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Published May 25, 2023

169R | Prepared, Not Scared

Brad Barrett and Jonathan Mendosa delve into strategies for thriving during market downturns with a 'prepared, not scared' mindset, discuss entrepreneurial ventures as avenues to financial independence, explore tax credits for minimizing tax liabilities, and highlight the growing, inclusive ChooseFI community celebrating financial milestones.
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Episode Highlights

  • Mindset

    In the face of market downturns, maintaining a 'prepared, not scared' mindset is crucial. emphasizes that financial planning is a long-term journey, spanning decades, rather than reacting to short-term market fluctuations 1. He acknowledges that witnessing a significant drop in net worth can be unsettling, but stresses the importance of having a plan and sticking to it. adds that enduring a market correction is a milestone in one's financial journey, reinforcing the need for financial fortitude 2.

    You need to figure out how you are going to react ahead of time so you don't let your emotional brain get involved in it and screw you up.

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    This approach helps investors remain confident and focused on their long-term goals, even when faced with market volatility.

       

    Reset Options

    Exploring financial reset options can be a strategic move during downturns. suggests that downturns might be an opportunity for a sabbatical or a career change, rather than a full retirement 3. He also highlights the importance of asset allocation and rebalancing portfolios to buffer against market volatility. notes that continuing to invest during downturns can be advantageous, as it allows investors to buy assets at lower prices 4.

    There's no failing with Phi you can't fail when you have a 50% savings rate. That's your force of freaking solitude. That's your superpower.

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    This mindset encourages investors to view downturns as opportunities for strategic financial adjustments.

       

    Managing Fear

    Fear is a powerful emotion that can cloud investment decisions. advises removing emotional responses from financial decision-making to avoid following the herd and making poor investment choices 5. He suggests thinking in terms of probabilities and increasing the likelihood of success without taking unnecessary risks. shares his perspective on reframing market downturns as opportunities to buy at a discount, rather than reasons to panic 6.

    You do need to take your emotional kind of lizard brain out of the decision making process when it comes to investing.

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    This approach helps maintain a rational perspective, focusing on long-term benefits rather than short-term fears.

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