Ep467: Marvin Germo – Focus On Things That Bring You Cash Flow

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. My mission is to reduce risk in your life. Your mission should you choose to accept it is to pause this episode right now and go to my worst investment ever.com. To take the risk exposure quiz I created from the lessons I've learned from all my guests. It's time to learn how exposed you are to risk in your life and how to reduce it. Fellow risk takers this is your worst podcast hose Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, Marvin Girma and he is about to join our mission to help 1 million people reduce risk in their lives. Marvin, do you accept this mission? And are you ready to rock? I accept that I give up. Well, let me tell the audience a bit about you. So Marvin is a stock market trader, entrepreneur, best selling book author, international keynote speaker, brand, influencer and personal financial consultant, who is among one of the most passionate personal finance experts in the Philippines. Ladies and gentlemen, if you just go to his website, Marvin jomo.com, or his YouTube, same name, you're going to see that passion Martin Martin, will you take a minute and fill in for tidbits about your life?

Marvin Germo 01:34
Well, but first of all, thank you so much for inviting me, it's always an honor to be in the great Andrews start to show so um, I would I want to I want to begin with with this that I grew up, not really in the finance field, I took up engineering, it was way far from what I am doing right now. But I realized while I was working first two weeks of working, I got exposed to so many books on business and investing that I realized that employment wasn't for me. But I wasn't. I wasn't the type of person that when I wanted to do something, I would jump the gun right away, reside and then do my own thing. It took me five years of living simple, I'm creating a lot of side hustles. Then when those side hustles are in, I've started to learn more on how I can make them grow and invested. So that's my journey. And then somewhere around 2007, I started investing in equity funds, equity face mutual funds, and I started to like it. And as I started to like it, I was watching it almost every day, then I figured out hmm, if I'm watching this every day, why not try to jump in and look at the Philippine Philippine stock market and buy individual stocks as well. And as I started to research, the 2008 crash happened. And I was pretty much influenced by Warren Buffett at that time. And it didn't make sense. I was looking at it. The recession was in the US. Why did Philippine stocks drop 50%? When they seem to be doing so? Well, it didn't make sense to me. And I was thinking that I was in my early 20s. At that time, 20 to 23 years old, I was thinking that if I'm wrong at this, if I invest in these companies that are good, that are durable, and I make a mistake, the worst thing that could happen is I'll still be employed, I still have cash flow, and actually tried it. And at that time frame I was in my 20s, I was thinking that if I do this up until 60. And if I'm wrong for the next 10 years, it really doesn't matter. And as I got into like The Matrix, I got into a rabbit hole where once you take the other pill, you will be sucked into it. And I just fell in love with it. And looking at it from hindsight now, I think it was something that I really wanted. Because you can start your own business, which is great and amazing. But I'm not the type of person who likes to operate. Like for example, if you're my, you're my employee, if you don't meet your quota, I'll be like the person that it's okay. As long as we're having fun as long as we're continually pushing on. It sounds good. But the business would close down if I'm that if I'm that person leading it. So it fit me very well because I have no one to compete with. But myself if I make a mistake, it's on me. I don't have to do customer service. I don't have to do sales, I don't have to do marketing, and through enough where we are right now. 2021 in the pandemic, I get to just stay at home and still do what I do because everything in the realm of investing right now is online as well. So that's pretty much me.

Andrew Stotz 04:44
That's very inspiring. I know a lot of engineers are listening to this show and people who are professionals, architects, engineers and others that are fascinated by the markets and you really can. Number one, you can take advantage of the markets if you're in those positions because you're making some cash flow every single month because you making good money. But also, you know, plenty of them want to trance transition into working in the industry. And you're a great example of how that can be done. And let me ask you, the other question I wanted to understand is, what are you trying to do with your YouTube channel? And why did you know tell us like, why you started and what you're trying to get across in your YouTube channel? Hmm.

Marvin Germo 05:21
So who actually started that channel 2010 2011 2012. It was normally most of my TV interviews, I'd upload them there, just to a repository. And then if people had questions, it made it easy for me to be able to send it to them, or just watch, just watch this, that, um, it all started somewhere around 2018. Me and my wife, we had a trip to Iceland, and we wanted to take the Northern Lights, we wanted to shoot it. So you need a very, very nice camera to be able to get that. So when I was trying to think about what camera to buy, I was I was thinking, why not buy also a camera that I can use for vlogging or at least share my thoughts. So when I got that, no edit at all, I will just share my thoughts right there. And it was so amazing, it was so liberating. Because if you get interviewed for a TV network here, you'd have to travel three minutes, an hour for 15 minutes, then go back. But when you do it in YouTube, at your own terms at your own time, at your own pace, you get to convey what you want, when you want and it's not restricted to how long it gets done. So I'm really a talkative person. And the hardest part for me is to stop talking. And I guess it was just a good fit of about me conveying my thoughts and ideas and the having a platform to be able to do that and amplify it to the rest of the world as well.

Andrew Stotz 06:48
And for the listeners who want to, you know, they like watching YouTube and they have their favorite channels, what would they gain from your from going and watching some of your videos? What is the area the What are you trying to get across them?

Marvin Germo 07:01
Hmm. So there's so many channels in YouTube, but I kind of dip across different things that I'm interested in. So for those who are who watched the older ones, it was pretty much 5050 equity, then I transitioned it's not just Philippine equity anymore US stocks and I started to dabble into cryptocurrency. So it's a bit of those. But in my opinion, it's not tips, it's not what stopped by it's mostly principles, it's mostly things that you can make them play the ball also for for yourself. So that's the whole goal of that. I am sure your Skype that this is not about giving people fish, but teaching them how to fish as well. And then some thoughts on the market in general as well.

Andrew Stotz 07:45
Exciting. And I mean, you've got a great following. And I just want to ask one last question before we get into the meat of the interview. And that is for a young man or woman out there who's listening this, you know, they look at your channel and they say, Wow, you've really accomplished a lot. And they're just starting out. What one piece of advice would you give someone who's starting out trying to create a YouTube channel and you know, get people to listen to them and get people to follow them?

Marvin Germo 08:13
Hmm. One second. So my answer to that is this a post something that you really, really, really like that you can't stop talking about it, it doesn't matter if it's golf, if it's basketball, if it's finance, if it's Pokemon cards, it doesn't matter, it has to be something that you can't stop talking about it because it will come out naturally, that you don't have to force yourself to do it. Because I see a lot of people that they start this channel, I'll do this podcast, but they're in it because of maybe the benefits of it, or maybe they want it, but it's not something that's real and alive to them. So start something that you like something that you are passionate about. And I'll say this, people always say quality over quantity in when you're starting out, do quantity over quality first, not because why do I say that? Because quality is subjective. And I've posted videos have no edits at all, but people watch them because that's my audience. And they're not really there for the glamorous edits or the landscape effects. They're there for what information that they could actually get. So having quantity allows you to know what content, what piece would people actually want to hear? Because you will have different audiences already. So from there, you'll see oh, this video is having a lot of use then make more of that. No, that's my suggestion.

Andrew Stotz 09:40
Fantastic. Well, that's really interesting, you know, quantity over quality. And then you know, quality will come or maybe not you don't have this amazing, you know, podcasters out there. All they do is just talk that's all you know,

Marvin Germo 09:53
but just interject what's interesting about that because you've done it so much you've done so much quantity, you'll get good at it. If you can't help get quality, yeah, because you've done it so many times 10,000 hours of trying to be good at something, you'll be better, you might not be conscious about it. But given the time and effort that you've spent practicing just one thing, you'll be so good at it. Also,

Andrew Stotz 10:18
great advice. And I think the other thing that you didn't, really, that I would say, I guess, about your channel and about you is that people come for your information, but they also come for your passion and your energy. And you have it, you've got a great smile, and you've got your passion and your energy. So that's fantastic. And now it's time to share your worst investment ever. And since no one 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.

Marvin Germo 10:46
Okay, um, when I heard about this concept, oh, no, I, I was sort of struggling also to think about, was there anything that hit my finances very hard. And, of course, mistakes are made, I had made so many mistakes, especially in investing. But there wasn't really something that hit my finances very, very hard. But allow me to backtrack on the reason on why that happened. So 18 years ago, my dad was a top management, top executive in one of the biggest pharma companies in the world. And that pharma company merged with another pharma company. And to make the long story short, he was given an early retirement. So as he was given an early retirement, like I don't know the culture in other countries, but in the Philippines, when you start earning more, just keep spending, and that has been his cycle. And he had, he was using credit cards this whole time. So when he was given an early retirement, given that he had a high position, and he was in the company for a long time, he got a very, very large lump sum. However, having that large lump sum, without having any cash flow coming in, the prudent thing that he wanted to do was okay, I'll start a business. But the thing about that was, he had a large amount of money, no experience and no skill. Looking at it from hindsight, it was a very, very bad proposition. Because if you have if all you have is money, but no skill and experience, you lose the money, you gain the skill and experience after but you, you lose the money while everything is going on. So we were distributing napkins, sanitary napkins, he was one of us sold, we were so distributors of that. And he also had their gas station, and then several other small businesses, to make the long story short, because it was not studied well. He lost everything. And I was in college at that time about to graduate. So that was a turning point in my life that I said, if I'm going to do something, I'm going to invest in something. Or if I'm going to make mistakes, I'm not going to do it. At the latter stage of my life, when there's a lot on the line, I'm not going to do it also, with a large amount of money mean no, not knowing anything. And that's why I start everything that I did even up until now. I'm doing it. Gradually, I always start small. I always try to cover my cover my bases covered my bases. First, as far as mentioned at the start of the podcast that I would do side hustles. And I primarily did though side businesses not to earn I was looking at, I wanted to learn from this, because if I learned from this, I would figure out is this something that I can scale later on when they have more money? Is this something that I enjoy doing also, and then I'll just make it bigger. If I earn then that's a bonus. And I don't have to figure things out later on in my life. So that being said, though, the mistakes that my parents made their finances allowed me to become more conservative when I was starting out, because looking at it from a portfolio perspective, people who say that don't don't keep cash don't give up because it's the because the number of dollars that have been printing out, it's losing value, but I kinda like having cash, because it's my buffer, it's it allows me to make those mistakes. Having that buffer that if nothing comes in, if none of the investments come in, none of the businesses would generate anything for me as long as I have that buffer. I am okay. So I'm conservative that way. And even in any investment that I would get into, I would make sure that it's their money coming in. If I have that, is it something that's manageable? Or is it that do an asset, then, do I have enough cash that if this doesn't go my way, but just to answer it also directly in terms of mistakes and investment. I remember when I was starting out in the stock market, and I don't know if a lot of your listeners would connect to this but when you don't know a lot, it's easy to listen to your friends. So there was one. There was a friend that told me oh, let's buy this stock, it's gonna, it's gonna do well. And at that time, that was around 2009, just after the crash, there were a lot of Philippine stocks that were ridiculously cheap. But it wasn't going as fast as the stock that he actually bought. So the stock went from like 12 to 15, in a couple of days that it went to 24. So I saw him double his money. And he was my office mate at that time. What's interesting about him was, he was borrowing money from all of his, all of our office mates to add to his position. And at that time, I was relatively new. And I said, Wow, what conviction he has in it, why would he borrow money for other people to give to give him and invest into it. So the stock went to around 32. This isn't Philippine pesos, then it dropped to 25. So I was actually taking room, it started to correct despite the fact that this might be my opportunity, then I went to my friend, and he told me, it's gonna go, it's gonna go to 50, it's gonna go to 50. So even if you buy the 25, he didn't come in at 12 usually still have a chance to double your money. So at the end of 2009, somewhere around December, I accumulated around 24 to 26. Then two months after the stock crash to seven, in, when it crashed to 17, I went back to my friend, what are we going to do now? He said more, you say, he said, bye. He said, think about it, if you buy now at 17, if it goes back to 2425, you won't just break even, she will, you will, you'll still make money. And if it goes to 50, you will actually make more. So I added, and like anyone who lost money, once you start losing money, that's when you take it seriously and you study. And when I started to study is, this doesn't make sense. This is from him from even a technical and fundamental point of view, I don't think I should be in this. So ultimately, I sold the half at 16, then I sold half at 13. It may sound like a loss. But when I look back at it in 2015, the stock hit one. So it selling at a loss at 13 Wasn't so bad, as compared to looking at the drop to drop more than 90 plus percent in, in over in over a decade. And fast forward to where we are now. It's nowhere near the heights of where it was when my friend offered it to me as well. So

Andrew Stotz 17:39
and so let's take these two different stories that you've told kind of the story of your youth and your father's circumstances and how that shaped your way of investing and also take this particular individual story. And let me I'd love to hear how you would describe the lessons that you learn from both of these experiences.

Marvin Germo 18:02
Um, there's so much to unpack No, I'm number one in, in my, in my father's story. People always want to get rich in the next eight minutes. But what they don't realize is wealth is something that's built over time. People always think that when I have the capital, that's when I'll start the business. When I have the capital, that's when I'll start investing. I always tell people don't, don't invest when the big money comes in. Start with whatever you have right now. Because the ROI of any investment is in whose hand is it one? Meaning you may have a lot of money but you don't know anything about it. You don't have the experience for it. Are you lose money and true enough? My business was a gas station, it's something it's an essential. It's an essential business, especially where he started to put it. But if it's not run, well, you don't know anything about you loose. So key takeaway for me that helped me when I started out was I just wanted to start as early as I can. I wanted to take as much risk as they got while I was younger, they wanted to start with the money that I had. I'm not a big fan of that. I know in fact, in finance, that is something that's very, very important. But what allows me to take a lot of risk right now is the money that I'm putting in is all mine, that I'm not scared that if even if it goes to zero, I don't owe anyone so even in the world of 3d people do shorts people do leverage I don't do any any of that because I want to take risks, but I want it to be my own money. What's the story with my friend? What's funny about this, Andrew is that I already knew about fundamental analysis that is a big word Buffett fan but the investing is not just about information and principles. It's also about emotions. And when you see your friend making money and your positions are slow. If you get them to do, I guess a couple of things is that for those who are listening to this, when you're investing, or just focus on your own race, you don't have to compare your gains with what other people are doing. Because you have different starting points at different capital, different risk tolerances, different timelines as well. And it doesn't make sense to compare yourself with what other people are actually doing. And know. And very, very important. Before you buy anything, it's so important to know what it is what how much you should put in how to exit properly, what if it doesn't go the way you wanted to go. And, those scenarios. What I forgot to mention, though, was, since I was also conservative, in terms of with my dad's history, even though I made a lot of I, that was a huge mistake. But because I balance the My Portfolio properly, it really didn't hit me also in a way that it was easy, it was easy to recover from

Andrew Stotz 20:59
there, got it. I wrote down a lot of stuff as you were talking. And the first thing is, I just want to talk about, you know, your father's, maybe I'll share a few things that I take away from your stories, you know, your father was a manager or an employee, just like my father, he was a company, man. And sometimes what we find is that a company man may not have the entrepreneurial skills, they're doing a role in a company. And, in fact, I think you could argue that a tiny percent of people in the world really are entrepreneurial. You know, they're the entrepreneurs, that most people struggle to be an entrepreneur, because it's just so many different things that they have to deal with. And it reminds me of the book, Rich Dad, Poor Dad. And as we know, in that book, I always tell people that this is a terrible book, for advice, on investing, and on finance. And I think it's a bit shocking, because it's such a big selling book, and I've read it, everybody's read it. But the rich dad was the entrepreneur, and the poor dad was a salary man, like your dad and my dad who did successful, you know, in their job. But the problem is that in order to follow the guidance of that book, the guidance really is be an entrepreneur, make your money work for you, like the rich dad. But if we know that only a tiny percent of people are really suitable to be an entrepreneur, it's actually bad advice for the majority of people. And that's one thing that you made me think about, the second thing I'm thinking about is, you know, you really focus on cash flow. And I think that's really good. And it's a good lesson for the listeners out there . It wasn't like you, you, you were trying to build up some kind of nest egg, you were working and generating cash flow, you were thinking about businesses that could generate you cash flow. And I always tell people in my world, which is basically create, grow and protect wealth, create wealth, through either business or our job. If we get a salary of 100,000. And we spend 80,000, we've got 20,000, of wealth creation that we made that month, that is creating wealth. Now you could say, Okay, I want to be an entrepreneur, fine. But you know that that's a much bigger, complicated, more complicated thing. But if you can get a good salary and keep your costs low, you are generating well. So think of your cash flow is that the other thing is, you know, talking about the story about your friend, it's so easy to get impressed by people who are really confident. They're really, and it's going out right now, you know, and, and it happens all the times in the world of finance. And I hear it all the time. Yeah, but but but my friends making money on this stock, and this guy's got that. But truth is, is that, you know, most of the time, just being confident about something isn't enough, most of the time people are winning in the stock market, the average person's probably winning most of the time through luck, not through skill, and therefore, when luck turns, they get hurt. So part of what I'm trying to do with this podcast is to help people look at all the people that have lost money and lost in different ways, and to try to build up those skills. And then the last thing is, you said something that I want to really hone in on you talked about debt in the world of finance. And in finance theory, we're taught that debt is valuable, we can add more debt to our balance sheet. And the more debt we add until a certain point, the more that we reduce the cost of capital, and that adds value to the business. But I would argue that after living through 30 years of business up and downs, I would say, that is not nearly as significant as what finance people like to say. And from a company perspective, I said if a company set a goal of having zero debt, only cash or only 10% debt or maybe 20% debt, compared to the equity in their business, nothing wrong with that. That is perfectly fine. So for those people out there that feel like they're being pushed into debt, don't feel that I had a lot I learned from your story. Is there anything you'd add to all that? Oh,

Marvin Germo 25:10
um, I think I guess I want to say this that. I don't know how it is in Thailand. But here in the Philippines, a lot of people are affected from the pandemic, and they think it's the worst ever, I guess I want to tell people that there's so much opportunity around it. There's, there's, there's, there's so much, and we just have to spend time finding what will work for us, because ultimately, what will work for me may not work for the ones that are listening to this. And if you are asking what's the best investment, then probably the biggest, the biggest thing that probably is going on is you haven't done your research yet. Because if you have you spent the time to read, research and actually learn or actually execute any of businesses or investments out there, you wouldn't be asking it anymore, you already would know where you would put your money. And what's so fascinating about this, this whole, this whole internet space has opened so many things where people could actually make money and people have been selling slime off the internet, something that people 30 years ago would never thought was actually possible. And what I'm saying is this, find something that you know that you can excel in that you know that your edge against everyone else, and try to double down on that try to learn it doesn't mean you won't make any mistakes. But it means that if you're enjoying you're having fun and you're learning in the process, you'll find your way to get better. But if it's really not it, it allows you already to figure it out early on, then you get to shift and pivot to the next thing that you want to do.

Andrew Stotz 26:56
Great. So based upon what you learn from your story, and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?

Marvin Germo 27:06
Well, um, start service now. Do your time to build wealth. Don't focus on making money in the next eight minutes focus on the next eight years. Because it's not, it's not a sprint. It's a marathon. And this is what I realized, Andrew, it's the boring things that will make you rich. It's the boring things that will I'll share this at the height of the pandemic. Philippine markets crashed similar to what's happening what happened around the world, but I'm a big dividend investor. And as long as I can I got my cash flow going in. I'm not scared. But no one wants to talk about dividends because it's boring. So there, find something that works for you, and double down on it and start now.

Andrew Stotz 27:55
So last question, what's your number one goal for the next 12 months?

Marvin Germo 27:59
Ah, I'm not sure if if this is something that you like, but I've been pretty deep in the cryptocurrency space. And I've been spending four hours each day just learning more about it. And it's similar to what I felt when I started investing in the stock market more than a decade ago. I think I'm in deep in the rabbit hole, that I love it so much. There's so much opportunity also in that particular space. So whatever I know right now, in Kryptos, I'm just gonna go deeper and deeper as we close the year as well.

Andrew Stotz 28:40
Fantastic. I think you've even made some videos about crypto and what you're learning and what you know, right? Yeah, fantastic. Well, listeners, there you have it another story of loss to keep you winning. Remember to go to my worst investment ever.com And take the risk exposure quiz. It's time to see how exposed you are to risk in your life and how to reduce it. As we conclude, Marvin, 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? Oh, um

Marvin Germo 29:18
or that's something I did expect. Ah. Godspeed to everyone. I hope that you guys are spend the rest of the year the next three months of the year, pushing strong, pushing hard and use the prime years of your life not wasting your time not wasting your money. Keep on keep on investing and keep on pushing forward.

Andrew Stotz 29:43
Fantastic. And that's a wrap on another great story to help us create, grow and protect our wealth. This podcast is about one person. One story one mission to help 1 million people reduce risk in their lives fellow risk takers. This is your worst podcast host Andrew Stotz. Sing I'll see you on the upside.