Ep313: Elizabeth Buko – Take Your Time to Learn Before You Start Investing

Andrew Stotz 00:03
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community we know that to win in investing, you must take risk but to win big, you've got to reduce it. This episode is sponsored by a starts Academy online course how to start building your wealth investing in the stock market. I wrote this course for those who want to go from feeling frustrated, intimidated or overwhelmed by the stock market to becoming confident and in control of their financial future. Go to my worst investment ever.com slash deals to claim your discount. Now, fellow risk takers This is your worst podcast host Andrew Stotz. And I'm here with featured guest, Elizabeth buco. Elizabeth, are you ready to rock?

00:50
Definitely,

00:50
Andrew. Let's do it.

Andrew Stotz 00:52
All right. So let me introduce you to the audience. Elizabeth is an author, and wealth coach. She helps entrepreneurs improve their finances and start their wealth building journey by changing the way they think about money. From a faith based perspective. Elizabeth has helped women eliminate 10s of 1000s in personal debt, start investing towards their financial goals, grow their net worth to multiple six and seven figures. And let go of deep personal beliefs that limit them financially. She is the founder of wealth from Lidl, where she runs monthly wealth creation classes. She is married, and has two young children. And we may even hear them in the background at some point. And listen, take a minute and fill any further tidbits about your life.

Elizabeth Buko 01:42
Yeah, thank you. Thank you. Something really interesting is that I actually studied Chemical Engineering at university. I have a master's in engineering. And now I'm a financial coach. It's a completely different industry. And I absolutely loved my hybrid.

Andrew Stotz 02:04
And was it difficult to make that transition to go from engineering to you know, helping people with their finances?

02:12
No,

Elizabeth Buko 02:13
it actually wasn't. I've always been interested in money ever state, you know, from my teenage years, even younger than that. always been interested in money and interested how money works. And as I grew up, you know, I'd been people would say, I was good with money. And so when my engineering career came to an end, because I got made by row got made redundant. I had two children at a time. And I was, I was thinking of what I wanted to do next. And it came to me helping people with money was just something that was natural for me. And I just retrained.

Andrew Stotz 03:00
Yeah. And it's interesting in at I teach, one of the courses I teach is the valuation masterclass. I have a lot of young people that want to become financial analysts and fund managers, they want to go into the finance industry. And the most common non finance and accounting major that comes into the course, is engineering. And I suspect that some of it has to do with the structure that we learn, whether that's engineering or science or that type of thing. There's a structure and a logical framework. And to some extent that applies in the world of finance. Would you say that that's the structure that you learn in engineering, does that help you in the world of finance? Or does it hurt you?

Elizabeth Buko 03:41
Absolutely. In university, I remember about at least 30% of my peers went on straight to get a job in the investment banking, right after graduating from a master's in engineering, and they got swept up straight away. The way we are trained as engineers does have, you know, great benefits for the financial industry is

Andrew Stotz 04:11
interesting that someone in Thailand that I listened to said that they only hire engineers for almost every position that they hire for. And part of the argument that they make is that engineers have a structured way of thinking so yeah, that's interesting.

Elizabeth Buko 04:30
definition. Yeah, we do think differently. And we're trained to think that we are trained to think structurally and logically. So yeah, I think that that really was a great foundation for

04:42
my new career.

Andrew Stotz 04:44
And maybe just tell us just briefly about what you're doing and how it works and kind of just so that we can understand what is your business? I noticed, for instance, faith based was one of the things that you said in your bio, maybe just tell us a little bit more about what you're doing.

Elizabeth Buko 05:00
Yes, excuse me. So basically, I help women change the way professionals and entrepreneurs change the way they think about money so they can start building wealth. One thing that most people might believe is that building wealth is all strategy 100% strategy. So they want to know the right way to say the right things to invest in, how to get out of debt, and all those things are very important. But the thing that will help you and also, you know, they also want to know how they can make more money, right? But a lot of those things are very important, but what will help you ensure that you achieve your goals? Is your mindset? How, what how you feel about money? When you think about money? What do you think about saving? How does that? How do you feel about the money in your account and not spending it? Are you okay to have money? Are you okay to delay gratification? Are you? Do you feel like you need to reward yourself every single time, just because maybe you woke up? You took a breath? and therefore you deserve something? Or do you feel like you can reward yourself in the future? And all those, the answers to all those questions lie in the way we think, how we think about things, how we interpret the world, you know, one thing I believe is that we are meaning making beans, right, we make meaning out so everything that we decide what that meaning is. And I'm a Christian, and I have a strong faith in God. And I use biblical principles to help people with that mindset, the Bible says, as a man thinketh so he is He that means that, you know, you don't need to, once you see the way someone is thinking, now you can have an idea of what the results will be in the future. Right. So and everything that we have right now is a direct most cases is directly related to how we were thinking. In the past, for example, I got made redundant. And from my role, my role gmit was redundant, not be made redundant, while after seven to eight years working in engineering. And if and when that happened, when a loved one feels happened along with that, you know, I did it, I did experience some financial losses, along with that. But when that happened, I can actually see how the way I thought led to that, because the company was experiencing financial issues. And due to some restructuring, my role got eliminated. When that started happening. Some people were already leaving, because they were talking that they don't see if this company can afford to keep them any employees, they can see that we're struggling. So they were going to leave. I on the other hand stayed. I said I was staying out of loyalty out of love out of the fact that this company was my family. But the truth was, I was scared to leave. I was scared to leave because I did not feel good enough. Even though I was great in my role. In my mind, I thought I was great in my role only in this environment, with these colleagues with this managers and this boss building. Because of the way my business my company was structured, and I couldn't do anything else. This was the story I told myself. So leaving and joining a new company and starting from scratch and learning everything new was scary. me like things that are comfortable when and I was very comfortable in that company. I did not want to push myself out of my comfort zone. And I stayed angry as a result of saying yeah, it was appreciated by my company. But eventually when you know stuff happened, oh my god, we

Andrew Stotz 09:15
got it. So mindset is critical. All right, well, now it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking it will be. Tell us a bit about the circumstance leading up to it and then tell us your story.

Elizabeth Buko 09:33
I was okay. I was an intern working nine to six and every month every penny I earned I was saving. I was saving paying essential bills, but saving as much as I could. I was about 19 at the point and I decided I was going to be rich, it was a decision, I made it. And I said, I have to be. Now, how do I get rich? That was the next question. And I was thinking, I need to find how I'm going to get rich. And I'd heard about the stock market. people invest all the time, you know, when and things blew up. And at that point, several companies had blown up. And I'd read in the newspaper about those who had invested in those companies as like seed investors in the initial stages, and they were now like, multimillionaires. And so I said, I was going to be like these people. And you know, some of them were rock stars. Some of them were famous people, some of them were wealthy, rich people already. And I said, I was just like these people. I started looking for information about investing. And I really didn't find the information, I was speaking to all my friends, and none of them could tell me how to go about it. Obviously, Google is a good friend, but Google just spits out like a million results, right? And I'm reading through it, every strategy looks different from the next. And it's confusing, and I'm like, What is this and I knew, and every day, I was trying to get more information, I felt like I'm just losing a penny that could be making investments. And so be 19 being very energetic being like, you know, just wanting to go for it without and jump head in. I realized, well, I couldn't find anyone to help me. So I'm just going to do it. And I invested in I picked the stock. Because that was the only way I knew how to invest. I never knew I thought that investing was picking stocks, like 19, pick the stock put in my hard earned cash in that stock. And literally, like, I felt like I was like, a Vegas, right? Just throw the dice. And then then I picked, you know, I kept on working. And I picked the second stock, like maybe a month later. And I invested in that second stock as well. And what happens next is, a few months later, the first stock goes into the company goes into some issues. And it uses value. Like it's like, what pennies, I think I still have it like, what, gosh, 10, less than 10% of what I paid. And then the second stock was still doing well. And I was earning dividends initially. But then, and the money was growing. Fast forward. 67 years later, it just crashed. You know, there was one of this recession related events happened, and the company couldn't, who couldn't survive and crashed.

Andrew Stotz 13:13
And so that was it. What was the amount that you lost? And how meaningful was it in your life at the time.

Elizabeth Buko 13:20
So at the time, when I was 19, I invested about maybe 50 50% of what I saved. And I at that point, it was very meaningful, because it was okay, I'm 19 I'm not earning a lot. But my friends are going out. They're great. My sisters are going shopping, my friends are going to you know, going to the cinema going out for dinner, having fun, you know, spending money, and I'm like, I can't afford it. Can I drink I'll drink water. I'm like scrimping because I'm like, trying to like be rich and trying to put on my money and make and get rich in 30 years or 20 years or something. And so that first investment, I think I had saved about at that point, I think I'd saved about 4000 pounds, and I put in 2000 and at that point 2000 was like that was the most I had ever made I ever had. It was like a 19 was like a lot of money. I put that in and yeah, that. You know when it disappeared, I wanted to cry. And then the second couple of months later I put in the rest. And I had been I had planned to go to I plan to take travel the next year to study abroad for a year so I knew I had to continue working and saving so that I could do that trip the following year. But for that second amount I put that in and I had calculated that the money would have grown, and how it was going to, you know, make money. And every year, he put added money to it, and I'll keep investing, and it was going to be an ongoing process. And by the time that I lost it, I believe it had grown to about I can't remember where it was either between 15. And about 15,000. I think that it had grown too. And the company was, you know, doing well, I felt that his stock was doing really well. But

Andrew Stotz 15:40
then one day,

Elizabeth Buko 15:41
and then one day, then one day,

Andrew Stotz 15:43
tell us what lessons did you learn from this experience?

15:47
Well,

Elizabeth Buko 15:48
I had no idea how to invest. I thought investing was picking stocks, I had no information. I tried to find information, when I didn't, I took matters into my own hands. It was a risky play. I'm happy I took that risk, then when I was 19. Not now, when I have two children, but you know, then it was, you know, a huge loss. And I felt like I lost the world. But it showed me where my weaknesses were one. One was that I was motivated by fear of it wasn't really the desire to be rich, but it was the fear of being poor. Like I didn't want to be poor. So I wanted to put some money there. And when you're motivated by that,

Andrew Stotz 16:41
is it Yeah, push you into that action and say, Okay, I'm just gonna do this.

Elizabeth Buko 16:46
Exactly. So the fear of being poor pushed me into putting my money in a stock that I did not research, I did not know what the stock market was doing. I did not have any idea, the only thing I knew was from watching Hollywood movies. Honestly, that was where I got my education from. So the fear pushed me into making those decisions without clearly understanding how to invest as a beginner and where to you know how to ensure that I achieved my goal, my goal was to ensure that was to be secure, I wanted security for life. That was my ultimate goal. It wasn't just to be rich, I didn't know how to achieve that goal.

Andrew Stotz 17:29
So maybe I'll summarize what I took away from what you've explained. I mean, first thing is, after interviewing many people about their worst investment ever, I've come up with six common mistakes. And the first most common mistake is failed to do the research. And I would say, you know, to some extent, that's what happened here. And that's, and it's most common thing, second, most common, is failed to properly assess and manage risk. And I would say, those are the two ones, there's other ones, but I'd say those two really fit this case. Now. Maybe I'll explain some of the things I just wrote down a few things as you were going through it, I mean, first thing is to think about excitement about investing is not enough. Just because you're excited. And you see Warren Buffett and you see these books, and you see this and that, you know, investing is a serious business that can really strip you of your wealth very quickly. It's just like, getting excited about going to the casino with your friends for the weekend. And like really excited about all the money you're gonna make and how easy it's going to be. And you usually will be very downtrodden by the time you leave. Now, the other one is the idea of diversification. In my course, about how to start building your wealth investing in the stock market, I talked about one of the research papers that I wrote, which was about looking at the number of stocks that you should have in a portfolio, if you're going to invest in stocks, my estimate is that you should have about 10, you shouldn't have one or two, and you don't need to have 20 or 30. Or else you're just mimicking the market, you might as well buy a market index ETF or something like that. So most but but yet most people have, I think it's like 70% of people have their portfolios to stocks. And so it's very, very common that people don't diversify. And this is the damage that it can cause. Right. And the other thing is that a lot of times what I teach like when I taught my niece's about how to invest. I said, this is the instrument you should buy this particular ETF or fund and you should hold it forever, never sell. Now that's an ETF or a fund that owns many, many stocks. But when you look at individual stocks, you can never hold an individual stock forever you'd like to, but things change. I think that's another important thing. And the last thing is about mindset. You know if we went out to dinner, and I ordered something, chances are, I'm not going to order shellfish. Not because I'm selfish, it's because I don't like shellfish so much. I mean, I could eat it, but I'll eat, you know, lobster, or Ollie shrimp. But shellfish, I just don't order that much. And I, a couple of years ago, I was talking about my mom and she said, You remember, when we took that holiday to New Jersey, and your father and your two sisters got hepatitis from eating shellfish. And you and I were the only ones that didn't get it. And they were quarantined in the house. You know, for this period time, it's like God can just barely remember that. Just barely remember that. But then it's like, everything connected, why don't eat shellfish. And so this is a good example of the concept of mindset is put in there for you know, good reasons, bad reasons, logical reasons, not so logical reasons. But it was there. And it was impacting the way I ate, and acted in my life. And it was driven by that. And so that's my example of mindset. Anything you'd add to those things that I took away?

Elizabeth Buko 21:15
Yeah, definitely, I think you're completely right. Lack of research, I didn't know what I was doing. 100%. But I, and I didn't take the time to diligently do my due diligence, I didn't take the time to research and figure out what was happening. I was, what you would say was, I was one of those people who are trying to get rich quick, you know, in the stock market, and it was, it's, and that's not how to invest that's not you know, how to, that's not how to grow your your wealth. You know, you, you do need information, you do need advice, you do need education, the right education. And you do have to have the mindset of you're not trying to get rich quick. And those things were definitely, definitely the excitement was there. And I was treating it like almost like gambling. Yeah, I was, I was treating that, you know, what I was doing, like gambling and hoping for the best trusting for the best, you know, like, Okay, I'm just going to put it there. And I'm going to trust that everyone in the company and they share their board of directors, and everybody else who will take care of my money, because

22:42
I'm trusting.

Andrew Stotz 22:45
Alright, so based on what you learned from this story, and what you continue to learn, what one action would you recommend our listeners take to avoid suffering the same fate? Think about that young man or woman out there who is starting to make some money. They don't know anything about investing. And they're just, you know, but they're getting excited. They're feeling that impulse, like they got to do something. What one action? Would you recommend that they take?

Elizabeth Buko 23:11
definitely get some education. I think we all need. We know. We're all learning. We keep learning every day. And wherever you are, you need the education and information to get you to the next step. However much it would have cost me to get the right help the right education, the right information to make the right decision is minimal compared to the amount that I lost by investing and the time and the growth and the profit that I would have gained if I had put that that whole amount into a different investment vehicle than than the stocks that I had picked. It's my I don't even want to do the calculations of where it would be now from when I was 19. Almost. Geez.

Andrew Stotz 24:14
A long time ago.

Elizabeth Buko 24:16
Yeah. 15 or 16 years ago. Yeah, I can't remember now. But yeah. My imagine how it would have grown if I had invested it in the right investment vehicles. But I didn't, I didn't have that knowledge. I didn't have that education. And I think that any young person right now, there's so much more the education and the information is so much more available than it was then. So you don't have an excuse to not find it. The Bible talks about in everything that we do, we should get wisdom and it talks about having knowledge, understanding and wisdom. And those three things are so important. And knowledge is, you know, information and then understanding is understanding is being able to apply to your situation, understanding how that information applies to you and being able to pick out what is good for you. And then wisdom is being able to implement and take the right decisions based on what you understand and what you've learned. You know, and those three things are so important. And, and the Bible talks about how wisdom is the way to gain wealth. So I think that

25:37
sounds good.

Andrew Stotz 25:40
Last question, what's your number one goal for the next 12 months?

Elizabeth Buko 25:45
My number one goal for the next 12 months is to just is to love 100 more women and through wealth from Little Adam, you know, right now I, I support hundreds of women during my free monthly calls. But I also want to support more women one on one through my programs, and give them the knowledge, the understanding the faith and the strategies so that they can you know, get out of that they can start building wealth, they can turn their financial lives around that

Andrew Stotz 26:24
way for someone's listening to this, what's the best way for them to contact you? If they want to join in on that?

26:31
Yeah,

Elizabeth Buko 26:32
so my website is Elizabeth bukata, calm, you can log on, you can you can type that in and find information about any of my free trainings, you can see past trainings and sign up to watch them on Instagram at wealth from Little am on Facebook at wealth from Little. And you can also. Yeah, yeah, they can also send you a message and you can find you can send that. And on LinkedIn. Okay.

Andrew Stotz 27:04
Yeah, actually, that's how we originally met LinkedIn. Yeah. Don't be afraid to reach out to Elizabeth. And also I'll put all the links that in the show notes. So for those of you that want to go there and reach out, do so. Alright, listeners, there you have it. Another story of loss to keep you winning. Remember to go to my worst investment ever.com slash deals to claim your discount on how to start building your wealth investing in the stock market. As we conclude, Elizabeth, I want to thank you again, for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Elizabeth Buko 27:51
Yeah, I do. There is this quote that I always say to myself, when I teach my children as well. And I think the quote has helped me through a lot of difficult situations where I feel stuck. And it's also from the Bible in Philippians chapter four, verse 13, but it says that I can do all things through Christ who strengthens me. And when I feel stuck, I feel like when are faced with when I face my redundancy, I faced changing careers, they faced difficulties in different areas of my life. And I felt like giving up or felt like our fields are just not working, what's the point? I remember that I can do all things and that motivates me to keep pushing. And you know, you don't actually feel them to give up. And, you know, for your listeners out there if you're facing you know, you faced loss in some way. You face some sort of rejection isolation or, or hardship. You can do all things what, you know, whatever that all means to you. It's more than possible if you believe it.

Andrew Stotz 29:09
Yeah, that's beautiful. When I was young, somebody said to me, God won't give you more than you can handle. Well, that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.