Happy Monday,

Angelo here! Welcome to New Money, where we go over weekly tips to help you build your wealth, one dollar at a time.

Today’s edition:

• How crashes actually build wealth

• The crash pattern you should understand

• Meta expansion, Bitcoin outflows, and more…

Read time: 2 min 40 seconds

🍎Wealth Tip of the Week

At some point in your investing life, the market will drop.

Not maybe. Not possibly. It will.

And when it does, nobody will send you a calm, reassuring email.

Instead, the headlines will start getting dramatic. Your friends will text you asking if they should sell. Your social media feed will suddenly be full of “experts” predicting the end of the economy. And when you open your portfolio, it’ll be bleeding red.

And you’ll be forced to make a decision:

Sell… or stay.

This is where wealth changes hands.

Here’s how to be on the right side of it.

1. Understand the Pattern

Every crash feels different when you’re living through it. But zoom out far enough, and the pattern is always the same.

Over the past 150 years, there have been 19 major bear markets. Some were mild, some completely devastating.

The Great Depression wiped out 79% of the market. The 1970s inflation crisis cut stocks in half. The dot-com bust and financial crisis dragged on for over a decade.

The causes are always different, but the structure is the same.

Here’s how it plays out (almost) every time:

Phase 1: Euphoria.
This is when everything feels easy. Stocks keep going up. Everyone suddenly has an opinion about investing. Your group chat is talking about which stock is "next." It feels obvious. It feels safe and you actively feel the FOMO creep in with every post about a “10x return” you see on your for you page.

Phase 2: The crash.
Then reality kicks in. Prices start falling. The news gets dramatic. People start panic. You open your portfolio and it's red… again. What felt safe a few months ago suddenly feels terrifying. Anxiety, denial, panic, then anger. Waves of emotions until you reach a tipping point to where you enter extreme fear and panic sell.

Phase 3: Recovery.
Slowly and usually when most people least expect it, things start turning around. The panic fades. Prices start climb back, yet you are in disbelief that the worse is behind you. And eventually, things start to level out and you are back to phase 1.

The only thing that changes is how long each phase lasts.

2. Build Cash

The first thing you need to do is strengthen your position. That starts by cutting back on things you don’t need.

Here's what always happens: During the crash, prices drop. During the recovery, smart investors who saved cash get to buy everything on sale.

In 2008, people who had cash sitting on the sidelines bought stocks at 40-50% discounts. Four years later, those investments had doubled.

When your favorite store has a sale, you want cash in your pocket. Same thing here.

Every dollar saved today, is ammunition to buy your wealth tommorrow.

So during uncertain times, focus on strengthening your base:

• Trim unnecessary expenses

• Pause upgrades and impulse buys

• Make sure your emergency fund is solid (3–6 months minimum)

• Keep extra cash in a high-yield savings account so it’s earning something while you wait. 👉 Start earning here

Recessions reward people who have flexibility. Cash gives you options. And options create opportunity.

3. Keep Investing

When your portfolio is down 20%, your instinct is to “stop the bleeding.” That’s normal.

But here’s what history shows over and over again:

The biggest up days in the market usually happen right after the biggest down days.

If you panic-sell during Phase 2, you almost guarantee you’ll miss Phase 3.

For example, if you invested $10,000 in the S&P 500 between 1980 and 2026, you'd have over $1 million.

But if you panic-sold and missed just the 5 best trading days, you'd only have $671,000.

If you miss 50 best days, you're down to $76,000.

The difference between $1 million and $76K is panicking at the wrong time.

That growth didn’t happen smoothly. It happened through recessions, crashes, wars, inflation, and panic.

That’s why I keep investing. You only reach it if you stay in the game.

Here’s another trick:

If you struggle with emotions to do this manually when everything's red, the simplest solution is automation. Set the same amount every month and take the emotion out of it.

Here is a link to a tutorial I made on how to do so.

4. Stay Calm

The hardest part of investing isn’t picking stocks. It’s controlling your emotions during the crash.

You can’t control the Fed. You can’t stop the market from dropping 30%. You can’t silence the headlines.

The only thing you can control is whether you panic. And that’s genuinely hard.

When thousands of dollars disappear from your portfolio, every instinct wants to hit “sell all.”

But here’s something wild: Fidelity once found that some of their best-performing accounts belonged to people who were either dead or forgot their passwords.

They beat active traders because they couldn’t panic-sell during Phase 2.

And the pattern keeps repeating:

• Phase 2 (The Crash):
  Typically lasts about 9–10 months on average, and during that time it feels painful, everything is red, and it can seem like it will never end.

• Phase 3 (The Recovery):
  Phase 3 lasts about 2–3 years on average, during which the market rebuilds and eventually pushes past its old highs.

If you look at what’s happened in past crashes, the story is always the same.

2008: The market crashed. People panicked. Given some time, the market eventually fully recovered and moved even higher.

2020: The market dropped 34% in a month. By the following year, new all-time highs.

If you can hold through less than a year of pain, you get multiple years of gains.

Recessions don’t destroy wealth. They transfer it. The market will drop again in your lifetime.

That’s guaranteed. But so is recovery.

The only question is: will you still be invested when it does?

Hit reply and tell me what you're doing during the market crash.

💬Quote of the Week

📉 Market Recap

Check out some of the biggest stories shaking up money, markets, and momentum this week.

• The Fed is pressing pause on rate cuts as it watches inflation closely

• Meta is betting heavily on AI as it continues to buy more chips from Nvidia

• Berkshire invests $350M in New York Times while trimming Apple and Amazon

• Bitcoin ETFs bleed $133M in outflows as market fear deepens

👀 In Case You Missed It

If you want to be rich, watch this before you obsess over the wrong things.

 🌱3 more ways I can help build your wealth

P.S. My goal is to help you create structure around your money. When you automate the basics and know your numbers, managing your finances gets easier and building wealth feels less overwhelming.

See y’all next week 🫡

- Angelo Castillo

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