Ep340: Jonaed Iqbal – Ponder How Much You Can Stomach to Lose When Buying Crypto

Andrew Stotz 00:02
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 risks, but to win big, you've got to reduce it. And I bet you're exposed to investment risk right now. To reduce it, go to my worst investment ever.com and download the risk reduction checklist I've made specifically for you. Based on the lessons learned from all my guests, fellow risk takers, this is your worst podcast host Andrew Stotz, from a Stotz Academy in here with featured guests, denied equal denied, are you ready to rock?

Jonaed Iqbal 00:41
I'm so ready.

Andrew Stotz 00:45
Jeanette, and I met through a prior guest. And basically, I just love what you're into. And so I'm so happy to have you on the show. And let me introduce you to the audience. Tonight, Evo has worked with over 100 candidates, many of whom have gotten jobs at places like Tesla, Amazon, at&t, and MetLife. To name a few. denia brings a unique flair to the career consulting world, he is set on shattering the stigma associated with hiring people without college degrees, it's no surprise that he founded no degree.com a platform with job listings that don't require college degrees. Can I take a minute and fill any further tidbits about your life?

Jonaed Iqbal 01:36
Yeah, I mean, I'll give a quick background, I kind of saw that colleges were just getting so expensive. I mean, there was a time in the 90s, you could major in music, you could get a corporate job, and you'd be good. And you'd pay very little right? You hear the stories of people working summer jobs, mowing lawns, and paying tuition. And now it's like you could get a job as a CEO and still struggle to pay your tuition. And the fact is the world's changing, right education is changing. We saw it this year where people were still paying full price tuition for zoom University, and how much the zoom costs right at 15, dot multiply 15, whatever, the licenses, and I just don't like how they're taking advantage of students, especially when it's so much easier to learn. And there's so many ways to learn, and the world is changing, and schools just take a long time to change. So my goal is to really assist people and kind of learn about all the different ways that you can earn money.

Andrew Stotz 02:26
That's awesome. And, you know, there's so many things that I thought about when I first you know, heard what you're doing. I thought about the crazy ridiculous inflation in education prices. And for those people who don't understand it in America, one of the things that I would attribute the inflation to is government pumping money into student loans. When the government pumps money into people's pockets, the demand rises massively. And therefore, the universities and the colleges know the demand is there. And they can raise prices as much as they want. So in fact, it is in some ways a government created. Yeah, catastrophe.

Jonaed Iqbal 03:13
And then as they play a big part,

Andrew Stotz 03:15
yeah. So that, you know, aspect is the same exact thing that I saw happen in the mortgage crisis, where the government pumped, they basically pushed out huge amount of funding, using the banks to get to issue the bonds and the mortgages. So to lower income higher risk people as a political move, which, you know, I'm not against that. It's just that you have to accept it. As you go down the risk, there's costs. But instead of handling the costs up front, they stuffed it back into Fannie Mae and Freddie Mac. And then eventually, they blame the banks for doing it. And then eventually, the banks did do bad things, but they were fueling this fire, which drove up, you know, brought millions of new buyers into the market and push up prices, simple economics. And here we see it in the education space. And so that's the first thing and I go back to when I went to Cal State, Long Beach, I went to Cal State, Long Beach City College first because I couldn't afford Cal State Long Beach, which was $100 a credit.

Jonaed Iqbal 04:22
Yo man so expensive.

Andrew Stotz 04:25
So I was able to pay like, I don't know, $40 a credit at Long Beach City College until I got you know, citizenship or whatever it would be called a residency in California. And then I could afford Cal State Long Beach at about $100 a credit in I graduated in 1989. Not that long ago. Yeah. So anyways, first thing is, I really love what you're doing from the perspective of students are getting, you know, ripped off, and the government's fueling.

04:55
yamana 100%.

Andrew Stotz 04:58
The second reason why I love what you're doing That, it wouldn't be bad. If you're spending a lot of money for an education that's going to allow you to create a huge amount of income. Yeah, but that's not that's not the case anymore, what they're learning at these schools now that they don't have to, you know, serve the customer the way you and I have to do that, because they know, fundings their money's gonna come, students are going to be there. So I'm just gonna tell a quick story. And then this is the second reason why I like what you did. The first is that school is so expensive. The second reason is that I have a group of interns and I've been working with a lot of interns, since it's hard for them to get jobs right now. So I've been working with a lot of interns, and I asked them all the same thing. They're all just about to graduate from university and good universities here in Thailand, ask them same thing. What one skill do you have that could benefit me or my business? You know, could you do? Are you good at Facebook ads? Are you good at writing? Are you good at analyzing? Are you good at research, and the fact is, I would say 95% of them have no skill. They have general knowledge, and almost no skills. So what you're, you know, bringing pride back to people that may not have a degree, but have a skill is awesome. And that's the second thing that I like about what you're doing.

Jonaed Iqbal 06:18
Yeah, it's all about the skills because I mean, you're in an industry right in the US where it's like, good luck getting in without a degree. And I'm not against people getting degrees, I'm just against requiring it because they're playing some smart people in finance, like one of the things I really want to push for is if someone can pass the CFA without getting a degree, I would argue that they're smarter than their degree counterparts, because there are people who go to school, and they can't pass the CFA. So what does that say? Like, what's, what's the point of all that school? If you can't take the exam, right? and pass it?

Andrew Stotz 06:50
Yeah, in fact, that's a great point, I think, whether it's employers or you know, Institute's like CFA as an example, maybe we're just lazy. And we just say, Oh, well, a degree is just kind of a cutoff point.

Jonaed Iqbal 07:02
Yeah, they don't want to repeat, they don't want to take the time to invest. Because to recruit good people, you have to spend time knowing them, right, you have to create a pipeline, you have to create ways of networking. And most employers just want to put an application put requirements and just say, and the other thing is, they want to be safe, like, Oh, this person went to Harvard, if they do bad, they're like, well, he went to Harvard, I didn't know he was gonna be bad. You know, you got to create programs to identify, you got to train people, you got to retain people. It takes work. So they a lot of employers want to take the easy way out.

Andrew Stotz 07:31
So let's just before we get into the question of the day, for those people, yeah, for those people that like what you're doing, what's the best way for them to keep in touch with you follow what you're doing? Yeah, so

Jonaed Iqbal 07:44
the best way, honestly, LinkedIn, that's where I post a lot of my content. So if you search a jenaya, JO and a Ed, you'll find me follow the podcast, I have a podcast where I interview people without college degrees and have them share their stories. So that's called the no degree podcast and you can find them on no degree.fm.

Andrew Stotz 08:01
Beautiful. Okay, so we'll put all that into the show notes. So you can just click on the show notes to go to any of those locations. And 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 circumstances leading up to it then tell us your story.

Jonaed Iqbal 08:23
So look, I'm gonna counter I did kind of know it was gonna go bad. I didn't think it was gonna be the worst. But I did go in right, as much as much risk as I take. I also know that I have an idea of what I'm getting myself into. So let's go into the backstory. This is I've followed crypto, you know, cryptocurrency for a while. I originally bought Bitcoin at 34 and a half dollars. Accidentally, right? A friend who's sort of into shady activities needed some money. He's like, Hey, I got some Bitcoin. I called my friend. I was like, Hey, he's selling some Bitcoin. It's like 34 bucks, whatever, let's buy and be bought 35 coins, so 17 and a half each, right? And that was during the first crash of Bitcoin. Fortunately, I saw the rise and I was like, well, this is going up too fast. It was going up like whatever. 40 bucks, you know, 50 bucks, 70 bucks. And I was like, Alright, I don't want to get too greedy, right? greed. Greed gets people. And at 120. We were trying to figure out how to sell but that was a time there was a lot of regulation. And it was there are a few exchanges. And we were trying to get rid of it. So we were trying to sell it for 121 exchange needed like a parent utility bill. We're like, Oh, we live with our parents. There's no utility bill in our name. And then we went to sell it back to our friend but he spent money on stuff. He's like I spent 5000 at the club, I don't have any money anymore. And then we made an account. And then we made the account like on a Friday we put the ID on Monday morning we saw that we were verified the price shot up to 260 out he's like should I saw I said let's sell and it crashed Three hours later. And that because I'm an investment genius just because by pure luck, pure luck, right? When you sell at the peak of anything, it's locked man, like, I'm not gonna lie and whatever that my $800 investment turned to 4k. I had to pay some credit card bills. I was like a student, I was a college student. And unfortunately, I couldn't reinvest anymore. That was when I first got into crypto. And then around December 2017, it started going through a boom. And I saw it rose a lot from like, summer months to December. And like falling cryptocurrency, I was like, Alright, I can invest a lot. And that time, you could buy on credit card, right? So I had decent amount of limits, I had, like, whatever 20 K, and I was like, I'm either gonna become like a millionaire, or I'm gonna lose some money. So I ended up doing 20 K. And it crashed, you know, in like a month or two, right? It like crashed. I had, I had several coins, two of them are basically shit coins. So in December 20, that was like the time where it was like, you know, there was a time you create an app and you people invest millions of dollars all the time you created a coin. And you just raised me like Icos, right, you got so much money back then. And you can even have like a copy and paste and white paper with like typos and half Pat half, whatever put together. And, yeah, so I bought two of them were shit coins. And I lost in like the portfolio tracker one was minus 99%. And the other ones had minus it rounded to 100 minus 100%. So it was like five k each and those coins. And, you know, so those were essentially worthless, the other ones went down, like minus 90%. And thankfully, one went down only like minus 66%. So I still had a little. And you know what it was like, one of those things where it's like, if I invested in the right coins, I would have had like 100% return right now. Like if I just put it in Bitcoin and the regular coin, or aetherium, I would have been up whatever, because at that price, it would have been around 18 to 20 k price of 50 K, so I would double my money. And it sucks because I was about to pull another move, buying 10 k ether on credit, and I would have been up to 100%. But I still remember. And that decision held me back for two years, right? Because it's what one of those things where it's like, when I went to quit my job that 20 k that credit card debt was holding me back. And you know, you pay interest over time. It's also like I said, right now I'm almost done with it. So I would have had like 15 to 20 k in savings, which I could have used for something else which I could have used to invest in crypto today and I would have been up. So the main thing I really learned from that was only invest what you can really afford to lose, right? I see a lot of people, they make these big moves. And ever since then it's like I you know, I still invest a little but I'm like, can I afford to lose this. And that's what really guides it. Even if I know I can hit it big. It's like, Alright, I'll put 500 into here because I know I can lose this. Because the other thing is I quit my job in December. I mean, August 2018, to pursue my business full time. And, you know, having that debt just made it harder, right? I there are some moves, I couldn't make some courses I couldn't buy. And literally anything is better than 99% loss, I would have been happy with the 50% loss. Right, even a 50% loss, I would have still recovered so much quicker from

Andrew Stotz 13:28
I think I think 100% or 99% loss is a pretty damning. At that point. It's

Jonaed Iqbal 13:34
a lesson. It's just a lesson. That's all Yeah,

Andrew Stotz 13:35
it's a it's a costly lesson. And let's just let's go through this, I want to ask you more questions about your lesson that you learn because the it's easy to say, don't invest what you can't lose. But I'd like to kind of define that a little bit. Because some of the wow, you know, I mean, I can lose, you know, and I'm young or I'm this or that or I can lose what's on my credit card, or I can lose it to my bank or what what does it mean, for the person out there? I

Jonaed Iqbal 14:05
mean, let's, let's define it. I think it's what can you afford to lose and go to sleep at night without worrying? Right? Because it's like, let's say you lost a week's paycheck. Not a big deal. But how long would it take you to recover from that loss? That's really the big thing, right? If it's gonna be for me, it's like, since I quit my job, right? Even if I was working, paying off 20 k takes a good amount of time, right? If I had a salary of 20 k a month, right, even let's say it would take two months after taxes, let's say to pay it off if I if I were cheap with my money, but for me, it's like 20 k at that point, let's say what else I'm making like 70 to 80 K, that's like 25% of my yearly salary. And then what a lot of people don't get is 25% of your gross salary is probably like closer to like 40 to 50% after taxes. So that's like six months of income. Now, six months of income. It depends on your saving. If you have like Three to five years of expensive saves, losing six months sucks. But you can recover from so I think it's like how long does it take you to recover from it because it depends on your financial habits. If I had kids that would have been, thankfully I was young. So that is a good point that if you're younger, you can take the risk. But also, you got to think that I lost out on an investment opportunity the following year and a half. So it's it's kind of those things that you really have to think about. So I kind of think about it's Think about your income generating abilities. And that really has a big impact. And your savings that you currently have also has an impact on what you can afford to lose. So I think when you lose money, you have to be able to like kind of live without it. Like it didn't happen like a little dent, right? You can afford like someone pinching you, you can't afford someone like stabbing you in the hospital.

Andrew Stotz 15:50
It makes me think about you know, credit cards as an example, imagine someone that doesn't have a lot of savings, they got a job. So they're making an income, but they don't have a lot of savings. And they have $20,000 credit line. Well, if you're making $200,000 a year, okay, maybe that's not such a bad thing. But if you're making $40,000 a year, yeah, and you got a $20,000 credit line. If it's interesting to imagine, let's just do a thought experiment. Imagine that we could do a survey of everybody who has invested in crypto in the US over the last, you know, two years, maybe five years. That's it, we can ask everyone, let's just say that's a 10 million people. What percent of them use their credit card? to, you know, borrow from their credit card to buy?

Jonaed Iqbal 16:41
Credit under How many? Well, you know, it's at least point one for me, right? So one person right here,

Andrew Stotz 16:47
I suspect, you know, that the bright shiny object syndrome of you know, something going up like that, as kryptos been going up is so powerful. That I would say, I wouldn't, I wouldn't be able to guess you know, I don't know, 510 20%,

Jonaed Iqbal 17:01
I would say at least 20 have dipped into because and it's even among that a lot of people had dipped into life savings, because I've read about people who mortgages, right? They took it they took out cash advances and all that. But some people and again, it's all timing, some people made out big and then some people, right, unfortunately killed themselves, right? Because they were on the wrong side.

Andrew Stotz 17:23
But a listener this could stay on tonight, you just lost so you know, you just sour grapes. I made money. I'm gonna look at my friend, he bought a new car. How do we think about it? When we're seeing people making money, and they do, you know, leverage on their credit card and they paid it off? And you see that winner? Yeah, what does noise

Jonaed Iqbal 17:45
survivorship bias This is something a lot of people don't realize, like, I'm going to give an extreme example, let's say 10 people jump off a bridge, one of them survives, are you going to say, hey, look, that one guy survived. It's all good. It's, you know, it's like the rest of them died. And then you know that one person goes around and says, I can teach you how to jump off a bridge. You know, that's a book.

Andrew Stotz 18:03
I survived. I saw how the other ones are dead. books on selling. I'm a survivor.

Jonaed Iqbal 18:10
Yeah. And then they'll tell you all the technique and what they did. But really, it's just they're making stuff up. They just happen to succeed. And they got lucky. And the fact is, it's, do you want to be those other nine? You want to be? And then the fact is, it's like, instead of jumping off the bridge, just chip off three steps, right? You don't do that. So it's like, if you fall, you're okay, you're not injured, you're not that don't take those huge leaps. It's just not worth it unless you have a parachute unless you have a safety net unless you have all these other things.

Andrew Stotz 18:39
Yeah. I mean, I think if I look at kind of how I would summarize, you know, what I took away from your story. The first thing is this idea that the way I've said it now is kind of as a financial professional, I've said in the past, I would say crypto is just too risky. For the typical person. Yeah, but now I've stopped saying that. And I say now, go ahead, buy crypto, but I would consider it between zero and 3% of your total assets. Yeah. And start with that. And then from there, you know, you may decide to get bigger and better. Now, of course, there's some people that are going to spend all their lives trading crypto behind a computer all day long. You know, I'm not talking to that person, you know, have fun, do whatever. But for the typical person, I no longer say don't buy it, I would just say and I would probably say to be safe probably just buy bitcoin. And if you really wanted to do it another way you could say buy bitcoin with 80% of your money for the other 20% or let's say 70%. For the other 30% you split it between the three highest market value coins. So if it was ripple, if it was ripple, and it was the highest value but then crashed sell it when the next one becomes a higher value. No, I

Jonaed Iqbal 20:00
think that's good. And you know, it's funny. The position that I lost the least on was ripple. And you know, it's funny, but I did one move, right? So I ripple was that it went, it went up again, it was like at 27 cents, it went up to 60 cents. And then ether is another coin aetherium, whatever. And I was talking to my friend, I was like, I'm thinking that, at that point, I was like, I'm gonna convert everything I have, it was like 1000 bucks. That's my tonight 18 to 20 k 10 to 1000 bucks. I was like, I'm gonna convert everything to ripple. And he was like, I, I mean, aetherium. And he's like, now I think ripple. Next day, they got sued by the SEC, and I lost the 66 cents. And then after that, I was like, screw it, I put everything into aetherium. That was the smartest move, because now in theory went up. But stick to the bigger coins and even diversify among the bigger coins. It's like, you know, because regulations really impact the prices, right? If you want to become super regulated, and it always looks like it's gonna go that way. You can easily lose 50% overnight, right? 50% is just a normal crypto move.

Andrew Stotz 21:04
Yep. So a lot of good lessons here. In fact, I advise a cryptocurrency exchange here in Thailand, and, you know, help them to stay, you know, on the right side of regulation and all that. And regulation is very tough, you know? So, all right, based upon what you learn from this story, and what you continue to learn, what what action would you recommend our listeners take to avoid suffering the same fate?

Jonaed Iqbal 21:29
Be careful, and sleep on it. And think about if you lost and it didn't go your way? How would life be? Right? It? I think you got to think about that. Because so many times we think about the Lamborghini, we're thinking about, we're gonna do this, we think about the positives. How would life be if it didn't go the way you know, can you handle a 50% loss? Can you handle a 90%? loss? Can you handle 100% loss? Because 2020 has shown that, who knows, right? You've had people who are very successful in certain endeavors, and then whole industries wipe out. So it's like, you got to think about these things. So think about that. And if you can handle the 50% loss scenario, good if you can be hurt, but be okay. 100% down, then. Okay, go ahead. But you got to think about like that.

Andrew Stotz 22:16
And to assist the listeners out there, I'll add two things. First of all, the first thing is that what you're, what you're also talking about is the concept of sizing a position. In the investment world, we call it sizing and position. And just keep the sizing low, until you know you get more experienced and all that many people jump into things. But the second thing that we know from behavioral finance, and just behavioral economics is that, write it down. What would life be like? Let's just take tonight's advice, what would life be like if I lost all the money, I invested into crypto, write that down on a blank piece of paper, and just write down a few bullets. And if you do that, it will really help you to visualize it. And then it may help you with your sizing decision.

Jonaed Iqbal 23:06
Yeah, and that's what I did a few weeks ago, because I was like, I could spend 10 K. And I was like, Look, if I lost what's gonna happen? And I was like, I can't afford to help hold myself back another few whatever X number of months to recover?

Andrew Stotz 23:20
Yeah, I think the last thing I would also add is just the fact that for the majority of people in this world, wealth is created through business. Yeah, not to the stock market, or this type of what I would call, you know, investment, but wealth is created through business. Alright, last question. What's your number one goal for the next 12 months?

Jonaed Iqbal 23:40
I think I'll how I'm gonna cheat, I have two goals. So the two goals are to grow my podcast listenership base. So I want to get some very interesting guests, I hopefully I want to get some like people. I've had some interesting guests like I've had a UFC fighter, Demetrius Johnson, I've had some SEO, so just to kind of get bigger podcast guests, and also increase the traffic to my website, because I have a decent amount of content 10, but I want to produce more content. So rank higher SEO wise, and rank higher podcasts. That's really the goal for the next 12 months, and you pay off the credit cards that I'm still recovering from exactly from a few years ago, but I'm gonna definitely pay that off in the next few months.

Andrew Stotz 24:20
So I'd like to reach out to the listeners and ask you Do you know someone who has achieved in their life without a college degree? If you know someone who's impressive and could be a good power of example, why don't you reach out to janai through the show notes or through LinkedIn, and introduce that person, and maybe that person could tell a compelling story?

Jonaed Iqbal 24:46
Yeah, I'd love to hear it and share it.

Andrew Stotz 24:49
Beautiful. All right, listeners. There you have it another story of loss to keep you winning. Remember, to reduce your risk in life, go to my worst investment ever.com Right now and download that risk reduction checklist that I made specifically for you. Coming from what I've learned from all my guests and see how you measure up. As we conclude tonight, I want to thank you again for coming on the show and on behalf of a stats Academy, I hereby award you alumni status returning your worst investment ever into your best teaching moment. Do you have any parting words for the audience? Yeah, don't

Jonaed Iqbal 25:25
make the same mistake I did. Because crypto is hot right now. So be careful.

Andrew Stotz 25:31
And I can't summarize better what this podcast is all about. Don't make the same mistake. I and that's a wrap on another great story to help us create, grow and most importantly protect our well fellow risk takers. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.