You don't see many startups in the stock-trading industry, probably because us traders have too little time and energy leftover after our daily grind. As a result, my niche suffers from a severe lack of innovation, despite the rapid growth of the Internet and social media -- tools that should be revolutionizing trading.
During my wild ride -- turning $12,415 in Bar Mitzvah gift money into $2 million in four years of college, losing a third of my net worth while running a hedge fund, and landing a starring role in the hit TV show Wall Street Warriors -- I've founded multiple companies aimed at helping educate traders utilizing these new technologies. Education – even for speculators – is so important.
Here are the top three pieces of advice I've received over the years:
- Failure is a prerequisite for investment. While trying to fundraise for my hedge fund, I met one veteran investor who said, "Tim, I love you -- I love your strategy, I love your determination, but I'm not gonna give you any money because you haven't been scarred yet.” I walked out of the meeting thinking he was a crazy old man. I had some success at first, but three years later, after I tried investing rather than trading and losing a third of my fund and all of my credibility, that crazy old man couldn't have been more right. My success at such a young age had made me far too cocky. Now that I've experienced great financial and professional loss, I'm an infinitely better trader, businessman, teacher and person, for that matter. And I don't invest in or hire anyone who hasn't failed in the past, as their education isn't complete.
- Time is money. As someone who talks openly about where I'm putting my own money daily, I am inundated with emails that ask questions and request meetings -- so much so that I turned the demand for my knowledge into a business, where I charge money for my time and guidance. If you've put in the years -- if not decades -- to become a true expert in your field, don't be afraid to charge money for your time, because you've earned it. And if you charge the right price, your customer also benefits immensely. I see far too many people doling out too much of their time for free to anyone who asks because they like being popular and well-liked. Call me selfish all you want, but I prefer being efficient and careful with my time.
- Be humble or the market will humble you, and it will be far more expensive. This is a classic stock market lesson, but it applies to business too -- I've had too much experience with being too self-confident and realizing only too late how much my attitude cost me. When I made millions in college, I thought I could make millions more just as quickly. Wrong! It took a $500,000 loss to help me understand that I'm a far better stock trader than investor. And as much as I want to charge premiums for my time and advice, it's a balancing act to make sure my customers get more than what they paid for, or else they will resent me and my profits. Always remember that customers are the lifeblood of your business, and without their support, you've got nothing.
Timothy Sykes blogs at www.timothysykes.com and is the CEO and Co-Founder of Profit.ly, a community of over 15,000 traders who shares their trades openly and Investimonials.com, a financial product review website with nearly 20,000 original reviews on brokers, newsletters, websites and everything else financial.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.