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How To Use The Inversion Technique To Succeed In Finance



Charlie Munger, one of the world’s savviest investors, recommends mathematical inversion as an all-around problem-solver in life and finance. It’s Charlie’s not-so-secret process that turns problems into solutions — a keen skill for the Vice Chairman of Berkshire Hathaway.

Inversion takes a problem, flips it upside down, and runs it forwards and backwards until the solution spills out in front of you. As Charlie’s partner, Warren Buffett, said, it’s “like singing country western songs backward. That way you can get your house back, your auto back, your wife back, and so forth.”

Inversion turns bad things into good things.

For a real life example, take the State Lottery. It’s unquestionably the worst government program ever, bringing unfounded hope and endless disappointment to our poorest citizens, even if the profits end up in State coffers. How could we turn the State Lottery from the worst government program to the best?

Invert it. First, make it involuntary and assign everyone a number, rich or poor. Reduce the prize money to reasonable amounts. Delay the drawing until every player is old or sick. Make every player a winner, not just one lucky soul who might well be destroyed by the windfall.

What you get: Social Security, the government program hardly anyone hates.

If inversion still isn’t clear, let’s go to the movies. In the beloved classic It’s A Wonderful Life, selfless, tempest-tossed George Bailey is saved from suicide by guardian angel Clarence, the heavenly clockmaker.

Simple but rational Clarence just inverts George’s life: “You’ve been given a great gift, George. The chance to see what the world would be like without you.”

George is horrified by the misery he finds for friends and family in a George-less world, and begs to return to his former life. Everyone he ever helped rushes in to repay him.

Here are four ways you can use inversion to help your financial future:

Invert the thrill of individual action into the power of mass action.

As individual humans, we evolved to like and enjoy other individual humans. Our most popular war movies—Star Wars and Casablanca—are really not about massed armies at war, but the character and actions of a few individuals caught up in war.

Just as we prefer individuals to the mass of humanity, we prefer individual stocks to the broad market. People love to pick their own stocks. But as Humphrey Bogart says at the close of Casablanca, individuals “don’t amount to a hill of beans in this crazy world.” Most individual stocks don’t, either.

Quit focusing on individual stocks. Accepting the counter-intuitive wisdom of diversification will protect the bulk of your portfolio from ruin, and assure your fair share of market gains.

No one would make a movie about low-cost index funds, but they work. Even the best hedge funds are “closet indexers!” The S&P 500 returned 10% for the past fifty years. Have you?

Invert the delight in risk into the security of making a safe bet.

James Bond and Indiana Jones take awesome risks, win their bad bets all the time, and earn our undying love and admiration. Nature leads us to admire and emulate risk-takers. Risk-taking may benefit humankind, but not the individual taking the risk.

That’s why so many portfolios crash or never even get off the ground. As the Wall Street maxim goes, “There are bold investors and old investors, but no old, bold investors.” Invert that primal urge for risky bets and seek the best bet, not the worst.

No one would write a song about the heroes of compound interest and long-term investing, but that’s where the money is. And it’s money we’re after, not just adrenaline.

Invert the urge to keep betting and keep trading into thinking long-term.

“Place your bets, ladies and gentlemen!” cries the croupier. But the croupier serves the house — and the house wants you to bet again and again. Why not? The odds are in their favor: the more you bet, the more you lose to the house.

Since the 17th century, we’ve known that frequent stock trading leads to investor losses. The only ones to get rich from frequent trading are the financial industry and the pundits who encourage it.

Charlie Munger says this about betting: “To me it’s obvious the winner has to bet very selectively.  It’s been obvious to me since very early in life. I don’t know why it’s not obvious to very many other people.”

It’s not obvious because we are not evolved to think long-term, but to peck at a lever like a trained pigeon. Instead, invert: Bet rarely, and only when the odds are with you.

Invert the bad into the good: Vice into virtue, gambling into investing.

Remember: Gambling is a vice. Like “smoking, drinking, never thinking of tomorrow,” as the Duke Ellington and Michael Parrish lyrics for “Sophisticated Lady” go. Gambling is making bad bets in the mathematically unlikely hope of a big win.

The more bad bets you make, the more likely you’ll lose your fortune and your future. Give up gambling, and invest instead. Stick to the good bets and the sure bets. Build virtue instead of vice. Isn’t that what you really wanted to do all along?

Like many simple concepts, inversion can evade your common sense until you absorb it and practice it. Then, like riding a bike, the skill never leaves you. How often should you invert? Carl Jacobi, the 19th-century German mathematician who invented inversion, loved to preach, “Invert, always invert! [Man muss immer verkehren!]” Invert all the time.

Gift it to others and it will keep right on giving to you. Just thank Carl and Charlie. In German, you can thank them both at once: they’re both Carls.

This article originally appeared on ValueWalk. Follow ValueWalk on Twitter, Instagram and Facebook.


How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀



I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.

I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.

(Real estate—our TEMPLE I and TEMPLE II projects included—has a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)

There’s the 1031 exchange, of course, which I’ve shared with you guys before. 

Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.

But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.

So I thought I’d share it with you guys. 💎

You can check it out here.

Let me know what you think. 😎

PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. 👀
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.

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How I run a $300M+ business from the beach…(and how you can TOO!)



Yes, you read that right.

If there’s anything the pandemic taught us, it’s that the paradigm of “office” and “workspace” has been shaken to its CORE.

Universities are teaching via Zoom, court dates are done virtually, FULLY REMOTE businesses are valued at $1B+, and legitimate Inc. 5000 startups are run from…wherever. 📲

This is my office for the day…

I am actually running our business from the beach, typing this from here.

It’s 4:28 pm CET, which means it’s 10:28 am EST and I am CRUSHING my to-do list.

(And the team will continue to crush it while I’m asleep. That’s the 🗝)

So how did we get here? 

We launched NYCE and our mission to create 100,000 millionaires in March, 2020…just as the global COVID-19 lockdown happened. 😳

As a result, we shut down our main office and set EVERYTHING up to run remotely…

SMOOTHLY! And a system that allows us to outperform competition by 200%. (You can build this system, too. More on this in a second.)

Here’s what we were able to do since then:

  • Gained 6M+ followers across all platforms 📈
  • Add 1500+ new apartments to the portfolio 🤑
  • Grow to $300M in real estate 🚀
  • 105% investor returns 🎉
  • 700K+ community members 🤝

And here’s the best part…

Having team members in all the main time zones gives us a 24-hour work cycle vs. 9-5/eight-hour on-the-clock performance.

This means we get 3x the productivity of a similar company. 🔥

Let me repeat that…3x PRODUCTIVITY vs. our competitors.

Meanwhile our project management software grants us 24-hour TEAM-WIDE connectivity that tracks all tasks and lets us know if productivity dips even a little bit.

There is ALWAYS someone senior awake. It could be Martin in Barcelona…Nat in New York…Vineet & Arif in New Delhi.

All the while giving YOU GUYS wealth hacks and daily content. 🔥

OK, so how can you do it?!

Well, the first step is to have an actual side hustle you’re launching. Not just an idea, a validated business.

MAJOR KEY: Do NOT spend money until you’ve made your FIRST DOLLAR! 🗝🗝🗝🗝

(You can catch a replay Business Launch masterclass here and see TRIBE member Nessa launched her business on the spot and got her first $45K client shortly after.)

One of the easiest ways to start is with Airbnb—you can start that in 10 minutes. Literally. (Here’s a guide if you need it.)

Once you have your business, you build a virtual infrastructure (you really just need two softwares, which are FREE), manage the team accordingly and run the business from there.

I’m gonna put together a step-by-step video breakdown this weekend inside the new TRIBE U on the FIVE key things you need to do this for YOURSELF. 💵 💎

From what software to use, how to build a team, how to keep.

In the meantime, drop a comment if you’re ready to build some wealth and any questions if you want more…

Let’s get to work. 🙌

PS: If you can’t be bothered with video and just wanna get to work, we’re hosting a TRIBE U workshop that will help you get this process started on the spot. It’s $479 $49. 🔥

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CHART: How Blockchain Powers Bitcoin



Blockchain, Bitcoin. Bitcoin, blockchain.

The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.

But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.

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