90% of the stuff on sale out there: the vast majority of the stuff advertised in front of our eyeballs 24/7 is completely not necessary. Except for extremely rare exceptions related to our basic needs, buying stuffy only adds complications to our lives and worries to our brains, while reducing our savings in the banks. This has nothing to do with being frugal, but rather with being merely rational. If you do not need something, you must not buy it, regardless how frequently you are bombarded by ads, recommendations, etc. Continue reading “Why are some wealthy people so frugal?”
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The Premier League has the “top six” where matches between them are always engaging. Is there an equivalent top six clubs in La Liga, Bundesliga and Serie A, or is the competition in these leagues dominated by fewer clubs?

In the 2000s in Italy’s Serie A, we had the 7 sisters (Juventus, AcMilan, Inter Milan, Lazio, Roma, Parma and Fiorentina).

In those golden years, the Serie A was undisputedly the best league in Europe as well as the most difficult and engaging: the best players from all over the planet went to play there.

These were the years of astronomical investments made by Italian tycoons who purposely decided to gain exposure on the Italian scene by pouring a lot of money in their teams in order to buy the best players available on the market. Continue reading “The Premier League has the “top six” where matches between them are always engaging. Is there an equivalent top six clubs in La Liga, Bundesliga and Serie A, or is the competition in these leagues dominated by fewer clubs?”

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How do you continue living after very bad financial decisions?

Start saving with no mercy.

We all do mistakes and we all take bad financial decisions sooner or later in life.

Personally, after a big financial mistake, I normally enter into an extreme saving mode.

In this way I am able to:

  1. Regain focus on what really counts in my life;
  2. Appreciate how little I need to live a joyful life;
  3. Accumulate quickly a not irrelevant sum to make up for my mistake;
  4. Appreciate that my values are stronger than a financial loss: I do not let this loss destroy my mood for a long period of time.
  5. Understand from my mistakes so that I do not make them anymore in the future.

I know first hand that a bad financial mistake is painful, but I hope that with focus, patience and perseverance you will regain what you have lost and never lose confidence in yourself.

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What are the top bad habits to stop immediately or I’ll regret big time later in life?

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 Vanguard 500 ETFis a good starting point. This must be a priority. Because compound interest takes time (like a decade or more) to produce its amazing results, the younger you start, the better. (Since many asked in the comments, I also recommend to Google: compound interest+ dollar cost averaging in order to understand the benefits of this double-pronged strategy).
  2. Stop smoking, doing drugs, drinking alcohol: these things 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. Cooking at home will naturally push you to learn new recipes from different countries: many of these new recipes that I learnt turned out to be new “classics” at home. Delicious!
  5. Stop Facebook: it’s even worse than TV. You lose your precious time while Zuckerberg & Thiel make millions out of your eyeballs glued to some cat videos, fake news & holiday pics. It makes no sense. The first step should be to delete the Facebook app from your iPhone (do not close the account, just delete the app): in this way you will not receive a million of useless notifications every day and you will very easily reduce the wasted time by 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. Ditch your accountant: learn how to do your own taxes, instead. This will save you a lot of money and will give you insight on the mechanics of the tax system (which is unexpectedly very useful in many fields of life & business). Once you have learnt to do your own taxes you can hire your accountant again and you will then be able to give him guidance, check for potential mistakes, take informed decisions so to minimize your tax burden.
  9. 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. We do not need99% of the stuff for sale out there anyway. Acquiring this mindset will free you from a thousand mental layers that cloud many of our life choices. It feels amazing.
  10. Stop accepting wrong things in the status quo: you can change things for the better. It just needs a brain and hard work.
  11. 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 (I still remember the “thank you” card that one of my first bosses left to me — a young and inexperienced trainee at the time — 19 years ago just saying: “You are a star!”) . 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.
  12. 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.
  13. 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” (from the French “death pledge”): rent / share a cheap place and invest your savings in stocks instead. If you already took debt, repay it as soon as possible: sell stuff & work double shifts if necessary.
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I think I am smarter than everyone around me, why? Am I smart or am I an idiot? Is it because I underestimate people?

Oh, welcome to the club!

I don’t know who you are but given the details added to the question, I would recommend you to check this quick Wikipedia entry:

Dunning–Kruger effect – Wikipedia

In short:

“The Dunning–Kruger effectis a cognitive bias in which low-ability individuals suffer from illusory superiority, mistakenly assessing their ability as much higher than it really is. Dunning and Kruger attributed this bias to a metacognitive incapacity, on the part of those with low ability, to recognize their ineptitude and evaluate their competence accurately. Their research also suggests corollaries: high-ability individuals may underestimate their relative competence and may erroneously assume that tasks which are easy for them are also easy for others.”

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What is the single best financial move you have ever made in your life?

My single best financial move was when in 2008 (just before the Financial Crisis) I decided to invest every month a certain amount of my salary in a moderately risky ETF like Vanguard’s VOO or VIG: I did this no matter what and never touched this investment for a decade.

I also increased the monthly investment as soon as my career progressed so not to fall into the increased lifestyle trap like I observed my peers were doing.

This is admittedly a “boring” strategy than anybody can follow and does not require you to learn exotic options or get any insider information.

After I started a decade ago, also my mum, my little sister, my girlfriend, my old uncle and a few of my friends (all of them completely alien to any financial knowledge or investment experience) also took this (long-term) approach with excellent returns.

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What tiny daily habit could be life changing?

My advice is to integrate the following habits in your daily routine :

  1. Sleep 8 hours a day, consistently.
  2. Save money: 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 Vanguard 500 ETF is a good starting point. This must be a priority. Because compound interest takes time to produce its amazing results, the younger you start, the better. (I also recommend to Google: compound interest + dollar cost averaging).
  3. Stop eating outside: learn to cook your own meals and eat at home most of the times. Cooking at home will naturally push you to learn new recipes from different countries: many of these new recipes that I learnt turned out to be new “classics” at home. Delicious!
  4. 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%).
  5. Stop shopping to impress or please other people. It doesn’t work.
  6. Stop being a cheapskate: show the few people 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.
  7. Learn how to take (calculated) risks: 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 habit). Learn to try new things. Acquire the mindset to re-evalute your past decisions. Try new way to do the same old thing. You will be surprised by the discoveries you will make.
  8. 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).
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What are some habits that improved your life significantly?

These are the top habits that substantially increased the quality of my life:

  1. Sleeping 8 hours a day, consistently.
  2. Saving money: I started saving money and, after I set up a good emergency fund in cash, I started investing everything else in a basket of low-commission, index-tracking, ETF funds. The Vanguard 500 ETF is a good starting point. Having money invested and working for me not only had a positive impact on my finances but also on my sleep (see point 1).
  3. Surrounding myself with people with positive attitude: I ditched fake friends, high maintenance girlfriends, and all other people that actively undermined and ridiculed my efforts. I noticed that a positive attitude from the people around me is essential for my quality of life.
  4. Stopped shoppingto impress other people (or please them): I noticed this doesn’t work. People are not impressed by your new car or fancy shoes. These fancy things will most probably only trigger envy or other undesirable attitudes towards you. Better avoid the problem altogether and save money instead.
  5. Stopped watching TV: I sold my TV in 2001 and never bought it ever since. Watching TV now seems ridiculous given the low quality of the programs, amount of advertising and divisive content promoted 24/7 on most channels.
  6. Getting an above-average health insurance: accidents happen all the time (more on this on point 11 below) and it is better to be prepared. Having a good health-insurance (ie. not the cheapest you could find) also helps sleeping better at night even if you are perfectly healthy (see point 1 above).
  7. Learning to cook my own meals. Cooking at home is cheaper and, over time, it will also naturally push you to learn new recipes from different countries (a minimum of curiosity and will to learn is necessary): many of these new recipes that I learnt turned out to be new “classics” at home.
  8. Learned to do my own taxes. I noticed my accountant was very liberal with the amount of taxes I had to pay (with my money, not his) so I learnt how to do my own taxes. This allowed me to find costly mistakes in my accountant’s work and find a better one at a later stage.
  9. Reducing social media. Removed the Facebook, Instagram, Twitter, Pinterest apps from my iPhone: now I can only access them via my desktop computer or iPad (and automatically reduced my time wasted on Social Media by at least 90%). I notice that the best part is not to have useless, constant notifications on my iPhone (ie. there is a reason why Facebook actually tries to force you to install the App and not use the Safari version of the website). Now I check Facebook/Twitter once a day and I find this more than enough to keep up with the developments in my social circles (ie. mostly cat pictures, memes, pictures of kids, etc.).
  10. Started reading as many books as possible. I try to read 1 new book a week. I rarely make it, but given that I set up such a high target, in 2017 alone I managed to read 20+ non-fiction books on the most diverse topics, which is already a great improvement from the past.
  11. Started weight-lifting at the gym. I previously was an active runner. In 2016 I got a serious injury to my knee (torn my left ACL in a ski accident) and had to undergo reconstructive surgery and subsequent 9 month rehabilitation program. This forced me for the first time to train to increase my muscles in other to avoid post-surgery muscle atrophy, and power imbalance between the two legs which would have prevented me to ski again. I hated every single weightlifting session but the improvement in my muscular power, good posture, fat reduction is on another level compared to what I achieved with my moderate running routine.
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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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I want to quit my job and start my own business. Where should I start?

First: do not quit your job (yet). A steady income will not only give you money to pay bills and buy rice & beans, but also the mental freedom to take time for yourself at night and weekends to start a new business.

Second: use nights, weekends & holiday time to study awkward and neglected business niches. It can be anything from stamps, to girls’ bracelets, dog’s collars, whatever. These niches are most of the times too small for deep-pocketed players to enter into, but big enough for small players to enter and profitably market their products without big marketing investments.

Third: once you have found an interesting niche, start selling your products there through one of the many available online portals (it can be Amazon, or Etsy, or Ebay). You will understand that every niche has its own preferred channel: use the most common one to achieve the initial lowest selling friction. Once you have learnt how to use this channel, you can start selling on different channels so to (hopefully) multiply your results.Action is very important. Do not think too much, do not wait to have the best product ever. As soon as you will start selling you will acquire knowledge of your market niche and you will learn from your mistakes (even if you are not able to sell at all).

Fourth: periodically evaluate your results. If you are not making at least 1000 USD of monthly profits after approximately the first 3 months, you must re-focus on a less exploited / more fertile niche. Margin is essential. This is just a business: you are not marrying your next wife. If it does not work, learn from your mistake and move on.

Fifth: after a few attempts you will get better (and luckier) and find a profitable niche. Once your own business stars yielding approximately 10k USD a month of monthly profit you can evaluate whether to ditch your job and focus exclusively on your own business.

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How did you lose your wealth? How much did you start with, and how much was left after you lost it?

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.

Nevertheless, he had saved enough money to make a (very good) living without any job: in particular his wealth consisted of 4 flats in the city center where he was living. Normally, he would sell one flat and make a living for the next 10 years. He calculated that his flats would allow him plenty of money for the rest of his life.

In 2004 he was driving on the highway late at night when a truck driver crashed on his sporty car (police ascertained that it was not my uncle’s fault).

The accident was very serious: my uncle was taken to hospital in critical conditions, had a few surgeries and eventually had a heart valve replaced during a very risky operation.

When he was still at the hospital, the insurance very ably tricked him into quickly signing an amicable settlement for 70k Euro: this seemed a lot of money right after the accident but soon revealed to be “peanuts” given the kind of injuries he suffered and the expenses he would have subsequently incurred in order to fully recover.

He got the insurance money immediately.

The surgery, rehabilitation and other expenses of the next 5 years basically cost him one of his flats (i.e. instead of lasting him 10 years, it lasted only 4-5).

Most importantly, after his heart was fixed he was not allowed to drive a car for some time and was very lonely (old friends disappeared quickly), slipped into depression and his lifestyle changed: he was buying a myriad of useless stuff like (admittedly majestic) Iranian carpets and expensive furniture, he was traveling continuously to some exotic locations with some new fake friends, had a few high-maintenance girlfriends scattered across Europe, etc.

The money from the second flat he sold lasted him only 4 years.

After he sold that second flat, he remained with only 2 more flats (and he was living in one of them).

He finished the money of his third flat in 3 years. He gradually started selling, one by one, all the useless stuff he bought (often times for very little money).

He then went into “panic mode” since he had no money, no other income and only his flat where he was living.

Also, because of the recent economic downturn in Italy and lack of expensive refurbishment works, his last flat was rapidly decaying and had dropped in value almost 40% in just a few years: to sell it would have been a disastrous decision.

At that point he was basically broke as he had one asset — the last flat — but had literally no cash.

He sold his last “substantial” asset (a Toyota Yaris he bought used just a year earlier) for 3k euro.

With this money he managed to live 3 more months when he received a letter confirming that the State will finally start issuing a pension.

This was summer last year: since September last year he is a happy – albeit very frugal – pensioner.

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