We’ve all heard stories about the long shots that pay off, or the Horatio Alger stories about getting rich and the stock market has no shortage of those tales. There are noted men and women who have started with portfolios of $5000 or less, and parlayed that into millions by carefully planned trades. There’s even one guy I know personally who took matters into his own hands after his “expert broker” lost all of his money, and turned the shattered remains of his portfolio into a $33 Million juggernaut in three years. All of us would take those kinds of returns any day.
So what made him or anyone like him different from the average trader? Seriously, the news is full of stories about retirement accounts being plundered and squandered, about normal every day working people who lose everything in the stock market and now live with the very real fear of living out their retirement only being able to afford a can of tuna fish per day. Or worse, subsisting on a sixteen cent packet of Raman noodles!
The difference is anybody who wants to invest in the market should take control of their retirement account, should take control of their money instead of turning it over to some idiot MBA who thinks they are an expert because they could write an essay or pass a final exam. The difference is modeling your success after people who lost a ton of money by following the “experts” advice, and beat the market when they took control of their own financial destiny.
If you’re willing to turn your money over to someone else to control, then you get what you deserve. Are there honest brokers and fund managers out there? Yes, but finding out who is going to take as much care of your money as you will requires a ton of research, and constant diligence. If you’re going to have to do all of the work to just find someone you can trust, why don’t you turn it into researching a good company, and controlling your own money.
You don’t have to be a diligent day trader looking to earn hundreds or thousands of dollars every day playing the dips and rises in prices. You can be a long term investor, picking companies based on your research and waiting for a return down the road.
But again, if you’re doing the research, and with the tools available to you today, why not try to turn your portfolio into something larger? I know a teacher in Arkansas who made $24,000 per year, who invested in the market, played it carefully and followed a plan, and turned his $1000 initial investment into enough to build his dream home in the country, completely paid off. He then took out a half mortgage for high risk stock speculation, but kept his original portfolio to generate enough returns to cover the cost of the home, plus all living expenses. All the while continuing to teach American history to ninth graders.
So what made this teacher different from you? What was his secret? He did the research, he took control of his own financial destiny, but the number one thing he did to set himself apart from the masses is, he took Action. You can know about the market, you can know historical trends and technical analysis. But unless you are putting your money out there, you will never make a return. The key to success in trading, both long term and short term, is taking Action.
If your money sits in a money market account, you will earn a small percentage that will grow over the years. You could be okay with that type of investment. It may mean that you can eat a can of tuna AND Raman noodles when you retire. Or you could invest a little time in your education, and learn how to play the market correctly and carefully. During this economy, people are looking for second jobs to make ends meet, or even first jobs because of layoffs. Trading stocks can be a very rewarding job, if you’re willing to take the risk. You control your own finances, you control your risk, you control your reward. The number one secret of the most successful traders is taking Action.
