#9 - Finance Fridays - Bill Ackman’s Investing Advice, MoneyBox’s New ETFs, Making Money on Fiverr

Contents:

• 💡 Idea of the Week - Reviewing Money Box's new ETFs

• 🎒Useful Resource - Ackman's 5 Things for Investing

• 🥗Side Hustle of the Week- Fiverr

• 📈 Number of the Week - Work 10% longer for 40% more pay

• ✅ Actionable Advice - 4 Questions To Secure Your Payrise

💡 Reviewing Money Box's new ETFs

So Moneybox just released new ETFs onto their platform and I had some thoughts: 

1. UBS Global Gender Equality

I’ve always remained sceptical about investing for moral or ethical reasons since I believe consumer behaviour is intrinsically selfish over doing the right thing. Although what does it say if a company is embracing gender equality more than others? Some would say that prioritising DEI initiatives compromises shareholder value for the sake of being woke. Others would view these companies as forward-looking, progressive entities that will not be left behind by upcoming cultural shifts. There is some evidence that DEI is positively correlated with future financial performance, but there’s no link between DEI and stock returns.

2. VanEck Semiconductor

Even though many new time investors will be excited to invest in the NASDAQ CTA Artificial Intelligence Index. I think it would be a safer bet to invest in the semiconductor industry since even if the AI hype train stabilises eventually, there will always be use for more computing power. Like the saying goes. Don’t dig for gold, sell shovels.

3. Vanguard U.K. Gilt UCITS ETF

Looking at the past performance of most of these funds, this is probably the worst one. This is not surprising given how bad the UK Economy and the current UK government is. Big investors are steering clear of UK government bonds given that anybody selling a 30-year-bond they bought at the start of 2022 would be looking at a capital loss of more than 40 per cent.

This fund did worse than most funds in 2022 when the whole stock market was down and recovered worse than most funds in the following years too. Funnily enough I wouldn’t give up investing in the UK economy because surely it can’t get worse. Right? RIGHT?

4. Invesco CoinShares Global Blockchain UCITS ETF

Now the dust is settling on cryptocurrency - oh wait Bitcoin has rallied to a new high point since 2021. It feels like a good time to get involved outside of the spotlight and in this case out of the actual trading of cryptocurrency. No meme coins to the moon, just the infrastructure behind the industry. Like semiconductors for AI, the foundations can always be repurposed for something else so this is actually a safer investment than picking from thousands of volatile crypto assets.

5. Global Property Shares ESG

The commercial property market scares me even if every corporate CEO is demanding their workers come back into the office 5 days a week. Inevitably, the cultural shift will head in one direction. Just think about all the cultural trends happening right now:

• There will be more remote workers

• Living in the city will price workers out

• Governments will be forced to regulate the housing market

• The housing market will price out more of the middle class

I just don’t see any trends showing property being as valuable as it has been historically.

Overall, my strategy is trying to avoid the hype to get a good price and focus on the industries doing well based on consumer needs that feel inevitable. Then continuing to dollars-cost average over the long term.

🎒Ackman's 5 Things for Investing

The first hour of Lex Fridman's podcast with Bill Ackman is a masterclass in investing. I've attempted to distil the top 5 pieces of advice from one of the most renowned investors.

Over the past 10 years, Ackman steered Pershing Square to 250% gains compared to a 225% total return by the S&P 500. So he probably has some noteworthy tips worth considering. 

1. To find a good price target companies that have made a fixable mistake

Pershing Square first invested $1.2 billion in Chipotle back in 2016 and has taken profits of over $800 million. Chipotle was still in the midst of a string of food safety issues including more than 60 people getting sick from salmonella poisoning after eating at a Chipotle restaurant in Minnesota. Two years later, shares rebounded in 2018, becoming one of the S&P 500’s recent top-performing stocks.

In his own words - “We get involved in cases where a great business has kind of made a big mistake or lost its way, but it’s recoverable.”. Apparently this was the reasoning behind buying Chipotle. Even with all the food poisoning scandals, it was an easily fixable issue.

2. Only invest what you can afford to lose

This is less about self preservation and more to do with maintaining composure in the market. If you're scared to lose money then it is hard to make the most optimal decisions when the market is most volatile.

3. Invest in what you can understand

This reminds me of a video of a UK rapper called Ard Adz losing 200k to Shibu Inu cryptocurrency without doing his due diligence. People will use that as an example of why crypto is a scam/ponzi scheme but I find it more interesting the lack of diversification. With a simple diversification strategy, he could have lost half his money but still have something worth holding on to in the long term. Many people lost money to crypto not because of the nature of the market but because they simply didn’t understand what they were investing in. YouTuber KSI says he has lost almost 2.8 million pounds in the cryptocurrency market crash.

3. Invest in Forever Companies 

You don't really know the true state of a company inside out. No matter how many financial statements you consume or shareholders calls you attend. There will also be a large part of the company you are in the dark about. What is indisputable, is their competitive advantage and whether it is sustainable - their business model. Ackman believes that AI will never displace legitimate artists’ work in the face of his fund’s stake in Universal Music Group. I would agree that susceptibility to AI is a very good litmus test for whether the company's advantage can last forever.

4. Don't lose money

Ironically this isn't the first time I've heard this. Warren Buffet also said “The first rule of an investment is don’t lose [money]. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are.”

Personally I like how another redditor put it - avoid losses before you pursue profits. Or avoid calamity before chasing returns. For example, before you put 50% of your money into crypto, either consider what’s the lowest it can go to or consider putting the same amount into the reliable S&P 500 fund to balance out your portfolio.

Even in a game of taking calculated risks, the aim is to not take unnecessary risks. Think long term and protect your portfolio.

Bonus - Don't over diversify 

46% of Pershing Capital’s fund is made up of just Hilton Hotel, Chipotle and Restaurant Brands International. I’ve included this one as a bonus because I think this one is relevant to fund managers trying to beat the market. The market will only go up so index funds are a safe bet since you're buying the market. But if you "do the work", you can attain bigger gains by putting your eggs in fewer well chosen baskets.

I can’t recommend it for newbies like us.

🥗Side Hustle of the Week (Fiverr)

1. Hours per week ⭐️⭐️

2. Skill required ⭐️

3. Up front cost ⭐️⭐️

4. Market saturation ⭐️⭐️

5. Timeline to reach success ⭐️⭐️

6. Income potential ⭐️⭐️⭐️

Fiverr specialises in microservices or "gigs'' that appeal to people needing help with quick, specific tasks. It is good for getting beginner experience in tasks like copywriting, designing, marketing, coding, spreadsheet building at an entry level. On the flip side, you can do the most niche tasks like voice overs. And even though it is called Fiverr, you can charge whatever you want but be prepared to start at a minimum wage per hour to get the ball rolling.

I think the income potential is low given that you'll always be competing with the lowest possible fee. And there's definitely a task for everyone on there so I’ve rated the skill requirement as pretty low. Just think about your day job and what specific tasks within it, you can potentially freelance on Fiverr.

Minus the 20% cut from profits, there's no upfront costs depending on your niche but there's a lot of competition. 

How to Get Good at Making Money on Fiverr

This excerpt from Reddit summarises how to get good at making money on Fiverr:

“Being successful on Fiverr requires you to play the game (understand the algorithm as well as any human can, make your gigs look good with great thumbnails, descriptions and work samples). Start with low prices and deliver amazing quality and customer service so you can get social proof with good reviews. Then slowly build your clientele and raise your prices. The algorithm is fickle and constantly being tinkered with, but if you can capitalise on the good times to build repeat customers that come back during the times when you are ranking low in searches, and keep giving amazing service, you should do well.” 

If you’re getting started these are the best tips from this Reddit post:

1. Don’t leave anything blank in your profile or gig

2. Deliver as quickly as possible

3. Avoid cancellations

4. Respond to messages as fast as you can—within less than an hour

5. Try to give them something they don’t expect—a little extra like a higher resolution file

6. Promote your gigs on social media and elsewhere 

7. Follow up with previous buyers. Offer them a discount if they order again

8. You are not working for money when you first start. You are working for reviews/social proof, and to learn how Fiverr works. 

9. Look at everything from the buyers perspective and take away all possible barriers. 

10. Be nice, do great work, communicate, and see what happens.ctionable Advice 

📈 Number of the Week - Work 10% longer for 40% more pay

Jordan Peterson has frequently claimed that if you work 10% longer hours, you’ll earn 40% more money. This flies in the face of Gen Z’ers on TikTok refusing to work a minute past 5pm.

So let’s run the numbers. In a 40 hour workweek, that’s an extra 4 hours every week which you can spread out however you want. For example, you can either:

• Finish work 1 hour later - Monday to Thursday

• Start work 1 hour earlier - Monday to Thursday

• Work an extra 4 hours every Saturday morning

• Work an extra 4 hours every Sunday night

• Work an extra 2 hours 2 out of the 5 weekdays

Obviously there’s more variations but you get the point. Depending on your ambition this might sound reasonable or completely out of the question. But when I think about it practically it makes sense. Entrepreneurs will tell you they work 24/7. You’ve probably come across a manager who stays later and starts earlier than you.

But it all depends on what you're working on. The extra work needs to be ruthlessly working on what will get you promoted or a pay rise. So how do you ensure the extra work you’re doing will translate into more money?

Make it count. Use these 4 questions to spearhead your journey to a promotion or pay rise.

✅ 4 Questions That Will Change The Trajectory of your Career Path

1. How much time do you dedicate to getting promoted? 

Your day-to-day tasks don't count. Instead it is more likely the extra work where you're leading on projects, positioned to take maximum recognition and are under the gaze of senior management is where the overtime is worth it.

2. Have you told anyone about the extra work you’re putting in?

If your line manager isn’t even paying attention to the extra value you’re providing the business, you’re wasting your time. Market yourself internally every time you do something substantial.

3. How much value are you bringing?

If you cannot quantify the value you bring to your employer then focus on finding a way to rectify that. Like people say, numbers never lie.

4. Have you recorded it?

Make it a regular habit to record every time you reach a milestone or follow-through on an achievement so when the year-end performance review comes round, you’re prepared to sell your line manager on your promotion.

Key takeaways:

• Timeblock time to focus on what will lead to career success

• When you achieve something, find a way to let people know internally

• Quantify your achievements

• Make it a habit to record every moment of success.

✍🏿Quote of the Week 

The extent of success is pure luck. Do not expect to be a statistical error, expect  something good to happen.

― Professor Hicham Benjelloun