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Ask Dave

Beg Him To Be A Tortoise

Jana and her husband have $55,000 in student loans. Her husband wants to earn extra income with day trading or investment property. Dave gives Jana something to think about when he tells his personal story.

QUESTION: Jana in Dallas and her husband were married in January and have $55,000 in student loans. Her husband would like to start earning extra income on top of their jobs such as day trading or investment property. Dave gives Jana something to think about when he tells her his personal story.

ANSWER: Your husband has the same disease that I had, and it is a good disease and a bad disease. He’s very smart, and he’s very ambitious. I was, too, when I was 24. By the time I was 26, I had $4 million worth of real estate starting from nothing and more than $1 million net worth. I became a millionaire. The problem was that I did it poorly with way too much debt, and I spent the next two and a half years of my life losing everything I owned. I was being sued. I was being foreclosed on. And finally, I was bankrupt with a brand-new baby and a marriage hanging on by a thread.

The disease he suffers from in the midst of his intellect and his ambition—they combine to make him vulnerable to “get-rich-quick” schemes. You and I need to beg him to be the tortoise and not be the hare. That’s very difficult for him because the tortoise is slow and ugly. He’s used to being fast and pretty. The hare loses the race every time I read the book. The Bible says, “He who hastens to be rich will not go unpunished.” I know; I’ve been to that woodshed. You don’t want to go to that woodshed with your bright husband. It will take him places he does not want to go. Please hear the wisdom that comes from the pain of experience. That is: 78% of day traders lose money. That’s all of them. It is a really dumb idea. You are not going to make money. You are going to lose money, but it takes a certain amount of arrogance to even play. The arrogance comes from being bright, being ambitious, and combining in a toxic way. I was prone to virtually any methodology that would allow me to become wealthy that was legal—to try any of it. If there had been day trading then, I would’ve done it. I have been down these roads.

The second time I became wealthy after losing everything, I did it slowly, steadily, with no debt. I was in no hurry, and many years later, that wealth has expanded exponentially as a result. That’s called God’s blessings. The good news is you have a very bright young man who’s not afraid of work. The bad news is he’s always looking for a shortcut. There is no shortcut to anyplace that’s worth going.

We probably don’t want to use his plan. I want to be encouraged by him to do good things and big things and smart things, but I don’t know that I need his plan. His dad has done what I’m talking about. His dad has tried every little “get-rich-quick” thing. He’s joined every pyramid scheme and multilevel thing that’s come along in the years. He’s tried every way for an easy buck. You just can’t go there. I’m going to beg your husband to slow down just a little bit and to do something that doesn’t have any sex appeal to it, that is kind of boring. Go get The Millionaire Next Door. It’s an old book by Dr. Thomas Stanley. In that book, he found that the typical millionaire owns something really exciting like a dry cleaner’s. They work like 60 hours a week pressing people’s clothes for 10 years. They become a multimillionaire or a millionaire. Or they own a hardware store or a local plumbing company. This is the typical millionaire in America today. They’re not stockbrokers. They’re not real estate traders. This is where I want him to go.

You’ve got a good man there. He needs to be encouraged to be a little more boring in his pursuit of wealth. Be willing to not look for any kind of a shortcut, because he’s not smarter than everybody else. Seventy-eight percent of the day traders lose money. It’s a scam. Everybody who did nothing-down real estate investing—almost every one of them are in bankruptcy right now. It was a disaster for them because they didn’t have any equity. They didn’t have any liquidity. Then the market went down on them, and boom, they’re hammered. You just don’t want to go there. Broke people don’t need to buy and sell real estate. It’ll make you broker. That’s why they call them real estate brokers.

Thank you! Your guide is on its way! 

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