 Good day fellow investors. There is so much talk about stock market crashes, economic collapses, currency collapses and I want to tell you a crash would be great for you. Now you might consider me crazy but I'll show you, I'll give you a mathematical proof by the end of this video how any kind of crash with stocks, with other assets would be a great thing for you long term and you would be better off to quote Warren Buffett whether we are talking about stocks or stocks I like buying quality merchandise when it is marked down. Despite Buffett's logic it's really hard to think that when the stocks you own go down you should be happy because everybody's happy when stocks go up. When I see a stock that I bought go up 20-30%. I see the excitement on my stock market research platform everybody saying goodbye, goodbye but actually you should be happy when your investment goes down and I'll show you why in this video. Let's start. Let's take a simple example of the SAP 500. To make things easier let's assume you only own one stock. One stock of the SAP 500 and your portfolio is $2,839.21 which was where the SAP 500 was when I was writing this article. That's all we have one stock of the SAP 500. The dividend yield of the SAP 500 is 1.94% and the trailing dividend in points if you compare it is 55.23 SAP 500 points it means that you get a dividend of $55.23 for each share of the SAP 500 you own. Let's now make two scenarios one where the SAP 500 grows constantly for 7% per year over the next 10 years so just up up up and up and the other scenario when it drops 30% in 2019 to 1940 points and then it stays flat for the next 10 years and you will say okay Sven this is really crazy but stick with me you will see at the end how you end up better when there is a crash. One scenario SAP 500 crashing to 1940 points 30% forum the current level and the other scenario is where the SAP 500 grows at 7% per year and this is the result so if the SAP 500 would crash it would go to okay in this case 1900 below 2000 points and stay there if it would continue to grow at 7% per year it would go to $5500 in value for one share. I cannot even imagine the panic headlines produced by the media outlets if the market would crash 40% during this year nevertheless we should all be happy if that would happen and here is why now the key when it comes to being happy about crashes is a dividend so you reinvest that dividend and if you do it now you get 0.019 of an imaginary SAP 500 share however if the SAP 500 is down 30% and below 2000 points at 1940 points then you get 0.028 of an imaginary SAP 500 share and this difference over time makes the difference between an investor and a speculator and over time owning more businesses thanks to higher purchases when you reinvest the dividend leads you to higher returns in the long term let's dig into the mathematics so this is the value and number of shares after growth of 7% per year and reinvested dividends so after 10 years you have 1.21 shares of the SAP 500 for a total value of $6771 however if the SAP 500 crashes 30% doesn't grow for 10 years and stays below 2000 points up to 2029 you end up with 1.45 shares of the SAP 500 for a value of 2900 the total dividend on your 1.46 shares with 5% estimated dividend growth would be 140 now the comparison is between $6771 with no crash and only growth and $2,900 for the portfolio with a 2019 crash and no growth so you must be thinking Sven you might be well educated but this is idiotic 6,700 is much better than 2,900 so why would a crash ever be better now here you have to answer one question are you an investor or a speculator are you happy when the prices of what you own go up goes up or are you happy when what you own becomes bigger bigger and bigger when you own bigger parts of a business when you're more shares of a business where the dividend yield is higher and you can buy more more of the good things you are if you are a speculator then you are always basing your future your financial future your retirement on the valuation of the market on the market and the market in history has been crazy it is irrational so it is just paper gains you have to sell now to get those gains but you're always thinking if I sell now it can go higher so you are not really an investor you're a speculator I cannot help speculators on this channel so if you feel like an investor if you are like Buffett that likes owning businesses then stick around and please also subscribe let's go into the mathematics of how even investors do better than speculators now let's imagine that in 2030 so in the 11th year the SAP 500 in the growth scenario crashes 40% and the SAP 500 in the no growth scenario with the crash in 2019 jumps 40% in 2030 the result for both investors with reinvested dividends is equal 4060 or 62 dollars so given that it is impossible to predict how will stocks move except that the stock market will fluctuate to quote JP Morgan I firmly believe one should be happier when stocks go down than when stocks go up because it allows you to buy more of what you already own so when goods things are marked down you buy more and perhaps the most important thing our little 2019 crash portfolio would have a dividend of 141 dollars in 2030 because we own more of the SAP 500 thanks to the reinvestments and the 7% percent constant growth portfolio would have a dividend of 117 dollars in 2030 this might look like an unimportant difference but the difference between a dividend of let's say 141 thousand per year and 117 thousand per year when you retire might make the difference between you having to sell stocks to finance your retirement or having the opportunity to cover all your costs and not having to sell anything so if you wish for a better future you better own more that will lead to higher dividends yield in the future which might be enough for your lifestyle so you don't have to sell anything because when you start selling your nest egg the dividends in the future get lower lower and lower and lower and the compounding actually works backwards so whenever you see a stock market crash happening if you own good things you should be happy because over the long term you are better off because you can reinvest those dividends and this video doesn't even touch what 99% of people do which is constant monthly investments your employee employer gives contribution you invest in your 4 on 1k or something so you are investing on a monthly basis so you should hope for a crash of 80% invest on cheap valuations for 30 years and then just in the year you retire nothing you just enjoy the huge dividends you have accumulated by reinvesting at a high return on capital so the next time you see a crash the next time you see a headline panicking how did something crash so much or so much don't worry buy businesses buy more of those businesses and actually be happy because you can buy more when there is a sale and this is typical my wife whenever she comes back she says oh look at this purse I got it at the discount and why aren't we investors also so excited when we come home or when we are home oh look I can buy this stock at the discount yeah I can reinvest my dividend at the discount so perhaps it's hard to grasp at the beginning but if you focus yourself on becoming a value investor you will see how you will become excited when stocks drop instead of when stocks go up looking forward to your comments please subscribe if you like this month's mindset and I'll see you in the next video