Welcome to this week's edition of Better Know a Millionaire Investor. This week I'm sitting down with Gareth Soloway, the 32 year old President and Chief Financial Officer of InTheMoneyStocks.com.
Gareth is a very successful trader and investor with a decade of experience in the financial sector. He has been the President and Chief Financial Officer of InTheMoneyStocks.com for 6 years, and uses his knowledge of the markets to teach people around the world.
His friends like to say that he achieved the three “B's” in life – beach, blondes, and beemers. The great thing about Gareth's story is that he really did start the company with next to nothing, and developed it into a multimillion dollar operation.
Let's get to know Gareth Soloway a little better…
Who Are You and How Did You Start?
Tell me about yourself and your company?
Gareth: I am 32 years old and one of the founding fathers of InTheMoneyStocks.com. I am now the President, CFO and Chief Market Strategist of one of the top financial education, trade alert and consulting websites in the world. I started the company with Nicholas Santiago in early 2007 with $500. This covered the company registration and a basic website we built ourselves. I think one of the keys to any business is to start with small overhead. Many start a business and have thousands in expenses on day one. This makes it almost impossible to survive. Just two years prior to us starting the company I was broke. At that point, to make rent, I would sell my belongings on Ebay. I worked three jobs, doing whatever I had to do to build my investment/trading account. I took that meager account, turning it into a small fortune.
I grew up outside of Boston, then moved to Long Island, New York when I was seven years old. Both my parents were teachers. I went to the Waldorf School of Garden City. This type of school encourages creativity, something dramatically lacking from the public school system today. Creativity allows an individuals to start a business, dreaming outside the box, having that unique idea that drives innovation.
I became addicted to the stock market in high school and it never left. I studied stock charts and the markets, every free second I had.
In 2007, Nick and I started InTheMoneyStocks.com. After studying the charts together day and night, we formulated a new strategy that bred massive profits and success. We named it the proprietary PPT Strategy. This stands for Price, Pattern and Time. These are the key components to making money in bear and bull markets. Within a month of the business going live, we were profitable. Within a few years, InTheMoneyStocks.com was generating over a million in profits a year, with people spreading the word on the PPT Strategies, members coming from over 25 countries around the world.
InTheMoneyStocks.com is a proprietary research, analysis and consulting company. We help any investor, big or small, manage their money proactively through swing trading and day trading. We teach members the key PPT Strategies that avoid the hype on Wall Street, beating the institutions in annual returns easily. InTheMoneyStocks.com prides itself on education, while giving out trading alerts, daily videos utilizing the proprietary PPT Strategies and market reports. Members are also privy to live broadcasts where they can interact with us.
How did you make your first million?
Gareth: The first million is always the hardest (<- Click to Tweet This). I had heard this in the past never fully believed it. In the first year, we had our ups and downs. As the company would gain more members, something in my private life would pop up. Life is never simple. Early on it was a struggle. In year two, things started to flow. The word began to spread about our success and membership swelled. In addition, I was trading my own money and in utilizing all our techniques, I was able to double my trading account two times in one year. This combination helped me achieve my first million.
Investing Style
Where do you currently invest your money and why?
Gareth: I practice what I preach when it comes to investing. I swing trade and day trade my own money, never being in a single stock for more than a few weeks. I am a firm believer that buy and hold is dead. There is far too much manipulation from the Federal Reserve and institutions to just sit back and achieve long term growth. You can make 10x more money, more safely if you know where to buy on dips and sell on pops. I would never be a lazy investor in my life, especially with the continued market intervention of the Federal Reserve. They create bubble after bubble and the little investor falls into their trap time after time. The institutions just reap the rewards or get bailed out if they make a mistake.
Using the proprietary methods of analysis, I picked up some real estate in mid 2012. I bought a vacant lot for $150,000 and one year later I am on the verge of selling it for $210,000. In addition, I purchased a beach front condo. This beautiful, brand new condo I was able to scoop up fully furnished with additional upgrades for $100,000 under asking price. Current units 6 months later are selling empty, no upgrades for $25,000 under asking price.
One of the main keys to investing profitably is jumping in when things look the worst. When everyone else hates something and people are too scared to act, jump in. You will almost always get a good deal. This type of mentality is what innovators live and breath.
Recently, this happened with Apple stock. In 2012, analysts were upgrading the stock when it was trading at $700 per share. As soon as we saw this, we alerted members the top was at hand. As the stock fell, more and more people became bearish, hating on the once high flying play. At $420.00, our signals told us a near term bottom was at handle. Of course at this point, everyone was bashing it. The stock has since bounced to $465.00. While it will go even lower to $355.00, it was a great bounce for a profit of 10% ina few weeks.
Has that changed over time?
Gareth: Over time, I have become more disciplined and fine tuned my trading techniques. The longer your trade, the more you learn. The more you learn, the more profitable you become. The combination of these have helped the company and helped me individually become a better swing trader/day trader. The beauty of being a trader is you can do it from anywhere in the world assuming you have a good internet connection. In addition, no matter how old you get, you can still sit behind the computer an hour a day and make a few thousand dollars.
What are your thoughts on trading versus investing?
Gareth: Long term investing is dead. To safely profit in the market of today, everyone must realize you must be active. No one is going to handle your money like you will. The key is getting educated. Most people spend huge sums on becoming a doctor or lawyer. Trading is no different. You must be committed to studying and learning. The profits will flow. I would much rather be a trader than a doctor or lawyer. I will make more and work when I want to work from anywhere in the world. It is the greatest job in the world.
How To Become a Millionaire
Many millionaires (even though you didn't) made their money through real estate. Why do you think that is?
Gareth: As I mentioned, I have dabbled in the real estate market lately. A lot of money has been made in real estate for a few reasons. The main reason is leverage and profit. You can put less than 20% down and borrow huge amounts of money. If you have some cash backing you, you can run multiple projects at a time paying 3-4% interest. If you have a good builder you trust and you know how to find deals, quite a bit of money can be made.
To give an example: The vacant property I bought was for $150,000. I borrowed $140,000 of that at a 3% interest rate. I stand to make $60,000 when I only had to outlay $10,000 plus interest of 3% for a year.
Is there another way to become a young millionaire without starting your own business or being an entrepreneur?
Gareth: To start from scratch and become a young millionaire is tough unless you start your own business, especially in this economy. One of the ways some people do it is from family money backing. Without that I truly believe you have to be an innovator. The economy is tough right now and prices of food and energy are rising. It is hard to become a millionaire from a 9-5 job at a young age.
Risk and Reward
What's the biggest risk you ever took? Do you regret it?
Gareth: The biggest risk I ever took was starting InTheMoneyStocks.com. I still remember announcing to friends and family I was going to start it. They looked at me like I had 10 heads but supported me none-the-less. I was essentially broke at this point. The risk of failure was and still is my biggest fear. The key is to tell yourself and believe failure it is not an option. Taking that leap is what life is all about. If you want to be rich, lead the good life with as many toys as you can buy, you need to take the risk and go for it. I am a true believer that anyone can do anything. Most people give up when they stumble. Millionaires who work to achieve it just never let anything deter them.
If you could make one change, what would it be?
Gareth: I would like to be able to take it down a notch more often. To continually grow, we must always be innovating. It never stops as competitors are always nipping at our heels. Running the company, trading and handling so many other avenues brings on a lot of stress, regardless of the money you make. Running your own gig tends to make you (if you are not already) a control freak and anxiety can often kick in. I have become aware of these factors and try and eat well and workout almost every day. Keeping everything in perspective is a major help as well. Remember where you came from and being broke. Those memories keep you humble and sane. Taking it down a notch was one of the main reasons I moved to the beach.
What advice do you have for young adults and college students when it comes to entrepreneurship, money, and investing?
Gareth: Always think outside the box. Never get boxed in to what society wants, thinks or tells you. There are millions of billion dollar ideas out there still to be thought up. In addition, never let failure or laziness deter you. When you fail, it should make you charge forward even harder. Lastly, be kind and remember to help those less fortunate. Many in this world do not have opportunities I had or you have. Those that do good for others will have more good happen to them. While I work in the Wall Street craziness, I believe you must always lend a helping hand. My main goal of starting the company was to help average investors who continually lost money, compete and beat the big, bad institutions. Our good fortune comes from that. As long as an investor has an open mind, I can teach them to make more money than anyone on Wall Street.
What I Learned from Gareth of InTheMoneyStocks.com
Starting Young
It seems like a common trend that I've found by talking to young millionaire investors is starting young. Gareth became fascinated by the stock market in high school, which echoes similar stories by Richie Hecker and even myself. I think that starting young is key to being an millionaire at an early age just for the simple math of time and compounding.
Trading vs. Investing
It was interesting that Gareth said that buy and hold was dead. I don't know if I necessarily believe that, but I do distinguish from investing on technicals and pricing, versus owning a company that you truly believe in for the long haul. Gareth made his money on trading – as he said, he never holds a stock for more than a few weeks. In my experience, many of my best trades were realized out over several years, with seeing 100-300% gains over that span.
Real Estate
It was interesting that Gareth was applying some of Warren Buffett's advice to the real estate market – basically buy when others are fearful. I'm a firm believer in this, and I think that the housing market is going to rebound because too many people have sold off and now there is more demand than supply. It will be interesting to see how these next couple years will be in this sector.
What are your thoughts on Gareth's philosophy that long term investing is dead? Do you think trading is the way to go?
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