Updated 1/5/2022.
On most blogs, the “About Me” page is the only place where readers can find out more about who they are dealing with and who the author of the articles is. I was wondering what interesting way to take an otherwise universal and usually boring page and I thought I could write it as a fictional interview with myself. Hopefully you’ll enjoy it more…
What’s your name?
FinancialHacker or FinHacker for short.
Where are you from?
I live in Czech Republic. It is small country in the middle of Europe. I bet you have never heard of it, have you?
Why are you appearing under the blog name?
For a long time, I have been solving the dilemma of whether to appear anonymously or under my real identity on the blog, finally I decided to appear anonymously under the FinHacker pseudonym for one simple reason. I want to post real numbers here regarding my assets, trading account and progress, but at the same time I want to keep enough privacy (the avatar on the right is quite similar to me :)). So, in the end, I figured that real numbers would be more interesting to readers than vague sums or austere percentages. That’s all there is to it.
How old are you?
Between 35 and 45. I don’t want to be completely specific for reasons of anonymity.
About the title of your blog… Are you going to write about hacking banking systems and stealing bitcoins?
I don’t intend to, and I don’t think those things are even very legal :-) I will be writing here about investing and systematic trading in financial markets, various tutorials, tips and hacks from the personal finance and FIRE community.
Ufff, another blog about personal finance and trading?
The problem I see here in Czech Republic is that there are very few good blogs on this subject, but abroad it is different. There are plenty of sellers of training courses (very often of poor quality) who live mainly on income from sales, but they don’t go to market with “skin in the game”. There are a few very good blogs, but unfortunately some of them are not updated or dead.
Can you reveal how much money you manage then?
Sure, I have over $1,000,000 in my real trading account as of early 2022. This is my own money, I am neither a fund manager nor do I manage money for friends or family (no way :)).
Where did you get all that money?
I’ve been in the “online” business since 2011, so mostly from there. There is no success story regarding getting fabulously rich by daytrading e-mini contracts, betting on Tesla in 2013 or buying hundreds of Bitcoins in 2016.
Are you suggesting that you can’t get rich on the stock market?
I am of the opinion that the stock market is good for further appreciation of funds. I’m not saying you can’t make a fabulous fortune on the exchange, but the chances of you doing just that are very low. For anyone to hit the jackpot in the stock market, a high level of risk will be required, which entails an increased failure rate.
So are you a full-time trader or just a hobbyist?
This question is quite “tricky”… I consider a full-time trader to be someone who actually trades/invests for a living on a daily basis and usually receives management fees for doing so, i.e. a fund manager. I don’t really like daytrading, although there are certainly a few individuals who make a living at it.
Since my income also comes from business and I don’t trade on a daily basis (I want to spend my time more efficiently and not sitting in front of a monitor), I consider myself a hobbyist or better said a retail trader, although the account size may not correspond to a classic retail account, which is somewhere between 5,000 and 50,000 USD in Czech Republic.
How long have you been involved in financial markets and what is your expertise?
My first interest in financial markets dates back to the beginning of 2005, when I registered in a discussion forum. Since then, with various breaks, I have been involved in markets, either actively or by studying.
In terms of academic expertise, I have no formal erudition outside of a university economics degree, nor have I ever worked in the financial sector. By “officially” I mean various certificates or brokerage exams. However, time has taught me that academic education is fine in theory but almost useless in practice, at least as far as the financial markets are concerned.
Can you describe your journey as a trader/investor?
First of all, I would like to mention that I am a long-term investor rather than a trader. But it’s been a long and winding road to get there, so I’ve been flying around the world…
Early 2005 – first ever registration in a financial markets discussion forum.
Half of 2005 – buying the first educational course on daytrading (yay, I’ll be rich in a minute :)).
Years 2006 to 2014 – intermittently trying to trade everything possible and impossible, but mainly focusing on daytrading (it has to break at some point, after all, almost all traders around me are profitable :)). I also buy continuing education courses on options trading, commodity spreads, statistical arbitrage… but they don’t help me in any way.
After graduating from college, I am employed part-time at a consulting agency. At the same time, I am starting to build my online business. The money from the business is starting to pile up, but what to do with it? There is no need to reinvest in the business, oh there are financial markets…
Year 2014 – the turning point comes, I realize that longer term systematic investing/trading is the path that makes sense to me and the one I want to follow. I put Daytrading behind me, I’ve killed an awful lot of time with it without any positive outcome.
Years 2015 – 2019 – I am gradually increasing my capital under management. Trading results start to form quite interesting capital additions.
End of 2019 – I reduce the capital allocated to medium-term systematic trading and transform it into long-term investments. In this period, I am transforming from a systematic trader to a long-term investor.
How much do you make a year trading?
Combined with the business, enough to have a nice life. However, there is one thing to note here… I am still in the accumulation phase, i.e. I invest or actively use almost all the money I earn in trading, i.e. I don’t make any withdrawals from my account because I don’t need to for now.
If we calculate e.g. a 7% p.a. appreciation including dividends, then in a year this makes USD 70,000 from USD 1,000,000, i.e. less than 2 million CZK.
Wait, you’re not diversified into real estate or alternative investments at all?
Basically, you could say I’m not, and I don’t mind at all. I own a couple of low-maintenance properties (a small percentage of my net worth) and then one property that I live in. Unlike the stock market, real estate from my perspective is time consuming and requires patience with tenants, on the other hand it is definitely less volatile. I’m comfortable with it that way.
What about some alternative investments, bitcoin, forex, commodities…?
If by alternative investments you mean collectibles, I don’t understand that at all (except for frequent consumption of wine and good rum) and I don’t have time for it. I haven’t found a purpose in cryptocurrencies yet, I only use the forex market for currency hedging. I stand by the fact that if one wants to trade commodities like gold or oil, it is still more profitable to buy shares of miners or royalty companies than to flock to the commodity markets, which very often suffer from a malady called contango.
What trading styles do you use?
If you mean the way I value my money, then these are the following:
- Long term holding of stocks/ETFs (buy & hold) – the vast majority of my account,
- systematic medium-term trading – about 10-20% of the account,
a small percentage of the account I devote to commodity spread trading..
What is the composition of your portfolio?
I’m glad you asked. I’m mostly long term invested 100% in US stocks and ETFs. For a more detailed look at my portfolio (in Czech language). From the composition of my portfolio, it is probably obvious that I am focused only on the US market. I will leave experimenting with emerging markets etc. to others.
Can you tell me what stocks are in your portfolio?
I’m a proponent of passive index investing, i.e. holding different baskets of stocks (typically ETFs) for the long term. I am not a stockpicker or value investor, meaning I don’t spend time analyzing balance sheets and looking for undervalued companies. I am a firm believer that over the long term, no normal person is capable of outperforming an index. Despite this, I do hold one stock in my portfolio – Berkshire Hathaway (BRK-B). But in the case of Berkshire, it is also essentially an index, hence the exception. For a more detailed look at my portfolio, see My Portfolio (in Czech language).
What broker do you manage your money through?
I use Interactive Brokers as my main broker. I also have an account with Tradestation and a few others, but I’m not very active there. Foreign brokers have the advantage of very low execution fees, so I have never even thought about trading US stocks through a Czech broker. The amount of fees is incomparable!
Okay, but aren’t you worried that you might lose all your money if the broker goes bust?
I’m not. US brokers are very tightly controlled, plus with IB all deposits are insured and held separately with a commercial bank. In the case of larger accounts, what is still done is that the deposit is chopped up into several smaller amounts, which are then held by multiple commercial banks.
Why did you decide to write this blog?
I explained it above. There is relatively little quality information on investing and trading in the Czech Republic (honorable exceptions), and when there is some, it is either in the form of paid courses or affiliate marketing to all sorts of brokers of varying quality. Moreover, financial markets and everything around them are my passion. Thanks to my established business, I can devote quite a bit of my working time to studying and producing various analyses for my purposes. I am happy to share some interesting things with my readers. And maybe I’ll even enjoy blogging.
I notice you’re taking shots at course vendors. You’re not selling any courses?
No, I won’t. I’ve purchased a few courses in the past, too, but I’ve eventually figured out anyway that the best information is that which can be found for free without having to pay anything. It just takes time and patience.
Can you tell us something about your private life?
I live most of the year in the Czech Republic, I am a father of two naughty children, an active sports junkie, a former traveler, a cottage dweller and a fan of fast cars. All this with a positive attitude towards alcohol consumption. Now I’ve revealed everything about myself…
And we’re supposed to believe all this?
You don’t have to, but I don’t see any reason to make anything up if I’m not selling or offering anything to anyone. Plus, I blog anonymously under a pseudonym, so I’m not glossing over my friends anyway.
Thanks for the interview!
I’m glad I could introduce myself to you with this fictitious but true interview. I hope it was more entertaining than the boring “About me” pages.