Wednesday, June 10, 2020

Clarifications on LlamaFinance video on the ERM program.

Strange business expenses include llama rental and buying human skull

The blog known as LlamaFinance has come up with a video that is favourable towards my ERM program.

You can access the video by following this link.

When I was told of a favourable review by other bloggers, I was initially overjoyed, but upon second thought, it dawned on me this may attract more unwanted attention than what my course deserves, so I decided to write a clarification post after seeing this video.

a) We did not sponsor or pay for the video.

I am, of course, pleased at such a favourable comparison, but the training industry is becoming more challenging and some trainers are struggling due to falling sales.

When a video like this is published, I was afraid that people may think that I am paying for "attack ads" on other trainers. This can trigger an industrial wide war where educators pay blogs to make comparisons in their favour to drum up more sales. I certainly don't want another blogger to compare my course with another and come up with reasons why my ERM programme falls short just to earn a few thousand dollars of advertising fees. Also, we need to shore up all the money we can earn at this time.

So I need to make a clarification that neither myself nor Dr Wealth worked behind the scenes to incentivise Llama Finance to create this video.

b) Leverage of x3.5 is too high for ordinary investors.

Llama finance has put in a lot of effort to deconstruct my approach and I am really flattered by that.

However,  I don't want members of the public to think that leveraging at x3.5 is a safe thing to do. It's not too difficult to find graduates of my program these days and they will be happy to assure you that the leverage I propose is much smaller than the brokerage limit. In all cases, only 40% of my students apply leverage after attending my program and there is plenty to learn even if you do not use leverage in your portfolio.

c) Diversification matters a lot in investing.

Also, my program results in a portfolio of around 12 - 18 counters in size. Much larger than the sample portfolio presented on the video. As my program focuses on giving beginners a rookie portfolio, I can't do violence to them by building portfolios of smaller size because it attracts a lot of idiosyncratic risks.

In my ERM community, there is a furious conversation going on right now on the merits of investment portfolio against private property. A lot of my students do not see real estate and REITs as being mutually exclusive. They often have multiple properties and a 7 digit REIT portfolio and love both to bits.

I hope that readers will not see this as "us-against-them". A successful training programme does not need to come about at the expense of another. Members of the public need to attend webinars and make an intelligent decision on their own.

Similarly, as we move through different timelines, a REIT-centred portfolio can have moments of underperformance compared to real estate.

Finally, I hope that Llama Finance can show up for my webinar on 20 June. My course has evolved a lot since last year and I don't ever teach the same slides in every class.

[ Make no mistake, I love Llama Finance to bits for doing this. I'd buy him a meal if not for the fact that this would be viewed as a bribe by the rest of the industry that is struggling to hold up their revenues! ]


  1. Gift the Llama a free course!

  2. That thought did cross my mind, but I really don't want to start WWIII between financial trainers. I might end up starting a trend of giving bloggers a free course for a nice comparison video would hurt the industry once every training provider decides to do the same.

    I am really grateful to Llama Finance though....

  3. The video is also hosted on youtube, where the I-quadrant folks replied with a correction on his analysis. The correction apparently shows I-quadrant method earning more. Just FYI.

  4. LOL ! I wish I-Quadrant all the best !