If You Talk The Talk, Then Walk The Walk

Parent to child;

“You must study hard, spend 6 years in primary school, 4 to 5 years in secondary school, 2 to 3 years to get a diploma and another 3 to 4 years to get your degree before you can consider a professional job. Life is not easy and there are no free lunches. You have to work hard to become rich and achieve your dreams.”

Three days later, the parent signs up for a three-day workshop to become a full-time professional trader on the promise that no hard work is involved, it is easy and you can become a millionaire and achieve financial freedom like it was a free lunch.

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Parent to child;

“Don’t lend money to anyone. People can’t be trusted. When you have money, they all want to be your friend. When you don’t have it, they don’t know who you are. When they owe you, they will avoid you. Never trust anyone with your money because you are never going to get it back”

Three days later, the parent puts the family’s life savings in a leveraged fund with a banker they hardly know who will ask for more investment power later who cannot promise that you will get it all back. When its all gone, the banker doesn’t seem interested to do business with you anymore.

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Parent to child;

“Money is hard to earn. You must learn to spend wisely. Buying things without thinking is reckless and immature. You must plan to buy what you can afford and only buy what you need. You must stay within your budget. Shop around, do your research, wait for discounts and save as much as you can. Don’t just buy because everyone is buying the same thing.”

Three days later, the parent pumps more than 50% of his investment capital into a company he hardly knows anything about. He buys it without researching its fundamentals, he averages up as the stock keeps rising without waiting for a dip and he bought it because his friend had a tip from a friend that everybody else was buying it.

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Parent to child;

“You mustn’t feel bad about losing, son. Sport is about participation and completing what you started. It’s about training, concentration, emotional control and doing your best. It’s about playing by the rules. If you did everything right and you put in 100%, then it is not a loss but a personal achievement. You should be happy and proud about that.”

Three days later, the parent is ranting and raving about losing money in the stock market. He broke his own rules because he lacked practice. He had gotten emotionally attached to the trade and had been living in denial. He procrastinated, was preoccupied with business issues, had become complacent and didn’t concentrate on his stock position. He didn’t take his profit when he had it because of greed and didn’t cut his losses until it was too late because of fear. He was angry because he lost money …but he won’t blame himself.

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Parent to child;

“Don’t believe everything you hear. People like to lie to you and tell you things you want to hear so that they can get what they want from you. The only reason they are nice to you is because they want something. They will lie, cheat and double-cross you just to get what they want. The more convincing they sound, the more they are lying. You must check them out properly first.”

Three days later, the parent jumps into a stock with all guns blazing because there was some news about it. No research was done because the article was written by a ‘credible’ analyst from an established institution. The price target given was so realistically achievable and tempting and the reason for the “Buy” rating was so convincing that Eskimos would have bought a fridge.

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