By coinnews 
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Welcome to Financial Freestyle. I’m Ross Mack, and this is sponsored by Vanguard.Welcome to Financial Freestyle here on Yahoo Finance. I’m your boy, Ross Smack, and look, guys, no matter where you are in your own journey, you can never stop learning and today is no different. And that’s why I’m talking to Detroit’s own Jason Brown, investor and author of Five Year Millionaire. Jason, how you doing, boss?
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Ross, I’m doing good, man. Good to be here withyou.
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Man, you already know, Chicago to Detroit and right back. I got a lot of love for Detroit. But before we even talk about Detroit, who is Jason Brown? Let’s inform theworld.
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Yeah, so Jason Brown, I, uh, I’m a stock market and finance expert and author of the 5 Millionaire book.But before I arrived here, I was just an 18 year old kid from Detroit trying to figure out how to create a better life for ourselves outside of gangs, drugs, uh, things like that and got introduced to the stock market at an early age and I really latched on to it as being my ticket, uh, to do something different and, and create wealth in life. And that’s why I’m passionate about talking about the stock market and sharing it with people, especially coming from uh a beginning where I had no resources and no education to it.Uh, I really like to share with people what’s possible, uh, once they get into this industry.
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I love it, man. You know what’s interesting is like.During kind of the COVID days, it was a whole lot of.Finance experts that came out of nowhere. And if you listen to this on Spotify, I just did the air quotes, right? But you need to see people with real gains, right? And so one of the things my understanding is that you took a 10K student loan and flipped it to over six figures. And so when you’re talking to people that are, you know, new to the stock market, kind of what is your advice?
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So I think it’s important to understand the backstory behind that, and I, I was 18 years old and I always heard about the stock market. And so, you know, where I’m from in Detroit, specifically in my neighborhood, it wasn’t the greatest and if you graduated without getting a shot or locked up or something like that, it was a.Embraer. So I initially took my graduation money, had a big celebration like you made it, you’re 18, you graduated. And I took that $2000 and I went to a bank and said I wanna invest cause I heard like, oh, if you invest $2000 and you leave it, come back, you could be a millionaire. I thought, why don’t everybody do this? So I took that $2000 to the bank.And they basically, you know, she said, what’s your goal? I said, to be rich, you know, why else would I do this? So she said, you want aggressive funds? I said, Sure, come back basically two years later, they lost $1300 of my money. So I had $700 left. I was sick to my stomach. I said, what happened? I thought y’all don’t lose money. She’s like, I don’t know what to tell you, right? So I said, I could have lost my own money. $700.This wasI graduated in ’99, so this was like 90, yeah, like 1999, but I came back two years later, so this is about 2001.
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Makes sense,
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youknow.
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That dot com era, you got gut.
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Yeah, and so I took the $500. I said, well, I’m gonna invest the rest myself. I spent $200 on some gym shoes. I basically bought the stock of company I work for Sprint PCS at $5 a share. It fell down the 4. I was like, man, this doesn’t work. Maybe I don’t know what I’m doing. I went back up to 5. I’m like, if they could just go to $550 I can finally make $50 so I don’t know have to work weekends. I make $8 an hour, $64 on a Saturday, $50 when you take out the taxes.And uh when I bought and it went back up to 5 and then it went down to 4 again, so I’m like the stock market rigged, they won’t let it go higher than it needs to be. They know my they got my social security number, they know I needed to go up to 5 and won’t let it.And so I went back up to 5 and I said, I’ve seen this before. I got out at 5, I broke even. It went down to 4, I got in and went back up to 5. I got out and made my 1st $100. When I made my 1st $100 that made me realize the power of patterns. That was a channel and stock part pattern, and I didn’t really know uh that that pattern exists. And so I started studying all these other patterns. And as I got good at flipping my $500 I then, I had a scholarship to Wayne State University, Mike Cayler School of Business here in Detroit, Michigan.I applied for financial aid because I knew that they would double pay the account and I could get the refund and do whatever I wanted with it. I took that $10,000 student loan, then I invested in the stock market and grew it to over six figures, but I had to practice with my $500 to have the confidence to take that $10,000 student loan to get there. So when you say, what’s my advice?Uh, my advice is, doesn’t matter about the money or how much you had to start with. My advice is learn the game, because once you learn the game and see the power of it, you’ll find the money.
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I love that, man. Great, great story, inspiring. And so, obviously, you know, when you had your 1st 500, it sounded like it was kind of single name stocks, right? Uh, that being Sprint, UCS you say going from 4 to 5 and then 5 down back in 550 or whatever,
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right?
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But then you said you got the, you know, the student loan. Were you still trading single names or were you, you know, using options? Like, let’s kind of talk about that journey.
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So I primarily transitioned into the options, cause what I found was $500 wasn’t enough to really move the needle for where I was trying to go in life. And then I saw stocks that were more expensive that I couldn’t afford, so I’m like, well, how do I play with some of these big boy stocks? That’s back when like Google was like $1000 a share. Some of these like expensive stocks.And that’s when I learned that I can control the stock versus owning it. And so that’s when I started to get into the trading options. I started trading, you know, tech names. I used to even trade Yahoo, which is funny, not that we’re on the Yahoo on his podcast. Um, but I just started trading options on a lot of stocks because I could make that $10,000 go further by putting $2000 on 5 different option trades and then also getting the exponential return. So that was really how I started to have that account grow as quickly as I did.
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So one of the things you said was that, you know, when it comes to, you know, trading, right? One, you recommend people gotta learn. You needed to learn trading $500 to learn how to trade with $10,000 right? But another thing you mentioned and I definitely want to expound on it was that you were looking at patterns and so to speak, what you saw was that Sprint was trading in a price channel.Explain that to the people and more importantly, let’s talk about what are some other patterns and, you know, things that you use when you’re trading.
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Yeah, so sometimes the perception out there is that trading is gambling or guessing. There’s also this perception that when people are trading, that people are day trading. They’re sitting in front of their computers all day. Couldn’t be further from the truth.Um, I want, I like the lifestyle, so I don’t want to sit in front of my computer all day. Trading is simply taking advantage of price patterns. No different than, uh, if you look at your weather app and you see that it’s gonna rain. You could take advantage of that and say, I’m gonna go buy some umbrellas.From the dollar store, I’m gonna go downtown where to the Fox Theater, people are dressed up nice, forgot their umbrella. Something that costs $1 I could probably sell for $10. So you’re trading, you’re taking advantage of that price action and what’s going on in the economy or on the stock chart, if you will.So that’s the game, is looking for a place where technically it’s called support, which is where traders feel like Apple, Amazon, a stock it’s not gonna go out of business and it’s trading at a fair, fair discount, meaning it has still has a customer base, still has a utility use. It shouldn’t go too much further below roughly this range. It’s not an exact price. It’s like around this price.It’s a reasonable price to own this stock. And so you want to jump in at that point, which is called support, and typically they’ll trade up to what’s called resistance or that top range where people feel it’s overvalued or until some new news comes out or earnings, it’s gonna be hard to break above that price level. That’s typically where we take profit. So for me with Sprint, at $4 the stock was pretty much undervalued. At $5 it was overvalued. And once I understood that, I could start to take advantage of that price range.Other, um, patterns that are out there, there’s up trending channeling, there’s down trending channeling, and then obviously the sprinting was a sideways channel, meaning 4 to 55 to 44 to 55 to 4, you look up over a week, a month, it’s still in that range. So the stock’s going sideways, not really going up, not really going down.There’s moving average patterns where a stock may pull back to the 1020, 50, or 200 day moving average. Um, so why is that important? Typically, a 200 day is kind of representation of about a year. People who own the stock over a year, so that’s typically a pattern.Where a stock holds up because people own it at an average cost over the year. So there’s a lot of different patterns, but we call the three most profitable ones, channeling, uptrending, and down trending. Those are the three basic ones that most people should start with because it’s easy to recognize and it’s super profitable once you get good at spotting.
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I love it. I love it. And so now, if I’m a beginning trader, right, and you’re trying to give me the game, and now I’ll say, OK, I’m looking at my charts. I’m trying to look to see if there are any defined patterns. What’s your um time frame that you recommend they shouldlook at?
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So it’s gonna depend on each person, but from a, uh, well, there’s two different time frames. There’s the time frame that you trade in. Some of our trades last up to a year, like we just did a trade on Walmart that it didn’t expire till March 2026, but we made about 36% profit in about two weeks.But when you’re looking at the technical analysis of the chart, you typically want to look at 6 to 12 months. So that will give you at least 4 quarters of earnings and a nice range to kind of see what the pattern is. So you wanna look at about a year, um, if you’re trading. But then you can buy options, you can buy options that are far out to 3 years. So it doesn’t havehave to be something that’s, it expires today or every week, like they try to hype it up on TV or on a Reddit form. You can be super safe like we did with the Walmart trade and we sent it all the way out to next year. And we know Walmart wasn’t gonna go to zero. We knew it had already sold off with the tariffs. And so you got a year for that thing to turn around, but it turned around in about 2 weeks and we just exited it with like a 36% return.
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I love it
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and
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so, right? Obviously you got day trading, you got swing trading, and in your instance, you gave us an example of looking at some leaps, right? And so,To your community of people that you’re teaching, right? What do you recommend? Is it more leaps? Is it more swing? Is it kind of what’s your outlook when it comes to trading options?
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You know, first thing is safety. So the reason sometimes we start with looking at leaps is like,A year is a nice time frame if the stock or the market has to take a dip for it to come back, for you to sit through an earnings report or two. That’s a nice safe time frame. If you buy a stock, you might hold it a year, you buy a leap, you hold it a year. That also puts you in the arena of not short term capital gains cause that’s anything you hold less than a year. Uh, so anything over a year, should you hold the leap, you’ll fall in the long term capital gains, put you in a shorter tax bracket.However, as you get better at this, you can leverage shorter time frames like 90 days, 6 months, and then some days, 30 day options. But the shorter the time frame, the riskier it is, the better you have to be at reading the chart in theMore likely something needs to happen in 30 days when you’re going with that shorter time frame. So that takes a certain level of discipline, even a little bit of luck, if you will, but that’s why we typically recommend going, you know, 6 months to a year out. You might not have to be in it for 6 months to a year, but you, it’s better to have the time on your side and not need it than to need it and the trade is expiring on you. Cause obviously, not obviously, most people might not know this and an option.Trade, if it goes against you and it goes against you and stays against you, you could lose the full investment. But the powerful thing about option trading is, you know what your risk is is upfront. So if I put $2000 in the trade, I can’t lose more than $2000. So that’s a pro of it that you already know your risk is defined upfront. Maybe a kind is unlike a stock where you could wait forever. Once that option expires, it’s either worth something or it’s not.
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Facts, facts.Look, we’re gonna take a really, really quick break and when we come back, we’ll have more with Jason Brown, author of Five Year Millionaire.Welcome back to Financial Freestyle here on Yahoo Finance. It’s your boy Ross Mack, and I’m talking to Jason Brown, people, if you are trying to learn how to start investing, trying to learn how to trade, this is for you, right? I think we started talking about a lot of the, you know, technicals we’re looking at from a you know price movement standpoint, supply demand zones, right? But are there any indicators that you like to use that you kind of overlay with um you know some of those patterns?
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Yeah, so there, there’s a lot of indicators that I like, but my specific ones I love moving averages. I love to use Bollinger bands which measures volatility, which is how, you know, price moving and pressure, but, you know, just the, you know, the audience could be very, that’s listening to this, and so.I’d love for them to just think about investing or trading like this. Don’t, don’t get too caught up with each indicator, uh, as you get better at this. It’s, it’s just like the weather map on your phone, right? You, you use a different indicator to tell if it’s raining or sun will come out. But just think about it as uh buying a house. When you buy a house, you might look at the country, you drill down to the state, you drill down to the city, and then you drill down to a neighborhood, and then you finally can pick a a house on that block.Number one indicator I think everyone could start to look at is the overall S&P 500. Then you drill down to a sector, is it technology, then you drill down to a sub-sector. Are you dealing with AI stocks? Are you dealing with e-commerce stocks? And then you go into a neighborhood and look for a specific house if you want to buy a specific stock. That could be Apple, Amazon, Google, Palanttier, or it’s kind of like you can zoom back out and just buy an ETF and then takeAdvantage of the uh bucket of stocks that are comprised of, you know, those tech stocks. So you’re not just buying one, you’re getting a little bit piece of each one. But that’s one indicator everyone should look at. How’s the overall market doing first? Cause if the overall market is bearish, meaning the stocks are going down, you might want to be looking at a strategy that takes advantage of the market going down. If the overall market is going up, then you want to look at a strategy that takes advantage of it going up.Then you can draw it down to the individual stocks and the individual indicators like moving averages, 400 bands, MacD and get a more microscopic view of why you think the stock is gonna keep going up or keep going down.
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I love it. I loveBollinger bands. I use it, right? It’s pure statistics, right, to the people that’s listening. Bollinger band is literally saying 95% of the time.If you ever took, you know, statistics and understand normal distribution, one standard deviation and two standard deviations. So it literally just plots out 2 standard deviations above and below a moving average. And so it’s literally saying that this stock, 95% of the time stays within this realm. Anytime it comes out of the bow band, it’s generally a good signal to either buy or sell. Um, but I’m rocking with you. I’m rocking with you and so, right, that’s kind
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of volatility.
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Yeah, yeah, yeah, yeah. Let’s, let’s segue. I’m rocking with you, um.Let’s talk about you transitioning to an author now, right? You add some stuff to the resume. Uh, what made you want to write a book and what should our listeners know aboutyour book?
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Yeah, so I wrote the book Five Year Millionaire. It’s really a story of hope for regular people. Uh, I meet so many people who think I’m behind in life, I can’t retire or I got started late, and, you know, the reality is you can really turn your life around in 5 years. That was my story. When I took that $10,000 student loan, grew up the six figures, I dropped out of school and I’m scaling it to $300,000. By the time I was 25, 26, I had lost a $250 million trying to make $50 million.And I was flat broke, had to move back home to my mom’s house in Detroit, bars on the window, drugs in the neighborhood. And then I started to develop a plan of how to get back into the game. And number one, I had to get a job. That was number one. I got a W-2 job selling cellphones at Verizon. And number 2, I think the most important part was I based my lifestyle off my hourly, and then I use my commission checks to get back into the game. So I lived below my means. I just created a budget that allowed me to invest every single month.And then from that, I kind of parlayed that into scaling it to, you know, over a million dollars and I started documenting my journey on YouTube and sharing with people how I was making the money back, and that’s how I ended up creating my own online university, but the book kind of just encompasses that whole story and wraps it up in the bowl that, you know, you too can start from humble means.Even if you have something and get knocked down and get back up and get back on the train and achieve some level of wealth in this world, even if you had a disadvantage or, you know, you had a fall.
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It’s a phenomenal story, man. Uh, congratulations, one. And I really love what you said, right? Because when we talk about investing,The most important thing you said was, one, living below your means, and then 2 was budgeting. People don’t understand, and when I talk to people about investing, the most common question I get is, yo, Ross, how much money should I start with? And my exact response, no matter if you’re an NFL player.Or if you’re somebody that literally is living paycheck to paycheck, right? The number one thing is, look, you need to, it’s not about how much you can can start investing with, it’s how much you can afford to invest every month. And so the fact that you said, you know, I use my commission checks every month effectively to um to start investing or to get back to investing.That’s budgeting, right? Like the idea is saying you’re not just going to get rich saying, OK, let me start with $500. Now, if you were able to save $500 how do you now put an extra $100 or $200 every month so that that can compound and you can, you know, do trading, etc. But like I, I love that you said that. And so when you’re teaching people, right, whether it’s in your community or in your book, like, kind of what’s that mindset when it comes to getting ready to start investing?
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Yeah, I think the mindset, I said this to someone else, is thatI’m a millionaire even if I lose all my money today, and that’s super important because a millionaire is not having a million dollars. That that’s the technical, like, yes, I have a million dollars. You could win the lottery and have a million dollars. You could get a football contract or basketball and and have a million dollars check.But a millionaire is about thinking about like a millionaire, seeing opportunity, controlling your cost, knowing how to take calculated risks.And so whenever I’m teaching people, it starts with that mindset, because if you don’t have the education and the mindset, I, I, I’ve been down the road where people are like, I just wanna follow your trades, tell me what to do. And I remember just sending trade alerts and then people would be like, well, I’m afraid to do it and I’m scared, and I realized they didn’t have the mindset, they didn’t have the education, and so it was never about if they had the money, it’s about if they think like a.Millionaire. If they think like 100,000 there, if they think like a person who wants to get out of debt or would never be in debt, that’s the key to unlocking wealth, and then the actions will follow. So that’s what I would say to people out there is work on your mindset first and then it’s about the tactics and the actions. But if you have the tactics and the actions without the right mindset, you won’t even have the courage or the intelligence to take action on it.
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I love it. That’s real game, man. Listen, I think to the, to the viewers, I, I put out a post the other day and I said, this is obviouslyRight, if you were one of those people in hindsight is always 20/20, but if you’re one of the people that, you know, was like, man, I wish I got, you know, bought more of this or bought anything in 2020, this is no different, right? I think that umYou know, obviously there are uncertainties. We don’t know when, you know, the tariff war will end. However, the one thing I’m certain about 5 or6 years from now.Exactly. The one thing I am certain 5, 10 years from now, the market will be higher. And so I think this is always a great opportunity, especially in dislocation periods. It’s like, yo, let me actually be more, uh, live below my means so that I could, you know, use that extra money to try to build wealth, and now’s the time.Um, but look, I really wanna truly thank you for coming on the podcast. Ladies and gentlemen, give a round of applause to my dog Jason Brown.But that’s it for this episode of Financial Freestyle. Make sure you guys tune in each and every Monday. And like always, make sure that you tell your auntie, your cousins, your friends to like, subscribe. And if you’re watching this on YouTube, there’s a little QR code, come on here and scan that so you can watch more podcast episodes in our whole Yahoo Finance Network. Until next week.
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This content was not intended to be financial advice and should not be used as a substitute for professional financial services.