I hope my latest blog finds you all well 🙂
I watched a tv programme recently about wealth creation and it re-highlighted some of the financial lessons I learnt whilst I was younger. One of the financial mentor’s I resonated most with was Robert.T.Kiyosaki. After reading Robert Kiyosaki’s Rich Dad, Poor Dad book whilst in my early 20’s I quickly realized that in order get into the top echelon of earnings, I had to cleverly think about how I best used my money.
[subscribelocker] For those of you who are yet to read the book, Kiyosaki’s ethos is all around ensuring that you invest your money into assets or money generating items rather than liablities, the money reducing items. The best illustration he used was that of a car. For personal use it costs money to run and maintain and therefore becomes a liability however if you were to use the car as a taxi business it then becomes an asset as it produces revenue over and above the costs of running.
In appreciating and believing strongly in the above ethos, something interesting struck me yesterday whilst going into the local branch of my bank to pay some money in over the counter. As I handed over the cheque I was quickly offered the opportunity to place my money in a ‘high interest’ online savings account. My attention to this was held for all of a few seconds when the cashier confirmed that the interest amount offered was 2.80% annual. It was at this point that it dawned upon me that cash in my bank was in fact a liability for me as a trader.
My monthly (and sometimes daily) % returns on my capital as a trader far outweigh that of a bank (as do many of my peers, colleagues and clients). This is not to say that I am ignorant to the fact that as a trader, your returns are never guaranteed however over time and with confidence in your consistency as a trader, you begin to see returns each and every month which simply cannot be matched by any other asset class.
So the valuable lesson here is to use your money as the best asset you have, and as a consistent, profitable trader there is no better way to do that. Make your money work for you and not the other way around.
I hope to be in a position to write at least another blog before the festive break so until then, happy trading, stay focused, stay disciplined and it will no doubt be a great end to 2011 for all of us.
Have a great week,