You are the horse in the race – how?
I am blessed to be able to speak with some amazing people about the stock market. I welcome questions and messages about trading from people. In this episode, I want to address a common thread and mindset I see in these conversations that I believe can help you reach your financial goals. I was thinking about horses, and really when you get down to it, you are the horse in the stock market race.
If you were at a racetrack, are you seeing yourself as being in the race? Or are you in the sidelines, not even in the game? I want you to see yourself not only as being in the race, but being the horse that you would bet on to win.
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1. The horse that doesn’t want to put the time in
Some of the most common questions I get are: “Is the stock market real? Can it work for me?” The answer of course is yes, it’s real and yes, it can work for you. I get so excited when I talk with people and see the fire they have to attain financial freedom. A lot of people want to replace their 9-5 income, attain their dream house or car, have the option to work or not, or be free to do what they want. That is their version of wealth. I have realized in conversing with people, there are things that will prevent people from seeing real success unless they make fundamental mindset shifts.
For example, I was talking with a very nice young lady who was referred to me about her goals and how she wanted to attain wealth. When I speak with people, usually the three basis that tell me everything I need to know about your goals are 1. how much money you have, 2. how much time you have, and 3. how much knowledge you have. So I am getting all excited speaking with her and wanting to see how to achieve these goals she has… but I come way down from that high when I ask her what her game plan is to attain wealth and her response is “I’m willing to learn about the stock market, but I do not want to put that much time into it”. Right there a red flag goes up for me. Because when you think about it… how many people who have attained wealth said they didn’t put a lot of time into it? Unless they win the lottery or something, not putting a lot of time was definitely not part of the equation – they had to work on their craft or whatever they were investing in.
So that is one of the horses that is out there… the horse that doesn’t want to put the time in. Let’s say you have a health issue and so you got to go to the doctor. You do research on different doctors and surgeons and you see how long they’ve been doing this, why are they passionate about it… what if the doctor says, “Well.. you know I just took some courses at the local college because I really didn’t want to put that much time into it. So I didn’t really do medical school or a residency. I just wanted to see if I could save some lives”. Immediately you would be like “Thanks, but no thanks”.
It sounds crazy, but the point is, when it comes to your health, you would never accept a “horse” or a doctor that didn’t put the time into it. But yet, when it comes to making money, which is a difficult situation to create wealth, some people do not want to put time into it.
There are some solutions for you…
Ok, so you don’t want to put time into it. So now you need an accelerated learning process, and let me tell you that doesn’t come cheap. Now you need the best software, education, tools, and expertise to speed it up.
If you don’t want to put the time in, then you need to have money to put into it. A lot of the time what I find though, is the horse that doesn’t want to put a lot of time in also doesn’t want to put a lot of money into it.
2. The horse that doesn’t want to put money into it
There are horses out there who are willing to put some time into it, but do not want to put money into the learning process. Can you imagine going to the horse race and someone wants to race their horse, yet is unwilling to get the horse decent horseshoes? Or refuses to get the horse the best food? Doesn’t want to get a good vet for the horse? Because he doesn’t want to spend the money. That horse will not win the race.
So when someone says they want to be financially set, but are unwilling to put money into it… what is financially set to you? To me, it is being able to replace your lifestyle income.
One of the comments I have gotten is that someone will want to make $100,000 a year, but only has $2,000 to start with. Here’s the thing, I am not saying that with enough time you couldn’t do that. But most people come in do not want to put the time into it and they also do not want to put money into it. These are two strikes against you.
I want you to write down the Three R’s of Investing:
Realistic Rate of Return
You need to be able to find out how to create a realistic rate of return from the market. So for the comment of wanting to make 100 grand and starting off with 2 grand, you would have to increase that by 5,000%. Not only that, you would need to do that year after year. The reality is, when you are trying to increase by this much, does that sound like a realistic rate of return?
If you are willing to learn, but you’re not willing to put that much time into it, you need to have money to make up for it and speed up the process by getting the best knowledge and resources. But you also need trading capital to be able to meet the 3 R’s.
3. The horse that doesn’t want to work
Another comment I get is “I am willing to invest, but only if you can guarantee that I never loose any money”. First of all, I am not an advisor, so I am not the one investing for you and therefore would not be the person to guarantee never loosing any money. If someone does make that guarantee to you, you should run. Because secondly, there is no such thing as no risk in the stock market. This is not a typical job, you could do everything right in your trade and the market could have something go wrong in the world that could disrupt what you thought should happen.
That is like showing up to the horse race asking if the horse race is rigged and how to find the guaranteed winner. This doesn’t last – that is insider trading and you do not want to be on that team. Insider trading is where you gain some years in prison and is not what you want.
I hear it too often – “I just want to give my money to someone and let them invest for me”. Here’s the problem with this one: most financial planners, not all but most, are sales people. These advisors are sales people which means the majority of the time, they don’t know how the market works or they are not the ones who are actually picking the stocks that go into the fund or portfolio that they sell you. Their job is to sell you on bringing your money to the firm, and for that they get a commission. Their goal is not for the fund to do well or to make you money, their goal is to match what you told them with a fund.
One time I went to a company and went to their seminar and I told them I wanted to be wealthy, asked them how much to invest with you, and the guy told me you need $250,000 for us to even talk to you. They didn’t even deal with clients less than that. No one is out here to make you wealthy. The people who know how to do it, you need to have enough money for them to invest for you and have enough that makes it worth their while. Like if they got 1%, you need to have a million bucks for them to even make 10 grand. You are not bringing enough to the table to make them enough.
What horse are you going to have to be?
What is a realistic rate of return that you can get for your money? What horse will you be – are you going to have to be the horse that puts in the time, the horse that comes up with a ton of money, or are you going to be the horse that goes and gets the knowledge in order to grow your own money?
Really these are different combinations. The best horse is the one that has all three characteristics – they are willing to put in the time, willing to invest money in order to build their account over time, and want to put in the work to get the knowledge so they know what they are doing.
Which combination can you build? Are you going to be the person who has a lot of money but you don’t have the knowledge? I see this all the time – smart people like lawyers and doctors who loose money because they don’t have the knowledge themselves about trading.
Then you see people with the knowledge who do not have the money. Or those who have the time and money, but don’t use their time wisely in order to use it to learn how the market works.
What horse are you right now and what horse do you need to become in order to win this race and get on the other side of financial freedom? Please let me know where you are at by commenting below or contacting us.