Today I’m going to speak about your capital.
Your broker account, your trading account, whatever you want to call it. I prefer to call it my wealth account.
After going through some traders’ accounts over the past couple of days (Watch Video Here 19 mins), because we’ve got this program called DOUBLE YOUR ACCOUNT Challenge within the Tribe of Traders, and there’s a lot of traders doing really, really well with that challenge.
But with that, that means I go through a lot of accounts, it led me to think that there is a perception, I’ve noticed amongst traders that once they put the money from their own bank account into their trading account, it’s almost like it’s spent money.
I thought about it a number of months ago and I discussed it with our traders in the Tribe of Traders.
I think it’s something that’s really big with traders.
I believe it’s because it leaves their own account and you put it into a broker account.
It’s left your bank, and I think there’s a dissociation that happens with that.
So I’m going to suggest that you shift that perception.
That you essentially are moving it from one bank account or one wealth account to another.
I would assume as wealth builders and I strongly, strongly suggest that you view yourself as wealth builders rather than traders.
I would assume that you are saving money every single month.
Because that’s your first rung on the ladder to wealth building is building up cash, okay?
Build Cash resources, that’s your first step to wealth building.
So before you get into trading, just make sure that you are putting aside cash savings every single month.
Whether you work for yourself or you’re employed. Whichever way it is, that at the end of every month, the first thing you need to be doing is paying yourself first before you do anything else.
Before anything else leaves your account, you must pay
yourself first.
Now, if you’re employed and you get your salary into your private bank account, the way in which you’re going to pay yourself first then is you’re going to take minimum 10% of that and put it into savings.
Listen, if you can’t manage 10% right now, something, okay. If it’s like 5%, or whatever it is, just the physical act of taking it from your account and putting it into a savings account is a massive statement of self-worth.
It has a massive impact on you.
And then commit to every three months just increasing that amount you put aside by just 10%.
So if you put aside £50, and then in three months, increase that £50 by 10%, so put aside £55.
The practice of doing that, the discipline around doing that and the self-worth that that builds for you in that you value yourself enough to pay yourself first has a tremendous impact on your relationship with money and with wealth.
Because at the end of the day when we’re trading, we’re trading money, right?
That’s it. We’re in the business of money.
That’s what the market is. $5 trillion a day market of money, moving money.
But yet so many people have seriously, like on a cellular level, seriously, seriously deep issues with money and also wealth.
That is the simplest, most powerful way in which I think you can start to repair and build your relationship with money, is paying yourself first.
So before you even get into trading, make sure you’re doing that.
I mean that’s just level one on the rung of the ladder to wealth building. Okay?
If you’re not doing that first, in my opinion, that’s a mistake.
The second is, shift your perception around when you move money from your own bank account into the broker account.
One of the sad facts is that you do get some pretty rogue brokers out there, but there are a lot of really good brokers.
So one of the important things about trading as well, because following on from what we discussed on Monday and yesterday inside the Trading Community, we dived deep into this topic of treating your trading as a business.
One of the important aspects of treating your trading as a business is actually doing your due diligence.
So when you’re selecting your broker, make sure you do due diligence and that is not one of the rogue brokers and in actual fact it’s one of the reputable brokers.
Make sure you’re confident with the broker that you’re putting your money into. Make sure they are regulated.
Now within the Tribe of Traders we work with brokers that are not only just reputable.
Have strong balance sheets.
But also have insurance that protects your account over and above the regulations.
Like for example, in the UK with the FSCS that protects to a limit of about £50,000.
Whereas the insurance that we have working with the brokers have up to £500,000, to a million, protection on your account.
So if that’s what you need in order to feel that you’re moving your money from one safe haven to another, rather than it being from one safe haven to being spent, and when I say spent, I mean so many people feel like it’s written off, the moment it leaves their account, goes into the trading account, they feel like it’s written off.
If you have a healthy relationship with money, if you respect money, that is not how you will be with it, that’s not how you’ll be with money.
You will always, always value your money.
And so therefore wherever you put it, you will make sure that you’ve done your due diligence.
Now listen, sometimes things happen that are beyond your control, and things happen and companies go bang and whatever, that happens.
But if you’ve done your due diligence, you’ll lower the risk, you’re mitigating as much of the risk as possible.
So money that you’re putting into your broker account, that is your seed capital for your wealth building. Okay?
So you need to make sure to do whatever it is that you can to maintain ownership of that.
And it’s not spent, as a lot of traders seem to feel, once it goes into their account.
What the difference is, and this is quite big.
From what I have learned from working with so many traders from all over the world, is that it’s almost like when traders move the money from that bank account and put it into the broker account, they’ve lost relationship with the money as it is, and they start looking at what it can give them ultimately.
So looking at, trading that’s going to make them wealthy, they’re going to make millions.
They’re going going to make multi millions.
So that’s what they become focused on, instead of the journey between where it is and what it is now and where and how it’s going to be consistently growing.
There’s a bit in the middle that is missing for a lot of traders.
Let me see if I can actually say that a slightly different way.
And that is, look at the capital that you’re putting into the broker
account and be clear about the growth journey that money is going to
take.
Just because you put it into the broker account, it doesn’t mean that automatically by some mystery of miracles it’s going to now be the multi millions that you have a dream of that you want to have.
Now, I go into finding your number of what it is you want to achieve in your trading, I’ll go into that over the next few days because that’s very important, getting very clear on a number that’s really, really real for you, that you can relate to and is not a fantasy, that’s very important.
But that’s for another day. We’ll cover that probably next week.
But right now I want to talk about the money in your broker account.
What I would love you to do is to take a look at the money that’s in your broker account.
Shift your perception around it.
It’s not spent and it’s not going to miraculously just all of a sudden be the millions that you would love it to be.
And I think because it doesn’t within a very short timeframe, because it doesn’t instantaneously look like it’s going to be giving them the millions. It’s a naturally very slow process!
That’s when the sort of hope trading, gambling trading, starts creeping in to your behavior.
So with that seed capital that you have in your broker account, document the journey that that money will take.
Because if you understand the laws of compounding, it’s a very, very slow journey.
And we way underestimate the impact of our daily actions on the long term effect.
So we fall into this trap so often of wanting the macro now and the micro of not doing the work, we need to work the micro in order for the macro to happen.
Let me reword that. So we fall into the trap of wanting our end goal urgently and fast and it must happen quickly.
But yet we’re slow about taking the actions that are needed to be done consistently over time to make that a reality.
So I hope that makes sense, but that’s an important concept. It’s very, very, very important.
And it boils down to not having a complete understanding or grasp of the power of compounding.
And one of the things that I loved about Darren Hardy’s book, The Compound Effect.
If you haven’t read it, as a trader, please go and read it. It’s amazing.
And one of the things that he says quite a lot in this book is, the small things done over time has the biggest impact.
But here’s the cracker.
It’s those small things that are needed to be done over time, that are the hardest to sustain.
Why?
Because you don’t see the result.
So it’s a bit like the Chinese bamboo.
What takes five years of nurture and care, consistent nurture and care before it even shows a sprout from the ground.
But once it does, pop, it compounds and it just flies.
It grows to meters in no time at all.
So what I want to get across today is that shift your mindset around the money that’s in your trading account. Okay?
It is your seed capital for your wealth building.
Do the due diligence about the broker that you select.
And there are brokers out there that offer actual insurance for your account.
So obviously, number one, make sure you go with a regulated broker, okay?
That goes without saying.
And in the UK, I’m not sure about other countries, but in the UK the first 50,000 of a regulated broker is protected.
Now the problem is once you get beyond the 50,000 that’s not protected for governance and on a institutional level.
But many brokers have additional insurance that protects your capital.
As I mentioned earlier, with the Tribe of Traders, we have different brokers, some protect to 500,000, some to a million.
So make sure you do your due diligence and select a broker that you can trust. And that is not causing you to dissociate and almost write off the money, right?
That’s your seed capital.
That’s in your broker account.
The other thing is, document the journey that that money is going to take. When that money is in the account, in that broker account, that is your seed capital that is slowly over time going to compound.
Document that journey. Understand the numbers…
Because psychologically we see that money as being our millions from our trading and we want it now.
If you document and can see clearly and accept that the trades that you do today, the trades you’ll do next week.
The trades you’ll do next month or next year, even the year after is what will bring the wealth… It’s not going to show you your end results today tomorrow,next month or next year…because the difference is so small.
Because the laws of compounding is that it requires the small things done consistently over time to have the biggest impact. And it’s those small things that are the hardest things to sustain.
So let go of the longer goal with that money.
Yes, sure, you have a bigger goal.
You’ve got whatever that number is that you’re going for in your trading.
Have that as an ultimate goal.
But that money has to earn the right to get there and you have to do certain acts in order for it to get there.
You have to trade in a certain way to ensure successful trading consistently over time.
Now, I spoke about it yesterday in the Trading Community Facebook group .
If you didn’t check it out, please go check it out, it really was powerful, how powerfully you shift your approach to trading when you treat it as a business.
So if you didn’t see it, go and check it out in the Trading Community.
If you are not a member I strongly urge you to join the group, it’s a free group, amazing traders and support as well as valuable training. It’s amazing.
I do amazing teaches in there on a Tuesday and a Thursday where I go actually deeper into the topic of what I’m talking about in these blogs, and I go way deeper in the Trading Community.
So make sure you join the Trading Community. As I said, it’s a free group and every Tuesday and Thursday at one o’clock UK time, I go deep into the topics.
So tomorrow in the Trading Community I’m going to go really deep into what you can do and how you can actually document and shift your relationship with the money in your trading account to ensure that you sustain respect for it as the seed capital for your wealth building.
I think that’s a massive, massive switch that many, many traders need to make that will shift them from consistently losing to consistently being profitable.
Even if you’re just consistently getting 1% or 2% a month as a starting point, that is brilliant.
Because beyond there, just a few tweaks to start getting your actual monthly target.
