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#004 Fireside Fridays - LinkedIn Essentials, Cashflow Quadrant Insights & Luxury-Backpacking



Magic Monopoly Money

The stories I'll share in this and the upcoming newsletters pick up where my book, School Dropout, Chimney Sweep, Investment Banker:The Art of Pursuing Goals That Seem Unattainable at First Glance, ends. It's the epilogue that didn't get printed but happened in the chapters of real life.


I was excited as hell. It was just digital monopoly money within the demo account, but I was going to place my first trade. I watched the chart for a few seconds, and then I spotted a formation pictured in the trading book I rushed through yesterday. It seemed like an upward trend with higher highs and lower lows. The candle bar had just passed the former top and closed above, with the new candle rising strongly. I placed my trade, buying a fraction of the German DAX Index valued at 100 fictional dollars. That meant if the price of the index, aka all the underlying stocks comprising the index, went up in price, I would make money. Otherwise, I would lose money.


Eddy looked over my shoulder, waiting eagerly for my next move. Meanwhile, the price increased rapidly. The screen showed a large green candle getting longer and longer. I had already made a +8%. That meant I could sell my position for 108 and cash in 8 dollars in profit. Suddenly, the price tanked. The green candle reversed from its top and formed a long line with a small body that shrank rapidly. I watched the value of my position melting away. Within seconds, I went from 108 to 98, a 2% loss if I were to hit sell now.


A new candle formed. Unfortunately, it flashed red and plummeted like one of those cars from action movies that fell off a bridge and sank to the bottom of a lake. At first, I was playing it cool, thinking I could make my money back, but now with my position valued at 91 dollars, I panicked. I turned to Eddy. "What should I do?"


He took over. A few clicks later, he showed me the same chart but on a different time level. The former chart produced a new red or green candle every minute, but this one showed the candles on an hourly basis. "You need to get out immediately," Eddy said.

"What? But I'm down 15% already," I protested, looking at my position valued at only 85 dollars now.


"Look," he pointed at the chart, "this is called a shoulder-head-shoulder chart formation. Since it's forming on the higher timeframe (hourly chart), it will always beat the lower timeframe (minute chart). You'll probably lose way more if you don't close your position soon."


Hurried, I grabbed the mouse and hit the sell button. Shit. I was down 13 dollars in the end. It was a disaster. We kept watching the chart for a couple more minutes, and Eddy was right. I would have lost almost 25% had I kept the position. I was shattered but intrigued. If I could lose 25% in a couple of minutes, it could also work the other way around. I just have to get better...


1. Level Up Your Career Game: There is No Excuse for Not Having a LinkedIn Profile


LinkedIn is the most powerful tool for building a professional network out there. I interviewed with Morgan Stanley, UBS, Credit Suisse, and Meltwater, and LinkedIn helped me get a foot in the door at all of those companies. Here are my best practice guidelines that helped me the most and will assist you too:


#1 Sign Up!

You miss 100% of the shots you don't take.


#2 Get a high-quality profile picture.

Imagine a guy arriving at a networking event with a mask covering his face — weird, right? That's how a blank profile picture feels. Don't be that guy.


#3 Stand out with your profile banner.

A good profile banner piques the interest of the visitor and ideally describes your skills already. If you have absolutely no idea, get some inspiration from canva.com. Just search for "LinkedIn Banner".


#4 Your Profile is Your CV.

On LinkedIn, your profile resembles a detailed CV. You have an "About" section where you should provide a short and concise description of yourself. Include what makes you, as a person, interesting. Love backpacking and traveling the world? Mention it. Hiked Kilimanjaro? That's the place where it goes. You get the idea: make yourself stand out. Furthermore, fill out sections like "Experience", "Education", "Skills", etc., as detailed as possible. There's only one rule: if you list something, make it high-quality. You can have a look at my profile here: https://www.linkedin.com/in/kevin-schwarzinger/


#5 Network as if your career depends on it, because it does.

Before you get started, remember, don't be awkward. Act like a human being. You don't want to send a connection request to a complete stranger without introducing yourself. It's like throwing business cards at the guy next to you without even looking at him. I've used this simple framework thousands of times, and it works perfectly every single time:


"Hey [Name], hope you are well. I noticed that you are a [commonality] like me. Would love to connect. Best, [Your Name]."


Most people are open-minded and willing to help you out, especially if they share some commonalities with you.


For example: "Hey John, hope you are well. I noticed that you are a Harvard Business School Online Alumni like me. Would love to connect. Best, Kevin."


Your chances are good that they will accept your connection request. Then, you can start a conversation to learn about their industry, etc.


Pro Tip: In your next interview, you can mention that you've already had conversations with John, a director at company XYZ, about the industry you are applying for.


Action Step: Start your LinkedIn networking journey now - I'm happy to connect! You'll find me by typing "Kevin Schwarzinger" into the search bar or by clicking the link above.


2. Retire Early: What is The Cash Flow Quadrant?


The Cash Flow Quadrant is a simple but powerful model that shows how you earn your income and how you can put your money to work to achieve financial independence. It consists of four quadrants, each representing a specific source of income:

  1. Employee (E): In this quadrant, you work for someone else, trading your time and skills for a regular salary. You usually have little control over your income and are dependent on your employer.

  2. Self-employed (S): Here you work for yourself and exchange your time and expertise directly for money. You have more control over your income, but your earnings are still directly tied to the hours you work.

  3. Business Owner (B): In this quadrant, you own a system or business that makes money independent of your direct involvement. You have more control over your income and can benefit from scaling your business.

  4. Investor (I): As an investor, you use your money to invest in different asset classes and earn income through capital gains, dividends or interest. You have ultimate control over your income and can take advantage of passive income streams.

Why is the cash flow quadrant important for you?


The cash flow quadrant is crucial because it shows that financial freedom is not just a matter of how much you earn, but how you earn your money.


To achieve true wealth you need to decouple your time from your income.


The only way to achieve this is by owning cashflow producing assets.


How I used the cash flow quadrant to my advantage and you could too:


(Disclaimer: No investment advice!)


I started out as chimney sweep working 9-5 trading time for money. Throughout the years I progressed into investment banking and wealth management earning a higher salary but it's still dependent on my time input.


Meanwhile, I used my cashflow = salary to buy income producing assets = stocks & ETFs. They provide a steady cashflow in form of dividends and distributions and go up in value too.


Furthermore, I complimented my portfolio with Gold and Bitcoin as a hedge against loose monetary policy devaluing the current form of money, USD, EUR etc.


Additionally, I created digital assets = my book. It's an upfront investment of my time and now I get paid regularly when people hit the buy button.


I decoupled my time from my income. Dividends will flow no matter if I write this newsletter or not. I receive book royalties every month even if I sit on the beach sipping coconuts or play video games all day.


Using my cashflow from the employee quadrant helped me to build a solid foundation in the investor quadrant. Currently, I'm leaving my 9-5 role in wealth management progressing from the employee quadrant into the self-employed quadrant. Building my personal brand as solopreneur and creating more digital assets in form of online programs, workshops and a second book (yes, it's in the making). That allows me to further decouple my time from my income and progressing into the business quadrant eventually.


Action Step:


Expand your skills and knowledge - No matter which quadrant you're in, it's critical to continually work on your personal and professional development. Learn new skills, attend classes or workshops, and learn about different investment strategies to make better financial decisions.


3. Travel The World: Luxury-Backpacking


I'm sure you've heard of "Glamping" before, right? It's a blended word comprising "glamorous" and "camping." It's for all those folks who love the idea of camping — at least the part about being in nature and enjoying the tranquility — but hate the thought of sleeping in tents and freezing your butt off on the moist forest floor. That's why a genius mind invented the concept of Glamping, offering the best of both worlds: being in nature while enjoying the amenities of a luxury accommodation.


My fiancé, Angelika, and I are a perfect fit for this. Over the last 10+ years, we progressed from being all-inclusive ultra tourists to curious semi-nomads. We always loved the idea of backpacking: traveling light, booking accommodations on the go, and staying just a few nights before asking locals where to head next. But there were two major problems holding us back.


First, the suitcase. It's just not fun to travel around on foot carrying this bulky thing. I mean, how do you even survive several days without a ton of clothes and seventeen pairs of shoes? The second issue was sleeping in hostels. For whatever reason, we automatically associated backpacking with hostels. The thought of sleeping in a dorm room with 8+ other folks creeped us out. We lovingly call each other "luxury bitches"...


However, on some random afternoon, Angelika had an odd idea: What if we traveled with backpacks but checked into traditional hotels as usual? I know the idea isn't that revolutionary, but in our world, it wasn't a valid option so far. By eliminating the horror-hostel scenario from the equation, we could certainly figure out the backpacking part.


So there we were, watching hours of YouTube videos on non-negotiable backpack items, learning what to bring with us, and how to travel for a year or more with only a few essentials. After a few weeks of research, we found ourselves on a plane to Bangkok, with our backpacks stored as hand luggage and only one night booked in a decent hotel room.

During our three-week trip through Thailand and Vietnam, we took 11 flights, visited dozens of cities, and stayed at multiple accommodations. Did you know you can stay in a 5-star hotel, indulge in the finest foods, and sleep like a baby in a cozy king-size bed for 60 dollars? Well, it's Vietnam, baby.


As it turned out, you're not doomed to sleep in hostels once you start traveling light.


We call it Luxury-Backpacking.


Give it a try; you probably love it.


Adventure Awaits,


Kevin Schwarzinger

Founder, ChimneyCapital

Author, World Explorer & Solopreneur




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