In this podcast episode, I emphasize the importance of recognizing that personal finance is truly personal, and that popular advice from personal finance gurus often doesn’t fit everyone's unique circumstances. I share 5 pieces of prevalent personal finance advice that did NOT work for me at all, and I also share what would have worked with the 20/20 hindsight.

1. To become wealthy, you need to budget, be frugal, and save a large percentage of your income. Following this advice had made me feel deprived and I wasn't truly happy. Instead, now I realized that increasing earned income might have been more beneficial.

2. House hacking is a great way to save money, because housing is the largest expense category. This strategy was simply too difficult, if not possible at all, to implement in the area I live. I should have hacked child care instead.

3. Other people appear wealthy but they are actually poor, so don’t fall into the comparison trip. This is good advice if it's actually true. There can be a concentration of people who are indeed wealthy in the costal areas, which is where I live. Instead of denying this fact, I should have put aside my ego, and learned from these well-to-do individuals much sooner.

4. Retirement, better yet early retirement, is the holy grail. I challenge the notion of early retirement as a universal goal, advocating instead for finding passion in work.

5. Invest in index funds that mimic the market, such as the S&P 500 index. While index funds are popular, and it may well be the best advice for many people, learning to pick individual stocks can be more rewarding if done thoughtfully, and if it suits your aptitude and personality.

Ultimately, I conclude that personal finance should be customized to one's own life, values, and happiness.

Value investing is a time-tested approach to investing, but it’s often misunderstood. Here are five common myths about value investing, debunked:

Myth 1: Value investing is too hard.

Many believe that determining a stock's intrinsic value is difficult. However, intrinsic value is based on the future cash flows a company is expected to generate. While this requires some analysis, the principle is simple: invest when a company’s stock price is below its intrinsic value.

Myth 2: Value investing doesn’t work.

Skeptics argue that value investing can’t work because if it did, everyone would do it, and there would be more Warren Buffetts. However, the success of value investors like Buffett disproves the Efficient Market Theory, which suggests that market prices always reflect true value. The consistency of returns from value investing in Omaha, Nebraska, and elsewhere, shows it does work—just not for everyone.

Myth 3: Value investing is boring.

While it’s true that many value investors focus on established companies, the idea that value investing is inherently boring is wrong. The key is understanding companies within your “circle of competence.” Successful value investors have made significant gains in industries like gaming, social media, and tech, not just “boring” businesses.

Myth 4: Value investors avoid high-growth companies.

Contrary to popular belief, value investors have invested in high-growth companies like Amazon. Bill Miller, a well-known value investor, famously invested in Amazon when its stock was undervalued during the dot-com bust, proving that value investing can involve high-growth stocks.

Myth 5: Just follow what other value investors are buying.

Simply copying famous value investors is a mistake. Value investing requires buying stocks at a discount, which means doing your own research and understanding your circle of competence. What works for Warren Buffett may not work for you.

In conclusion, value investing isn’t as difficult or outdated as some might think. With the right application, it remains a powerful investment strategy.

In my last YouTube video about Tesla, I was skeptical about investing in it. But after diving deep into the company, guess what? I changed my mind! The stock hit a 52-week low sometime this year, so I started buying shares between $140 and $180. Now, it's around $220 (July 30, 2024), so it’s been a decent profit so far, and I'm holding for the long term.

I discuss three main reasons that made me change my mind in this episode:

1. Dude is crazy and uncompromising - it’s a bad trait to be likable but good for business. A big reason for my change was Walter Isaacson’s biography of Elon Musk. It shows Musk as a driven, multifaceted person who, despite being difficult, gets things done. For example, he insisted on unique Tesla door handles, even though it raised engineering challenges and costs, in order to make EVs more desirable, which was his original vision.

#2. Elon really believes in his vision and would do whatever it takes to make it happen. He truly believes in EVs as the future because fossil fuels will run out. His relentless drive to change the world, not just make a profit, is inspiring and a common trait in the founders of groundbreaking companies.

#3. Just like any companies that disrupted, whose growth trajectory, and stock price for that matter, never followed a linear path, neither will Tesla’s. Value investor Christopher Tsai made this critical point. He compared Tesla to Ford's trajectory and impact on the auto industry. Despite challenges, he thinks Tesla is set for success, especially as EVs become inevitable due to limited fossil fuels. In many ways, Tesla is way ahead of its competitors, and therefore will become the ultimate low cost EV manufacturer.

In short, Musk’s vision and the "getting things done" ability, Tesla’s leading position in the EV revolution, and validation from seasoned investors convinced me to invest. Even though I was skeptical before, I now see Tesla as a company ready to shape the future.