Whatever your circumstances are in this economy, it is wise to build resources because you never know what is around the corner of life.
I worked a year ago with a trader named Bob who was once a multimillionaire. Many circumstances such as divorce and business ventures that were no longer viable brought him to a point of being within a year of not being able to pay his bills. The one value we had to work with were the resources he had collected over his many years of being in business such as:
- Friends who were in business and had good connections
- People who invest in a good opportunity
- Knowledge of several industries
- Abilities as an entrepreneur
Bob consistently did well as an investment and swing trader, but when his investment accounts were drained to pay off lawsuits and creditors, we both felt that it was best to put his trading on hold. Within a month, Bob found a situation where he was in charge of building a business, and he is now looking forward to trading again.
Too many times I have seen traders close themselves off from the world; getting comfortable in their own knish and circle of friends. These people are not ready for the curve ball that can strike them out in life.
John was an instructional trader for many years who consistently earned a profit for his company. He was a loner at work and did not cultivate friends in the industry. One year John suffered a series of losses in his personal life. He lost his wife to an illness. His son was having issues with drugs and his mother, who was there to help him with his other children, passed away in the same year.
All of John's losses in life affected his ability to trade. He lost his job and was not able to find another position. John started to trade with only fifty thousand in his trading account. Because it was so different from the tens of thousands he was used to trading and his additional stress, he eventually lost it all. I presently do not know what happened to him.
Ask yourself these questions to know how you would handle devastating changes to your income:
- How much capital do you have to live your lifestyle and for how long?
- What else do you have of value that you could cash in on such as art, gold, etc?
- Where could you cut expenses?
- What family members, friends and colleagues do you have who are in a position to help?
- Who would hire or invest in you?
- What ideas do you have that you could turn into income if you took the time to develop them?
- Where would be the best place to move if you had to?
Good news about Bob. He is now in a position to hire more people and is again earning money as a swing and investment trader.
Collecting resources is an insurance you can give yourself. You never know when a curve ball in life will come. Be prepared.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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