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The 5 Questions Podcast
Join us as we unlock real estate and business insights, one question at a time.
The 5 Questions Podcast
Safety Before ROI: The Mindset Shift Every Investor Needs | Fadi Habib
We unpack how busy professionals can build income with options without day trading by using realistic goals, quality stock selection, and a simple, repeatable process that protects capital. Fadi shares his GROWTH framework, why margin kills portfolios, and how real estate and options complement each other.
• Why the market looks like a casino without rules
• Setting realistic ROI targets and sleep‑well risk limits
• Long‑term vs swing vs day trading and time cost
• How to research quality stocks and value them
• Simple options approaches for income and entries
• Paper trading, feedback loops, and skills matrices
• Trader vs investor psychology and decision rules
• When options complement real estate and liquidity
• Why to avoid margin and keep position sizes small
• Three beginner steps to start responsibly this week
Connect with Fadi:
LinkedIn: https://www.linkedin.com/in/fadihabib/
Facebook: https://www.facebook.com/fadihabib111
Website: www.Legacywealthbuilderacademy.com
I figured out that a nine to five will not get me where I want.
SPEAKER_01:Welcome to the Five Questions Podcast, where we unlock real estate and business insights one question at a time. Welcome to the Five Questions Podcast. I am your host, Mario Lamar. Our guest on today's show is an engineered, turned educator helping business busy professionals build income with options, the responsible way. Founder and CEO of Legacy Wealth Builder Academy and creator of the growth system. Please welcome Fadi Habib. Faddy, um, welcome to the Five Questions Podcast today.
SPEAKER_00:Hi, Mario. Very happy to be here.
SPEAKER_01:The concept of the podcast, Faddy, is very simple. I asked you five questions, either about business or real estate, in this case, probably more about business in your case, and we get straight to the point. You ready? Ready. Okay. First question I have for you. You spent uh 30 plus years leading in uh engineering, operations, supply chain before moving into coaching and investing. What moment convince you that uh maybe the stock market could be learned by any busy professionals?
SPEAKER_00:Okay, so a couple of things. I started investing from day one because I figured out that a nine to five will not get me where I want. So a very good book to for the listeners to listeners to read is The Cash Flow Quadrant. I read it when I was 20 and I figured out that though I have a really high-paying job, all of my life I had high-paying jobs. I will never be wealthy with uh with the nine to five. So I started with real estate and uh I did very well. Did some mistakes in the beginning, like everybody. Uh but uh I like 15 years ago or 12 years ago, I was totally convinced that any investor who invests in the stock market is an irresponsible investor. Because I everybody was losing money around me. So I thought it's a casino, and it is actually, if you're not if you're speculating, if you're going to gamble, it is a casino. So um the moment I got that actually there is a system, it doesn't have like the fact that everybody's using a knife in a wrong way doesn't mean that the knife is bad. So the stock market is not a casino, though a lot of people are using it as a casino. There's actually a method, there's a way, uh, there are rules that you can apply to not speculate. The fact your attitude, if you're going to the stock market as a speculator, all what you're gonna get is a lot of risk. But if you go as an investor, uh so it's it's it's in the mindset. So the moment I realized when I went to this course to basically prove that the guy doesn't know what he's doing, and I was totally convinced uh after the course that actually, you know what, there is a way. I was open enough to open my mind that there is a way. I took a lot of courses, and um I did very well that the people in these courses told me to come and coach, and this is how it started basically.
SPEAKER_01:It's nice to know that you touch different investment types, and so you know what you're talking about. Uh, you didn't just do real estate and you tried stock markets, and now you can say for sure, with a proper system, it's possible for any busy professionals. You were busy, you had busy uh jobs before, and you did it. So you can now share your experience. Experience, yeah.
SPEAKER_00:And there are investors who do it, like Warren Buffett. He all what he got is 20% per year, but but he had a system. So there's a way, there's a way. And my way of doing it is I don't want to look at charts all day. I I'm not a day trader. I actually believe that day trading is a very good way to lose your money very quickly. So it's not day trading, it's based on the principles of Peter Lynch and Warren Buffett, but also we're doing swing trading. So there is a way to uh do strike this balance between RY as well as what I'm giving into this uh business, the investment, which is basically time and risk, right? I want I don't want to spend a lot of time and I want very limited risk. And you have this balance between RY and risk.
SPEAKER_01:Well, this brings uh us to our second question for you. Uh and you argue that uh the market isn't a casino when you approach it responsibly, and we you just touched on this a little bit. What does responsible option investing look like day to day? Uh, risk limits, position, sizing, you know, all those things, and time commitment for someone that has a full-time job.
SPEAKER_00:Correct. So uh there are different types of investing. There's long-term investing, like Warren Buffett, buys something and waits for 30 years. You don't have 30 years to wait. So that's one way. Long-term investing. The second is swing trading. You go in and out in a week or a month, third is day trading, fourth is the extreme uh case of scalping. You go in and out in seconds. Okay. So for me, uh, day trading and scalping is uh pure speculation. It's really very risky. For me, it's not really that responsible. I want something that is repeatable. Plus the fact that if you go to the scalping and day trading, you need a tremendous amount of time and tremendous amount of skill. So by focusing more on the left part of this quadrant, which is long-term investing and swing trading, you limit the amount of time that you need to do. So I was able to do it with 10 minutes a day. That's it, doesn't need any more once you figure out the system. Number two, you don't want to be a gambler. Responsible means um you can't have this attitude of going buying a lottery ticket and you believe that you're an investor. You're not an investor. A real estate investor has to do some research about the stuff that they're being like you know, you as a real estate investor. If you you can't just buy a property because one of your friends told you it's going up, or one of your friends told me you go buy there, you're gonna ask questions like what is the rent? Is it cash flowing? What is the cap rate? Is the location okay? You you figure out whether it is worthy of your investing or not, and you're very um uh uh you select, you're very discriminatory in terms of where do you put your money and so responsible means you understand what you're going into, the fact that you're not speculating, the fact that you understand risk. A lot of people think that you can get ROI without risk, there's no such thing. So if you go about like if you run after get rich quick scheme type things, if you get rich, if you run after really, really high ROI, you will end up buying lottery tickets. But if you're oblivious about the risks, so actually, in some of the things I do, I don't have um uh I don't have uh stop losses because the type of things that we do doesn't have that much risk. Um the idea is to go into a position whereby if the market goes up, down, or or or down um sideways or down, you're okay with all the outcomes. Okay, but this doesn't happen except when you have a little bit of uh like education about what is a good stock, what is a cheap stock, or what is an expensive stock. So meta at 500 is a cheap stock compared to Blackberry at$3, right? It has nothing to do with price. So um idea of responsible means you're not gambling, idea of uh responsible means that you can sleep well at night, you're not putting your money at risk. Everything, of course, there is risk, but but but you're not putting you're not limited risk, extra risk just to get the high ROI. Responsible means that at any point of time you know that keeping your money and uh preserving your capital is much more important than the ROI that you're making. Yeah, if you just chase ROI, it's just a matter of time where you're gonna lose your capital. And we don't do that.
SPEAKER_01:And at the beginning, uh, when I did your introduction, we talked about the growth system. Uh you developed that. So uh how about we break that for our listeners? Uh, first of all, what do you what is the growth system? What does the letters represent? Um, and you know, how does the framework take a listener that will learn today from today's episode from goal setting to trade selection, entries, exits, uh, you know, all the review stuff?
SPEAKER_00:Okay, cool. So, what I did because I took a lot of courses, uh, when I decided that I'm gonna venture on this and start teaching people, I said, what is it that I need that if I went back being a beginner, what is it that I need? Okay, what is the right frame of mind? Because a lot of people in this space um go after the get rich quick scheme. And there's a lot of ads out there, especially on Facebook, that tells you you're gonna double your money in uh in two weeks or a month or six months. This is just all gambling type stuff. So none of that. It's not a get rich quick. So the first thing is goal setting. Goal setting means if I'm in Toronto and I'm driving to um Florida and it takes 24 hours to drive there. If my goal is to reach there in three hours, this means I have a wrong goal because my goal will dictate that I have to drive at 900 kilometers per hour. Yeah, it's just a matter of time where I will I will be in an accident, right? So this is what I meant by a right goal. The right goal is to set yourself that 24% ROI per year is very good. The market, which is the spy, gives you about 11%, 10, 11. So 24 is double that. So if you can have 24 double the market with limited risk, and you can double your money every three years, that's more than enough. That's really good. So that's goal setting is to change your mind because a lot of people come to me saying 24 is very low. Okay, fine. Then then you go. It just you have no idea how much risk you're taking by adopting that. So that's goal setting. Number two is research stocks. You really need to know how to evaluate the investment that you're buying. You're not buying lottery tickets, you're buying investments. For me, only one to five percent of the stock market, stocks on the stock market is is a good stocks or investable stocks. Blackberry, for example, is not an investable stocks because it loses money. So there's some criteria where whereby you can evaluate whether this is a good stock or not. And we use some screeners so that we don't have, like, you know, we're not gonna read the balance sheet of 6,000 uh uh companies. So we can figure out a list, shortlist, a list of 20, 30 stocks that are good. Uh, part of that as well is figuring out or understanding how to evaluate whether the stock is cheap or expensive. That's important. Third is O, which is options mastery. Options is like Chinese, it's a very new concept for a lot of people, a lot of mechanics. So you need to dwell in it and immerse yourself in it to understand a little bit. There's like 50 different ways of doing options. I focus on just two very simple ways. Understand it. And my method is instead of teaching people, I went to courses like this. You teach 50 different methods and they talk five minutes about each one, you go out of the course, not able to implement anything, right? Because just the breadth. So I focus on just two, but we we we do like ninja like ninja type training. W is about uh went through practice. If you have all the knowledge, but you're not practicing, like you can't really do this by just watching YouTube channels because YouTube will give you the knowledge, but will not give you training. You need the feedback. So uh part of the 12-week mentorship program that I have is that you have to open a paper trading account. Paper trading means everything is the same, it's simulated trading. The just the money, they give you a million dollars, monopoly money. So everything is the same, the prices are the same, everything is the same, it's just not your money. So you're not you can't make money, but you can't lose money. So it's zero, like one zero risk involved in the training. And that's the responsible way of doing it because you will make mistakes. And before you put your money into anything, you need to try it. You need to prove to yourself that you can make money with paper trading before you go and put money. Because if you don't make money with paper trading, meaning I might have been teaching you uh something that is uh fictitious or wrong, maybe you're making mistakes, maybe you didn't understand. So you gotta prove to yourself that you can make money um with the training. And with the training, you get a lot of feedback, and that's very important. The feedback and the structure, the fact that we meet every week in a small setting, um, is very important because it counter like it pushes the learning and the the progress very quickly. Because without feedback, you're in a loop that you're blind. Um T is psychology, very important. Train your psychology. If you don't have a grip between the fear and greed, if you're too fearful, you will do you will do nothing. And same as in real estate. If you're too greedy, you will be in a position whereby you will take something that is very risky. And H is habitual learning. So that's the system. This is all the elements that I do believe will get somebody from absolutely no experience in stocks and options to somebody in three months whereby they're really confident uh about what they're doing.
SPEAKER_01:And with that growth system, you said it's a 12-week program.
SPEAKER_00:Correct, it's a 12-week mentorship program.
SPEAKER_01:12-week mentorship program, and you you you're there showing up with the group, you have discussions, and it's a really uh hand-holing system.
SPEAKER_00:Yeah, it's very hands-on. You can't hide. It's not it's not that I'm gonna give you videos to watch. It's it's uh I have a skills matrix. Again, I'm uh 30 years in operation, so I have a skills matrix, and I'm also a professor, so nobody can hide. So you have to show me that there's some certain skills, like there's something like 20 skills that you need to show before you can prove to yourself that you can go to live trading. And I will show you the skills matrix. Uh, I will mark if you hit any milestone, and I will tell you, you know what, I want to see more of that. Uh and we meet uh one to three hours every week, and part of it is theory, but the fun part is everybody showing their cell phone, showing their trades. And again, there's nothing confidential about it because it's old paper trading. Yeah, and I interview them, I ask them questions, and uh you learn from your mistakes as well as seeing the mistakes. So they go through the program doing about 300, 400 trades, they've seen it all basically by after three four months.
SPEAKER_01:So that brings uh me to our fourth question, and I have a question for you. Uh uh something I want to talk about. You said we talked about gamblers versus investors. Now let's talk about traders versus investors. Uh, how do you draw the line? Um, maybe you can walk us through a recent simple option uh income example that shows you the process, uh, the entry criteria, risk management, and a post-trade review, and how a trader versus an investor would see it.
SPEAKER_00:Okay, so very quickly, uh there's a fundamental difference in trader and investor. Investor will one of the main worries of an investor is is this a good stock or not? The investor doesn't want to buy bad products, investor wants to invest, okay? Trader does not care if this is a good product or not. Trader, all what they're looking at is the volatility of the stock going up and down. They don't care if this is really bad stock because they are not really investing, they are speculator. Okay, so on a scale of investor versus trader, if you go a little bit push the trader more, you'll find a gambler. Okay. So uh uh so so uh that's one thing. Trader is uh looks at very short term investor more of a long term. Uh uh investor wants to like investor, kind of uh wants to marry the girl, trader wants a one night, one time, one one night stack, kind of, right? He he doesn't have doesn't want any relationship with the stock. Yeah, they just want in a very short term, wants to move. Um, the investor uh sticks with um uh a stock even if the price went down because they they believe in the stock. Trader don't. The trader goes out, have stop loss, they don't care, right? So very different uh way. So um uh an investor in my world will not do options except uh except on a good stock. Because worst case scenario, if they if they have to buy the stock, uh they are they can sleep well at night. They know that, for example, Meta, Meta will um Meta at some point was uh$400 in the same year went to$80. Um if you're an investor and you know that this is a good stock, um good stock because Meta is pumping a lot of cash, a lot of profit, revenue is good. You will keep the profit, you're not gonna sell it. You will go and try to get more money to buy it. If you know that$80 is a very cheap price, it's really a bargain, yeah, right? You will go and try to buy more if you know what you're doing. A trader will not do that. A trader will will sell a normal person in the stock market that they they don't have any education, usually their psychology will push them to buy at the top, wait till it goes down, and sell at the bottom. That's the normal, that's the normal person. That's why everybody's losing money because they have no concept of what it is that they're trying to do.
SPEAKER_01:They get scared.
SPEAKER_00:Yeah, investor is very different. Investor looks at good stocks, they know that good stocks will on the long term. Peter Lynch told us there's 100% correlation between the value of the stock and the price of the stock on the long term. So if the company is making money with some criteria that I discussed in the course, it will go up in the long term. So even it went down, that's not a reason to sell, that's a reason to buy more. That's a little bit of a flavor of a difference between trader and investor.
SPEAKER_01:And and you talked about uh meta uh as an as an example.
SPEAKER_00:Do you have another example that you you maybe did uh recently uh that shows you so all one of the myths about the stock market is that uh uh some people expect the stock market to go up all the time. It breathes, it goes. So all the like it doesn't like there's no exception to this, Mario. All the stocks, even if they're a good stock like Apple, Amazon, they go up and down. That's normal. There is nothing normal about exhaling. Like if you think that exhale, like if I look at my kid and it like and he inhales and then exhales, and if I think that exhaling is bad, I will have to go and get a doctor because there's something there is nothing wrong about the company going up and down. In the short term, the stock market is a bunch of drunk fools running around. There's at it's running on sentiment, it has nothing to do, completely disassociated with the value of the company, right? That's why you see bad companies going up or good companies going down. In the short term, there's absolutely no logic. It's it's just uh sentiment and hormones going up and down. In the long term, though, there's 100% correlation for good companies to go up because at the end of the day, we're buying stocks for companies, and companies are businesses, and businesses are evaluated at the end of the day on how much profit they make. That's a business, right? So if a company is making money on the long term, it's gonna uh go up. Don't expect anything from it in the short term. That's why traders, like you know, I I don't like playing the trading game, the trader day trading.
SPEAKER_01:Freddy, uh, we're already at our fifth and final question for today. Uh, you know, a lot of our audience are real estate investors. Uh, maybe for the audience, where do options fit alongside properties or real estate in a balance plan? Maybe you can give us the pros and cons, the liquidity, uh, the liquidity portion, because real estate takes a long time. Uh, is it the same thing with your uh what you're doing, the time involvement? Uh, and then we'll finish off with maybe give us uh, if you can, two, three steps for beginners to take this week that they can start doing this responsibly.
SPEAKER_00:Okay. So uh for me, I do believe that if you are serious about being wealthy, at some point of time in your career, you have to be involved in these three things. There's three different ways, other than the night to five stocks, real estate, and opening a business. You can't do the three at the same time, right? You can't just open the three at the same time too much. So focus on one, get it correct, and then go to the other. So for me, options or stocks and real estate are extremely complementary because they are different animals. Uh, stocks and options are very liquid. Real estate is not. If I have a house or stuff, if I want to sell it, it will stay a little bit on the market, right? Uh options are very easy. I can get money out and in very, very quickly. Um, and the good thing about it is that sometimes the the like the stock market is up and the real estate is down, and vice versa. So all good sophisticated investors I have, they have both, and they can move money from one thing to the other. For example, right now in Canada, there's a lot of the real estate is a little bit like again. I know there are opportunities everywhere, but overall, in in Toronto, for example, it's very high. Some people like sold at the peak and put some money into the stocks, and they have that. Um, the good thing about as well, the stocks and options is that it has this potential for income generation. And a lot of times, especially with high interest rates, the real estate does not have what I had before as positive cash flow, is not positive cash flowing anymore because of the interest rate. So options is a very, very good way to to uh to create this. So um um also one thing I will never buy any real estate without taking a mortgage. So we use leverage in um in in in real estate. I will never use margin or leverage in stocks because it was just the diff, it's a different animal. There's a lot of volatility and it's a recipe for disaster to not use margin. Actually, when you open a brokerage account, they give you about three dollars or two to four dollars for every dollar you give. But I caution people, I make sure that my my students never use margin because there's a lot of market meltdowns. And again, if the philosophy is to preserve your capital, much more important than making money, then we don't use margin because again, I'm not gonna go through the mechanics of it, but it's very risky to use margin. It will amplify your profits very quickly, but you're gonna make a lot of money in the first six months, and then seven months when the market goes down, you're gonna give all the profit back plus the capital. So whatever use margin so that we're in the safe space. Three steps for uh people is number one, open a paper trading uh brokerage account. It's free, you don't have to fund it. Uh, but whatever strategy you learn, start with paper trading. The brokerage that I use, again, they don't pay me any money to say that, but it's called IBKR. You can open it for free and you can train in a paper trading account. They give you a million dollars monopoly money. Uh that's one thing. Number two, go to YouTube and learn uh as much as you can because uh information is a commodity right now, it's everywhere. However, I do not believe that anybody should like you can play with paper money, but you need um the way I say it is that because my father wasn't a billionaire or a millionaire, I have to learn myself. Yeah, so to jumpstart your education and to make sure that you don't make mistakes, because you need to find a good um mentorship program. Don't just buy courses, right? Because courses you need the feedback, you need somebody like I do believe that you cannot learn how to ride horses by watching YouTube channels. You need somebody with you in the stable, you can't learn how to swim by watching YouTube channels. You need somebody with you in the pool. So find a mentorship program that is good. Interview a lot of people, go uh and look and find somebody who can caterpillar your success in a way that is safe. That's very important. Safe. Don't don't risk your money.
SPEAKER_01:Yeah, I I couldn't agree more with you, uh, Fadi. Um I I did it with with real estate. Uh I tried some programs that did not have mentorship built in. It was videos, and you know, you learn on your own. I it costed me thousands and thousands of dollars of mistakes I did. Um other program, I had a mentor that could overlook, you know, the things that I was doing. Hey, uh Mario, make sure you're not doing this. Oh, you forgot about this. Did you think about that? These are the types of uh mentorship programs that are people need, absolutely need, and don't see it as a cost, see it as an investment in yourself to protect you from having costs that are much more than usually the program itself.
SPEAKER_00:If the objective is to do this and you're serious about it, it's a cost, yes, but it's an investment too. Because if you're serious about it, why pay for a course with no feedback? Guess what? I want to tell you this stat. You know how many percent of people, when they buy a video course, they finish it to the end? Only three percent. Yeah. Three percent. So what are what are the chances that these three percent of people will implement? It's almost zero. It's almost zero. So get to a mentorship program because you will not be able to escape. And the fact that there is structure into this, like when you have when you know that you're gonna meet with your mentor once every week or once every month, you you gotta wake up and do what you need to do because you don't want you don't want to be embarrassed in front of the the accountability part, the structure is very important, the structure. So I cannot agree more.
SPEAKER_01:Yeah, Fadi, thank you so much for spending the time to answer some questions today. Your uh your knowledge, uh, valuable, very valuable. Uh, I hope our listeners will take a piece of your knowledge and advice and take them, take it, take it on their journey uh to become wealthy and successful. Thank you again, and uh we'll talk soon. Thank you very much, Mario. Thank you. Thanks for tuning in to the Five Questions podcast. If you enjoyed today's episode, don't forget to subscribe, like, and hit the notification bell on our YouTube channel so you never miss an episode. Stay tuned for more insights and tips to transform your real estate and business games. See you next time.