Just finished listening to Tony Robbins on a podcast where he discusses how to prepare for a bear market and be unshakeable/fearless. It was a fantastic interview and a timely reminder. To put this into context, the last bear market (crash) was in 2008 and market crash happens on average every 5 years, so we're overdue for one. The question is, are you prepared both financially and mentally? From a financial strategy point of view, he advises everyone to take a percentage of their money (income) that they'll keep forever, grow and compound, and provide passive income for the rest of their life without working (trading their time).
"You're never going to earn your way to wealth."
To be financially rich, he says that we need to be owner of businesses. We can do this through owning a index fund and being well diversified.
Mentally, we have to be prepared because we know "winter" is coming and winter is the best time on earth. It is the greatest opportunity of our lifetime to leap frog financially. The strategy is, you don't need to panic. When markets go up and down, you don't go up and down. Apply stoic philosophy here.
What is the difference between a market correction vs a crash? A correction is when it drops from the high of 10% or more up to 20%. A crash or bear market is when it drops 20% or more up to 80%. Yes! 80%, like in the great depression.
So when the winter comes, will you be financially and mentally ready?
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