Alex Nottingham JD MBA shares three investment rules: don’t lose money, avoid distractions, and keep a long-term perspective with steady growth.
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About Alex Nottingham JD MBA
Alex is the CEO and Founder of All-Star Dental Academy®. He is a former Tony Robbins top coach and consultant, having worked with companies upwards of $100 million. His passion is to help others create personal wealth and make a positive impact on the people around them. Alex received his Juris Doctor (JD) and Master of Business Administration (MBA) from Florida International University.
Episode Transcript
Transcript performed by A.I. Please excuse the typos.
00:00
Hi, everyone. I’m Alex Nottingham, founder and CEO of All-Star Dental Academy. Let’s talk about the three rules to investing. Now, just a caveat, very important or disclaimer. I am not a financial planner. This is not financial advice or legal advice. Just want to put it out there. This is just my own personal experience of what I’ve seen. Over the years, I’ve had the great pleasure and joy in reading some of the top investment books out there.
00:29
Now, just for myself, I’m a very conservative investor. I will not gamble because I want as close to a sure thing as possible. Let me get to the three rules to investing. The first rule, and this I take from Warren Buffett and it has two parts. And the first part, or according to Warren Buffett, it’s rule number one, don’t lose money. Now,
00:58
Buffett has a second rule and I’m including that second rule in rule one. And his second rule is refer back to rule one. So don’t lose money when you’re investing. Don’t gamble. You might look at these individual stocks and go, wow, this is amazing. I have a buddy of mine that has Nvidia. He has millions of Nvidia. And he just calls me and says, Hey Alex, look, I don’t have to work. This is crazy. I sell it. I make money.
01:26
And then there are those before Nvidia, there was Tesla and it was just booming. But now it’s at this time it’s tanking and then, you know, it goes up, it goes down. You never know when it comes to individual stocks. Do you really know how they work? Do you know, are you reading their PNLs? Do you do market research and even the market experts have no idea what’s going on. It seems to me when the market as a whole goes up, everything goes up. And when the market as a whole goes down, everything goes down.
01:56
but it’s the fear of missing out. We never wanna miss out on an opportunity. Oh, they got it. They made the money. What about me? And so we have that pull. We have to be very mindful of that urge to want to keep up with what others are doing and not be left out. Totally understandable. And I even tried this with another investment strategy called dividend stocks. You buy these stocks and they pay dividends and you don’t care what they’re worth. Well, I bought them and…
02:24
I made some money on the dividends, but then they tanked. But the problem with that is that I had to worry, at least I worried, what’s happened to that stock? What’s going to go on? Is it going to stay where it’s at, go down? And then I’m worried that I bought at the right time. That’s going to, I’m going to talk more about that as we go along, but that’s an issue. Now the second rule of investing is don’t distract. We are all entrepreneurs. Our
02:52
Business is there to make the money, not the stocks per se. When you’re dealing with individual stocks, you are becoming distracted. Not to mention stress, worry, why do we need this? The goal is to live a happy life. And how much more money do you need to do that? And so it’s very important. We don’t want to trade money for happiness and time. We want to find balance. Unless you love researching.
03:22
stocks and some do. I don’t. Most don’t. Don’t do it. You want to avoid PETA investments or pain in the you know what fill in the blank. You don’t want to be doing things that are taking time away having you become distracted such as real estate. Real estate may make money but now you have tenants who have problems that go on. Do you want that headache? Same with stocks. What’s going on with my stock? Up down. Don’t do it. So rule number one. Don’t lose money.
03:50
Don’t do things you don’t know what you’re doing. Number two, don’t distract. Don’t be investing in things that are taken away from enjoying your life and running your business or your job or whatever you’re doing. Now, the third rule to investment is keep a long-term perspective. Investing should be like watching paint dry. It should be very boring. And it should be stacked in your favor because markets go up and they go down.
04:19
So if you plan for the long run, that’s a winning investment strategy. So what are our options? Well, cash right now at the time of this recording, cash is good, nearly 5%. Uh, and it’s very liquid real estate. It’s the market now is high, but people find ways of making money in real estate. Again, the, my issue with real estate besides my own home is I have to deal with tenants and problems pain in the, you know what, and then you have those individual stocks, we talked about the concern with that.
04:49
So cash interest rates will fluctuate. Usually cash will become poor eventually in terms of what they’re gonna give. I mentioned the issue of PETA with real estate individual stocks and stocks in general can be very risky. Now, is there a silver bullet? And I would say to you, yes, there is a silver bullet in investing. And it’s one fund. It’s the S&P 500 or total stock market. Basically the same thing. Why is this a silver bullet? Because this fund,
05:19
hasn’t lost money over the last 100 years. On average, long-term perspective, you may have a bad year, but on average, it’s making 8 to 10% every year, like watching paint dry. And you don’t have to research because the fund polices itself. If a stock goes bad in the fund, they get rid of it and put a new one in. And so it’s miraculous, 8 to 10%. And here’s the other thing, it’s too big to fail. Because the US economy, the US government will make sure
05:48
that the economy succeeds. And what’s one measure of the economy? It isn’t a stock. They don’t care about individual stock, but it’s the best stocks. It’s a representation of the total market or the biggest companies in the world that are too big to fail. Those are what drive our economy. And so the government, from a policy perspective, is gonna make sure they succeed, duh. So all you have to do is invest in America, invest in the best companies.
06:17
a huge fund like S&P 500, which has almost no expense fees. You don’t have to pay any broker or anything when it comes to that, and you’re making eight to 10% on your money. You will be doubling your money in every seven to eight years. So to learn more about some of this investment concept, check out my buddy, Tay Kim, Financial Tortoise on YouTube. He reinforces this over and over again. You wanna be slow and steady. Slow and steady wins the race.
06:47
That’s what it’s all about. And that’s what investing should be, slow and steady and boring. Thanks for joining me. Make sure you like, subscribe, comment, share, share with your friends. And until next time, go out there and be an All-Star.
