If you want advice on how to make money and how to invest, you’ll find mountains of material online and off.
Some of it’s good, some of it’s not so good, and some of it is so bad it’s dangerous.
Finding good advice in these areas is a big challenge, but there’s even a bigger structural problem.
#1 – There are three essential steps you should take after you start making money and before you start investing that no one talks about.
These three steps are not sexy so you can’t build a sexy “get rich quick” course around them, but they are as fundamental to wealth building as eating, breathing and drinking water.
#2 – Investing money is not an easy way to make money, certainly not as easy as the “get rich quick” by investing courses make it out to be
I know this flies in the face of popular beliefs, but here’s the fact:
Among the world’s top gun money managers, a 15% annual return on your money is considered a home run. Stringing several years like this together is considered a god-like performance.
The lucky money managers who reach these heights WORK with world class resources at their disposal along with good sized staffs of razor sharp people who clock in at least 9 to 5 every day (usually a lot more)
Is it really likely that you’re going to do as well as them or better than them in getting a return on your money?
That being said, it is possible, but infomercial BS aside, it’s not going to happen without a ton of work on your part. And here’s the kicker: even if you are really, really good and work really, really hard, the markets are hazardous places and you can get blown up. It happens to the best of traders.
A better way…
This is why I advise people to focus on creating businesses with customers who come back over and over again to buy.
First, starting a business the smart way (the System way) is extremely low risk. If your first idea doesn’t fly, you can live to try again and again and again until you get it right.
Second, when you get something that works – a body of customers, a solid product, a compelling offer – you’ve got a System that makes money week in and week out.
Third, a business that works can be safely leveraged through excellent marketing. So-so money makers can be tweaked to become cash cows. Cash cows can be tweaked to be Godzillas.
In contrast, traders have to re-invent the wheel every day as markets shift and can make big mistakes in the process. Business owners push product over the counter to regular buyers and count their daily receipts. Having done both, I can tell you owning a solid business is a much better deal.
There’s a another big problem with the “get rich quick” investment courses.
Generally, I don’t believe in the “it takes money to make money” philosophy. There are all kinds of way to get started making money with just the spare change in your pocket and if you can’t do it at that level, you probably won’t be able to do it with a lot of capital either.
However, I do believe there is one exception to this rule: trading.
You need ample money to trade and that money needs to be calm and patient money in order for it to get the best results. Taking too small a stake to the market and trying to make your rent with this week’s trading opportunities is a recipe for disaster.
When I was a young guy with no money just getting started I really didn’t want to hear this. It seemed downright un-American. How come only guys who already have money have all the odds stacked in their favor when it comes to trading? Shouldn’t the little guy be able to make smart moves and leverage his $1,000 into a million?
It might happen, but more people win the lottery than pull that off.
The correct sequence is make money – save money – save even more money – put the bulk of your savings in bullet-proof, bomb-proof instruments (like short term Treasuries) – and then take a small piece of your net worth to the markets and make small bets with it.
None of this prevents you from studying investing, paper trading, and maybe even taking micro-positions now to learn how things really work while you’re building your stake, but the idea of “on the job” training in the markets with thin capitalization and no other serious source of income is just not optimal.
And yet, all the “get rich quick” through trading courses are essentially recommending this approach. Great for the course sellers, not so great for the course buyers.
Build a business. Make that business great. Take cash off the table on a regular basis and stack it up in Treasuries. Then take a small piece of that and roll the dice – if you must.
Get rich slow.
Follow the sequence that’s worked over and over again for the people who’ve actually gotten there.
If you really think it through and talk to lots of people who have “made” it, you’ll see that that’s the way it’s done.
P.S. The System Seminar is alive and well but only for members of the System Club. We’ve taken the annual seminar and spread it out over the entire year and put it behind a private firewall.
Easier to digest, more convenient, and a whole lot more affordable: System Club details are here.
– Ken McCarthy
P.S. For over 25 years I’ve been sharing the simple but powerful things that matter in business with my clients.
If you’d like direction for your business that will work today, tomorrow and twenty years from now, visit us at the System Club.