You only get rich by having valuable assets.

These days, when financial markets are booming and the world economy is not doing well, a large number of people are trying to become financial market traders in order to achieve their desired income. 

However, Niklas Göke, a prominent economic writer in the medium, inArticleHe just argues that trading can not make people rich. You can read the full text of Nicholas Gook’s article below.

“Never sell”; This is the advice that Carter Thomas wishes he had followed 20 years earlier.

In 2003, Carter invested all of the money he earned from his summer job as a lifeguard in Apple stock. His total capital at that time was $ 18,000; A smart decision.

It did not seem like a wise decision for Carter [like most traders] to spend all his money two months later on unnecessary expenses or buying luxury goods. afterStock breakdown (Divide shares into more shares) and price increases, Carter shares are worth more than $ 10 million today.

Looking at this experience, Carter has learned a simple but profound lesson that most people like him who want to make a fortune ignore. He says:

If I have not amassed great wealth, the only reason is that I have sold my possessions. The reason for this is never that I did not buy the right things. I always bought the right things at the right time, but I never kept them enough.

I can not compare myself to Carter Thomas, I have made such mistakes many times, so I just want to remind myself of one thing:

You do not get rich by trading profit. You get rich with valuable assets.

Disclaimer: I am not a financial advisor. This is not a financial advice.

It’s simple: buy a good asset, don’t sell it!

Here is the simplest 2-step wealth model I know:

1. You need to buy assets that you think are of high value.

۲. You should not sell them.

Everyone thinks that choosing the right assets is the hard part, but in reality it is the stress of constantly struggling with instant gratification that limits our ability and financial potential.

Historically, almost all markets are moving upwards. Go back to 10, 20 or 30 years ago and look at prices. Stock Market: Upward. Real Estate: Upward. Commodities: Upward. Digital Currency: Upward. Venture Capital: Upward. Even the price of Pokémon Go game cards has been on the rise.

Everything is constantly rising, because money is an artificial system created and controlled by man, and we know that man is an error-free creature. Each of us is involved in self-control, and human beings generally struggle with this issue. Money oneMarshmallow Experiment(marshmallow experiment) is a giant for humanity. The “print more money” button is a big red bell, and if you give such a bell to people with little self-control, how much can you really expect them to control themselves before the bell rings?

Prices are nothing more than the numbers we write next to commodity names and then say, “If inflation rises by 2% during the year, that’s fine”; Because economics was also invented by man. We print more money and as a result all the numbers go up. Can prices do anything but go up?

The US Federal Reserve has printed nearly $ 5 trillion this exceptional year alone. For every $ 4 that existed at the beginning of 2020, another dollar is now in circulation. Do you know what this means? This means that the numbers must go up.

If money printing changed prices evenly, this year it would increase by 25% the price of everything measured in dollars. Because this does not happen, some areas (where newly printed money first flows) are experiencing further increases. Stock markets, bonds, mortgages and loans are usually the areas that are experiencing this increase the most. Eventually, money always finds its way into newer, more marginalized, less regulated markets such as crowdfunding, digital currency, and Pokémon cards.

The point is, whether you look at the 100-year chart of the stock market, the 50-year chart of real estate, or the 30-year chart of the gold market, the numbers are always going up. Even if a monkey unintentionally removes a number of stocks (or other assets) from a hat quite by accident, it will still perform well over a period of decades.

However, even though we have a one percent chromosomal difference with the monkeys, we usually do not succeed in this lottery that everyone can win. There is a reason for this: we sell our assets very quickly.

An investor makes money over time. He can do nothing more valuable than that, and most of the time he is right.

Why do we sell?

Why is it hard not to do anything and not take advantage of this opportunity? Then Why can’t we let the market take care of our assets? There are two reasons: greed and fear .

Investor greed is when you buy something you believe in but sell it too soon because you think you are smarter than the market or short-sighted thinking overshadows you.

In 2017, I bought China Chainlink for $ 0.09. I knew what this digital currency and network was going to do. And I thought it was a good thing and I wanted to keep it. A few weeks later, I gave up and did what everyone told me to do: I made a profit. If I sold each link for $ 0.55. I was too happy. I had made six times as much profit in a few weeks. How could I do better than this? Today, the China-Link mission is being realized.Link priceAt the time of writing, it is about $ 15 and has reached its peak price of $ 20. I lost $ 100,000 easily. In fact, I was influenced by short-sighted thinking.

Investor fear occurs when you buy something you do not believe in. You just bought it because you were afraid of losing the profit that others make. In this case, you are a time bomb sitting on a time bomb. The question that arises is: which one will explode sooner?

When I was 18, I bought shares in three companies recommended in a magazine for 400 euros. I just had a vague picture of what companies were doing and I had never looked at that information. The shares I bought lost 25 percent. 100 euros was a lot of money for an 18-year-old. After months of waiting and torment, I finally sold all my stock at a loss of 50 euros, but the psychological cost was much higher. Not only did I lose my money but also my energy and my peace. I had made a bad investment and hoped to make up for it.

Becoming a trader

Greed turns you from an investor to a trader. Trading is a profession that if you know the concept you probably do not want to work in it and it is definitely something you can not succeed in with fear and greed.

But becoming a trader seems very easy. Isn’t that so?

Everyone wants to be a trader. Trading is cool. It has charm. Makes you feel alive. It is also a quick way to destroy productivity, mental health as well as ruining your portfolio to achieve a good return.

If people knew that being a “trader” is a job like any other, a job that can only be counted on if you make a steady profit, their perception of the profession might change. But they often think that by sitting on the toilet stone after lunch and thinking about it, they can master this area.

When you are a trader, your salary comes from buying at a low price and selling at a high price. Do you understand? If you do not have a successful transaction, you do not have money to eat. This is a prerequisite for a real time trader. If you are not one of them, you are lucky!

You are lucky that your salary is not earned by buying at a low price and selling at a high price. So why are you looking for a second job? Especially something you are not good at. So just buy and keep forever. Use your money to store more valuable things.

When you buy an asset that you believe in, it is pointless to ask when to sell it. By default, the answer to this question is never. In fact, your answer should not change until the situation changes fundamentally.

Suppose you like Amazon. Jeff Bezos works for you when you buy Amazon stock; This happens not imaginary but literally. If Jeff Bezos were successful in his work, the value of your portfolio will also increase. For 20 years this man has proved that he knows what he is doing. Why should you remove such an option from your list? Are you firing Jeff Bezos? No, but you are selling your Amazon stock, and that’s exactly what Jeff Bezos’s fired.

Lack of a mentality makes us behave like a trader, even though we have no skills to succeed in it. We deceive ourselves and in a delusional attempt we change our position (trading position) to “Opportunity cost»Manage ourselves. We are worried about how to invest the next $ 500.

Instead, we (investors) just need to make more money and buy what we believe in. We need more firepower. [Unlike traders who have a lot of problems] The only problem for us is: we need more money to be able to buy more assets and keep it forever.

If you believe in investing while you do it, there is no need for weird action. There is only one need to buy more, and the best way to achieve this is to make more money from the job in which you are skilled than to work part-time and poorly.

Not a trader. Rather, be an investor and then try to make as much money as you can in your business so that you can invest as much as possible.

Get rich

Getting rich means sleeping like a baby. Getting rich means having things with you throughout your life and for the rest of your life. The only way to do this is to own valuable assets forever.

Civilization has made this easier than we think; Because historically, in the long run, numbers are always going up. This system was created for us and not against us. As a result, we do not succeed in investing just because we are in the way.

Human psychology, not his ability, is the key to our financial success. We struggle with self-discipline, greed, fear, and an unpleasant sense of our income potential. Even if we know that taking no action is the best action for an investor, we still find it almost impossible to take action.

Carter Sharp had to learn this lesson hard, but he did, and now he pays full attention to the following advice:

I’ve talked to a lot of people in their 50s, 60s and 70s, they all said the same thing: the most important thing is to have assets. If you want to have wealth, you just have to have more assets. That’s the only thing that matters.

You do not get rich by trading profits, you get rich by having valuable things. Do not buy anything that gets in your way. Buy things you want to keep forever and then manage your mind to really do it.