No One Ever Told Us That: Money and Life Lessons for Young Adults

CHAPTER TWENTY-NINE

DO YOU WANT TO MAKE MONEY, OR WOULD YOU RATHER FOOL AROUND?

In overseeing your own investments, know that there is no one way to profits. There are many ways and different opportunities: real estate, commodities, and collectibles, such as art or porcelain. The ways all demand many approaches. But the internal lesson in investing in anything is this: short-term traders, in my long experience, sooner or later miss the big buck. They miss the big score that only holding for the long term can give you. And what's more, I have never seen a short-term trader, in and out, who did not eventually blow himself or herself up—go broke. But it is in many people's nature to want to speculate, to want to place a few bets for the hell of it. This is why casinos are in business and why gambling is as old as time.

When people open brokerage accounts they are always asked about their risk tolerance. And almost everyone checks the box that says conservative. Then people call and say, “Conservative, really conservative. I'm risk averse before anything else.”

One client of mine was a leading authority on taxes. He traveled all over the world solving tax issues for corporations and governments. About a month ago he called me and said, “I have a business suggestion.”

“Sure,” I answered.

“You should run a second portfolio choice, offer something with more action for people, something a little swinging. I'm just saying…”

“Okay,” I said. “I'm a grown-up some of the time. What did you ...