Popular books and movies that are based on real stories have powerful messages for readers and viewers. The book Wolf Of Wall Street, which describes the quick rise and fall of stockbroker Jordan Belfort — and which was made into a movie that has just been released — has two messages for investors, and one for the newly rich.
Here are the two messages for investors:
1.Don’t Pay Others To Lose Your Money. Paying someone to lose your money isn’t fun. That’s why you should either take your financial destiny in your own hands, or choose your financial advisor carefully—the way you choose a medical doctor or a lawyer. Always know where your money is invested and how it performs: read your monthly and quarterly account statements, and meet with your financial advisor regularly to review portfolio performance and investment strategy.
2. Stay Focused. Stick with your goals and priorities as defined in your financial plan, and the asset allocation and portfolio selection that serves these goals. Close your ears to sirens, who hype your expectations with all sorts of stories and stereotypes — as discussed in a previous piece — like “this is a new era,” “this stock always go up,” “you never lose money in gold and real estate.”
Here is the lesson for the newly rich:
Don’t Be a Prosperous Fool. Prosperity, by itself, is not a cure-all against an ill-led life, and may be a source of dangerous foolishness. This is especially the case for people who become rich quick, by placing the right bet on the stock market, precious metals market or the Bitcoin market.
Money is a necessary condition, but not a sufficient one, for the good life, happiness and wisdom. That’s because prosperity requires wisdom: the rational use of one’s resources. In the absence of such wisdom, as Aeschylus spoke of and as we discussed in a previous piece, one runs the danger of being a prosperous fool.
Source: Forbes Business