Young households in the 1980’s were less likely to invest in the stock market in response to the poor market returns of the 1970’s.
As a result these young adults missed one of the best times to invest, The S&P 500 returned an average of 14.9% from 1980-1990
Young households in the late 1990’s were more likely to hold a high percentage of their net worth in the stock market.
They were informed by a hot market in the 80’s and 90’s. Many of them piled into stocks right before the dot com crash, and they lost decade during the 2000’s.
2⃣ Is success a result of skill or luck?
Well, generally if you succeed, you would consider it a by-product of your skills, but if you lose, will consider it as a result of luck.
The truth is any financial failure or success is a result of the combination of luck and skills.
Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort.
They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.
3⃣ Learn to say this is Enough
As humans we have this unending need of wanting more and more, and to keep moving our goal posts. When we reach a certain level, we want to reach the next level as soon as possible.
But this won’t fare good at least in the case of money! Somewhere you’ve got to say this is enough!
Morgen says that “Enough is not too little … ‘Enough’ is realizing that the opposite—an insatiable appetite for more—will push you to the point of regret.”
4⃣ Appreciate the magic of compounding
On 59th birthday, Warren Buffett’s net worth was only $3.8 US Billion.
In 6 years, his wealth multiplied 4 times!
In 12 years, his wealth multiplied 9 times!!
In 18 years, his wealth multiplied 15 times!!!
At the age of 91 his net worth is $87.5 billion. So, his wealth has multiplied by 22 times in the last 32 years!!!!
Because he started early! He started investing at the age of 10 and till the time he was 30 he had amassed wealth of $1 million.
5⃣ Getting wealthy is different from staying wealthy!
Getting more money requires taking risks, being optimistic, and putting yourself out there.
But keeping money requires humility & fear that what you’ve made can be taken away from you just as fast.
6⃣ Don’t be a flashy twat!
You might think you want an expensive watch, a fancy watch, and a huge house, but I'm telling you, you don’t.
What you want is respect and admiration from other people, and you think having expensive stuff will bring it, it almost never does.
Remember “No one is impressed with your possessions as much as you are.”
If respect and admiration are your goal, be careful how you seek it.
Humility, kindness, and empathy will bring you more respect than horsepower ever will.
7⃣ Use money to buy freedom
Money’s greatest intrinsic value and this can’t be overstated - is its ability to give you control over your time.
Using your money to buy time and options has the lifestyle benefit few luxury goods can compete with.
More than your salary. More than the size of your house. More than the prestige of your job.
Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that makes people happy.
Trading is simple but not easy! you can buy or sell in just at the click of a button, but what to buy and when to buy is a difficult ball-game altogether.
95% of people who opt for trading eventually, QUIT!
Keep these questions in mind before losing your capital.
1. Do you have a robust trading strategy?
To be a successful trader, you need a robust trading strategy with a statistical edge — Something that is thoroughly backtested & works in most of the market conditions.
2/10
Let us take the example of Casino, make billions every year.
Casinos don’t beat players because they are lucky, but because the odds are in their favor.
By introducing 2 green pockets, they enjoy a winning probability of 20/38 viz a player’s winning probability of 18/38.
The richest and best traders in the world aren’t trading their own accounts to pay the weekly grocery bill and monthly rent they are managing billions of dollars to grow their clients capital over the long term.
The best traders in the world are under pressure not only to make money every month but also must keep their clients satisfied with their performance.
These top traders not only have to beat the market returns but trade in markets with enough liquidity to execute.
2/12
These traders are in the major leagues of the markets and are rewarded for it. Maximum pressure, big trading size, and clients that demand results monthly and yearly. They are also entrepreneurs as they run firms and manage employees.
Trading for a living is a professional endeavor like any other. It requires a large amount of capital to go full time like other business & the returns are irregular much like being a commissioned sales person.
It is less about trading from a lap top on the beach with a Lamborghini in the garage and more about taking on the risk, managing the uncertainty along with the stress and being rewarded for good trades.
There is no regular paycheck, there are losing weeks, months & years.
2/9
1. You have to purchase medical insurance as you have no employer plan
2. You will be your own boss so you have to make yourself do the needed work of research, screen time, and trading
3. The lower your living expenses are the less you need to make to trade for a living.
3/9