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Becoming A Stock Market Entrepreneur

An educated stock investor knows how to cash flow with the stock market, not just invest for capital gains

For years I have been teaching investors about the way the mutual fund industry has brainwashed us into thinking about investing:

Be patient… stay the course… don’t panic… you’re in this for the long haul.

When we hear this advice, it conjures up an image of a wise old man like Benjamin Franklin endorsing this time-honored tradition of investing. One can imagine people just like us investing this way for centuries.

On the other hand, how does our culture represent stock market traders? They are typically shown as greedy, high-risk gamblers who will do anything for a quick buck.

In my opinion, both of these pictures are false. The first one is meant to lull us into false comfort, and the second to shame us into believing that’s what we will become if we trade the market for ourselves.

I like to think about investing the same way I think about business. Some people work as employees, and some people build their own businesses as entrepreneurs. The “employee” type of investor is the one who invests in cookie-cutter investments such as mutual funds and 401(k)s. With no thinking involved, they can just do their thing and enjoy life. Later, when they look back, they often have regrets and wish they would have taken charge of the situation to generate greater returns and satisfaction.

The “entrepreneur” investor, on the other hand, looks at the investment possibilities before him and sees endless opportunity. He may not know how to do it all right now, but he has the confidence to figure it out. Why? Because he sees other average people who have succeeded at it, and he is at least as smart as they are. So he focuses on improving his education and then putting this new training to work in the real world. Sometimes he wins, sometimes he loses. But at every step he is learning from his mistakes and discovering ways to avoid making them again. As time goes on, his confidence builds and his profits grow.

Just like the entrepreneur who starts a new business and builds it over a period of time, the stock market entrepreneur grows his own money-making effort.

At the end of the day, it’s true that money cannot buy happiness. But in our quest to give ourselves the kind of lifestyle we desire now and a retirement that we deserve after a lifetime of hard work, money can be the difference between truly enjoying all of the wonderful things that life has to offer and continuing to work just to survive.

With a system of mutual funds and the 401(k) program designed to funnel wealth to the big financial institutions, and laws that have the unintended consequences of sentencing many people to lifelong work just to make ends meet, what can a person do to break free of these constraints?

The answer is the same as with nearly every problem we face in life: Self education and effort.