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I had "got suckered" into the Rich Dad real estate coaching program for $6,000. I had just come off from a business failure and decided I needed help if I was ever going to succeed. I allowed the salesman to push towards real estate instead of business because I had lost my confidence. I don't blame the salesman, just myself. Bottomline, I am not a real estate millionaire, just $6,000 in debt.
As you can imagine, this made me feel even worse. It was then that i learned about silver. I started buying silver 1 silver eagle at a time. When I started silver spot price was just over $17 an ounce. Over the course of 8 or 9 months I accumulated 100 ounces. After observing silver rising about 100% during this time I started to think "how can I get some leverage on this."
I first looked into the commodities market. The minimum contract was on 5,000 ounces and totally out of my range. I then found SLV, an ETF that was optionable. I thought it was the answer to my prayers. One contract of options controls 100 shares of stocks. I sold my silver and loaded up on call options. For about a month I looked like a hero; $300 here, $400 there. It was working so well that I decided to reposition myself and increase my leverage more. It had gone from $40 to $48 in about 3 weeks and I had tripled my money. I repositioned into $70 Oct calls. By doing this I now controlled over $500,000 of silver. The next day silver went up again and my options increased in value $4,500!!! I felt like superman. I thought I had finally done it, I found my path to financial freedom.
This was short lived. Silver then crashed. Whether you believe silver was in a bubble or believe the crash was artificially caused by banksters naked shorting paper, and manipulating the CME rates, does not matter. The results are that it wiped out my position.
I am passing this story on to you because I made some critical errors that MJ points out in his book.
Event over Process: Waiting for silver to explode in price is an event. There is no process involved. You do your research and then pray to God you are right once you make your move.
Uncontrollable Limited leverage: Options have a lot of leverage, but you have no control over the outcome. I suppose if you have a youtube channel like Max Keiser or Bob Chapman you can influence people to buy silver, but the results are rather negligible.
Why Starting a Business is Superior: Here is some food for thought. It took silver 9 months to double in value. If you printed some t-shirts for a cost of $7.50 per shirt, and then sold them all in a week, you just made a 100% gain in only 1 week's time. If you have trouble selling them you can change locations, create a consignment deal with local mom and pop stores, or sell them online. The point is that you have options available to you as opposed to sitting around waiting and hoping for silver to go up... ...an event that may or may not happen.
I had forsaken "process" which is the main reason for my failure. I had bet everything on an event that I had no control over and I got burned for it.
I am starting over from the bottom. I have hopefully learned from my mistakes and am making adjustments and I will try again. My focus now is to create a business, fill a need, then invest my profits. This sure beats squeezing myself for every penney I can scrape together and bet it all on something only to watch it go up in smoke.
I had plenty of good reasons to believe that silver is set to explode in price, and these are the sirens luring us to the rocky shores. I am not saying that silver, or real estate, is a bad investment. I am saying that if you are starting from the bottom like I am that you are better off to build a business.
Hopefully my story can help others avoid making this mistake.
As you can imagine, this made me feel even worse. It was then that i learned about silver. I started buying silver 1 silver eagle at a time. When I started silver spot price was just over $17 an ounce. Over the course of 8 or 9 months I accumulated 100 ounces. After observing silver rising about 100% during this time I started to think "how can I get some leverage on this."
I first looked into the commodities market. The minimum contract was on 5,000 ounces and totally out of my range. I then found SLV, an ETF that was optionable. I thought it was the answer to my prayers. One contract of options controls 100 shares of stocks. I sold my silver and loaded up on call options. For about a month I looked like a hero; $300 here, $400 there. It was working so well that I decided to reposition myself and increase my leverage more. It had gone from $40 to $48 in about 3 weeks and I had tripled my money. I repositioned into $70 Oct calls. By doing this I now controlled over $500,000 of silver. The next day silver went up again and my options increased in value $4,500!!! I felt like superman. I thought I had finally done it, I found my path to financial freedom.
This was short lived. Silver then crashed. Whether you believe silver was in a bubble or believe the crash was artificially caused by banksters naked shorting paper, and manipulating the CME rates, does not matter. The results are that it wiped out my position.
I am passing this story on to you because I made some critical errors that MJ points out in his book.
Event over Process: Waiting for silver to explode in price is an event. There is no process involved. You do your research and then pray to God you are right once you make your move.
Uncontrollable Limited leverage: Options have a lot of leverage, but you have no control over the outcome. I suppose if you have a youtube channel like Max Keiser or Bob Chapman you can influence people to buy silver, but the results are rather negligible.
Why Starting a Business is Superior: Here is some food for thought. It took silver 9 months to double in value. If you printed some t-shirts for a cost of $7.50 per shirt, and then sold them all in a week, you just made a 100% gain in only 1 week's time. If you have trouble selling them you can change locations, create a consignment deal with local mom and pop stores, or sell them online. The point is that you have options available to you as opposed to sitting around waiting and hoping for silver to go up... ...an event that may or may not happen.
I had forsaken "process" which is the main reason for my failure. I had bet everything on an event that I had no control over and I got burned for it.
I am starting over from the bottom. I have hopefully learned from my mistakes and am making adjustments and I will try again. My focus now is to create a business, fill a need, then invest my profits. This sure beats squeezing myself for every penney I can scrape together and bet it all on something only to watch it go up in smoke.
I had plenty of good reasons to believe that silver is set to explode in price, and these are the sirens luring us to the rocky shores. I am not saying that silver, or real estate, is a bad investment. I am saying that if you are starting from the bottom like I am that you are better off to build a business.
Hopefully my story can help others avoid making this mistake.
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