I had a reputation for making money in high school. Back in '93, at the tender age of 10, I was running the school store at John Hill Elementary in Boonton, New Jersey. During college I was among a select few in my social circle to actually own a car; a BMW no less. It all seemed great at the time, but there was an unintended consequence to my perceived affluence. The fact that I was so far ahead of my peers financially, gave me a false sense of comfort and acheivement. No one else was trading multi-thousand dollar blocks of stock as they sat in their physics lecture. Taking notes during economics class, and every other class for that matter, my laptop was always open so I could keep an eye on the market and trade as needed. Relative to my classmates I was ahead of the curve and doing well for myself. But little did I know, I was only months away from a rude awakening.
After eventually dropping out of college and failing to get any professional traction, I ended up in customer service at an internet marketing company. Up to that point I was the most affluent person in my circle. Everyone in my family was buried in debt, on the verge of losing their home, or subsisting on social security. When I arrived at the aforementioned marketing company, I was quickly brought back down to earth. One of the guys working there, a couple years younger than me, had the Tony Stark Audi sports car, and a boat, and a tricked out Jeep Grand Cherokee, AND a condo in a luxury high-rise. Suddenly, my 8-year old 3-Series didn’t seem so fresh. That being said, we had a good rapport and got along well. It wasn’t long before he was consulting me for trade tips and other investment ideas.
Another kid who worked there, also younger than me, also had a 3-Series BMW. But unlike mine, it was the M3 model. One day we struck up a conversation and when he learned that I had a history of trading the markets, he asked me to critique his portfolio. At the time, his UBS account had a balance of more than half a million dollars. And that was before the market continued to move another 35% higher over the following 2 years. My ego was checked. I had come back down to earth. I wasn’t the hot s**t I thought myself to be. I may have known a lot about money, finance, and the markets in general, but I didn’t know jack about the most important thing of all – how to actually make money.
You see people preaching on the internet all the time. Economists writing articles for the Wall Street Journal, Bloomberg, NY Times, etc. It seems like everyone has advice, but no one has an actual track record. I must have put on a really good show and talked a really good game because looking back, I can’t conceive of any other reason why anyone listened to me. I was making $14 per hour, working for them, and driving a car that was nothing compared to any of theirs.
The moral of the story, is don’t take financial advice from people who don’t have money.
You don’t ask your auto mechanic how to deal with a toothache.
You don’t ask your dentist how to fix what’s wrong with your car.
There are some areas of life where discrimination is absolutely appropriate, and free advice is usually worth exactly what you pay for it.