Note: This is the last lesson that will focus on preparing you mentally for social trading, from next lesson onwards, we will deal with the actual formation of strategy. However, this is one of the most important realisations you will ever need to accept. Failure to accept this is why many people fail. They lack the patience to endure till they succeed and I feel that is because it is never numerically presented to them just how much is at stake.
Be disciplined. Everytime you feel like breaking your routine or being greedy, read this:
There is a very famous and perhaps overused saying, “Rome was not built in one day”. You cannot expect an amazing achievement to happen instantaneously under normal circumstances. Unless you win the lottery out of sheer luck, chances are that any wealth generation achieved by yourself will be the product and result of hard work, persistence, patience and time invested. You have to understand that investing is not usually a get rich quick scheme. Unless you get in as one of the first large equity holders of a current start-up that is the future equivalent of Google or Microsoft, you are very unlikely to make a fortune from a small amount in a very short period of time unless you are realistic with your goals and aspirations.
I have posted this before under the page on my blog called the compounding effect. But I feel it is important to say it again as most of the reason why people fail is that they deviate from their plan or strategy. The most common reason why they deviate is quite simply because they run out of patience. They want it all now and they fail to understand how unreasonable that is.
Many people see a 3% gain as small and trivial but what they do not realise is that a consistent 3% gain two times a week (weekly gain of 6.1%) translates to a colossal gain in a short period of time. In my opinion one of two years is not a tremendous amount of time. It is shorter than the average person will invest in getting a bachelor of science from a higher university for example. Let us look what can happen in two years if one maintains these consistent performances:
Take a character called James Smith. James has $1000 spare money (Lucky James). Assume that he were to achieve the sort of returns that we mention above, how much would it be worth?
After two years, he would have:
$1,000 x 1.03^(2*52*2) = $1,000 x 1.03^208 =$467,888.
After three years, this changes to:
$1,000 x 1.03^312 = Over $10,000,000.
Please take a moment to think about this and then tell me, is it better to be patient or is it better to rush? There is a reason why in this game the Tortoise will always beat the Hare. If you think its impossible, look at my history.