Time to confess a dirty little secret:

HOW I LOST $1 MILLION

This is the screenshot of a #networth tracker I used during the potstock mania in 2017. As you can see life got real, REAL fast. In this thread I will explain the rollercoaster and what I learned. (1/X)

I first heard about the potential for Canadian cannabis legalization from some friends in 2015. Justin Trudeau looked like he would win the election for Prime Minister and he promised to legalized cannabis. So I decided to take a chance and start buying pot stocks. (2/X)

At that point I had been investing in blue chip stocks since age 19 and had built up $85k. I started buying aggressively as all the pot stocks were around $1 and I figured they could only go up.

I was right. VERY right.

From 2015 to 2017 I traded in and out constantly (3/X)

I couldn’t believe my luck!

As my account grew I started adding leverage and my net worth could swing as much as $50-100k in a single day.

Everytime I got close to the next major milestone I promised myself I would sell and walk away (4/X)

$100k ... just a little more
$250k ... just a little more
$500k ... I could retire soon
$1,000,000 ... why stop now

As you can see from the picture above, it got wild around the end of 2017. I had $300k or leveraged debt at that point. I was playing with a time bomb (5/X)

Hindsight 20/20, I look back at this every single day and kick myself for not walking. My entire life could have looked very different today.

We all know how these stories end... the bubble pops. People are so drunk on greed they convince themselves it’ll turn around. (6/X)

When your net worth frequently swings by $100k in a day you lose touch with reality. It doesn’t even feel like real money at that point. Normal becomes distorted.

Ego takes over.

I actually thought I was “smart” and my success was the result of my talent. (7/X)

Time for the lessons learned:

1) Ego is dangerous. I’ve learned to self reflect constantly in order maintain perspective and remain grounded.

2) I am not smarter than the market. I was in the right place at the right time. I was the beneficiary of a mania fueled bubble (8/X)

3) If you are fortunate enough to get a quick win and things seem too good to be true, they probably are. It’s time to take money off the table. Whether it is crypto or some other speculative stock... protect yourself and don’t bet the farm.

Better yet, just don’t go there (9/X)

4) Investing in something that volatile and speculative will consume you. I was obsessed and spent every minute of the day glued to my phone. It compromised my performance at work and as a husband/father. The stress was overwhelming and I was practically bi-polar (10/X)

5) Taxes suck.

I had two years where I owed more than 6 figures in taxes. After the second year I was warned by my accountant to stop trading as I could really get myself into deep trouble with the tax man. This spooked me and today I only buy and hold. (11/X)

The good:

- Paid off my wife’s car
- Bought a new SUV with cash
- Paid 20% off our mortgage two years in a row
- Reno’d our house and backyard with cash
- By the time I threw in the towel (paid all taxes and debts) we went from $85k to roughly $400k in net worth (12/X)

There’s not a single day the guilt doesn’t creep in and remind me what an idiot I was. It’s impossible not to think about what could have been.

Do I wish it ended differently?
Absolutely.

Do I regret living this experience?
No.

I needed to learn these lessons. (13/X)

Today, I’ve returned to my roots of fundamentals in personal finance.

I track my #cashflow at the beginning of every month with a simple spreadsheet. We focus on controlling the controllables. All positive cashflow goes towards our mortgage which is our only debt

(14/X)

We will be millionaires again one day.

I am DONE with ego and greed.

My goal is to have #StealthWealth and help others.

Follow me to join my journey of growth and financial education.

(15/15)

For anyone who has read ESI’s Millionaire Interview series...

I was #68. This was done shortly after the great fall started https://esimoney.com/millionaire-interview-68/