Why cannot trading make people rich?

  • 4 March 2021
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These days, when financial markets are booming and the world economy is not doing well, a large number of people are trying to become financial market traders to achieve their desired income. However, Niklas Göke, a leading economics writer at the medium, argues in his new article that trading cannot make people rich, you should never sell. You can read the full text of Nicholas Gook’s article below.


Why should you keep your assets?

He cites Carter Thomas as an example, who in 2003 made a clever decision to invest his entire $ 18,000 summer job in Apple stock.
Carter could [like most traders] spend all his money two months later on unnecessary expenses or buying luxury goods. But after splitting into more stocks and raising prices, Carter’s stock is now worth more than $ 10 million.

A simple but profound lesson can learn by looking at Carter’s experience. He says: If I have not amassed great wealth, it is only because I have sold my possessions. The reason for this is never that I did not buy the right things. I always bought the right things at the right time, but I never kept them enough.

We cannot compare ourselves to Carter Thomas, everyone has made such mistakes many times, so one thing should be noted:

You do not get rich by trading profit. You get rich with valuable assets.

What is the easiest way to get rich

According to Niklas Göke, here is the simplest 2-step wealth model I know:

  1. You need to buy assets that you think are of high value.
  2. You should not sell them.

Everyone thinks that choosing the right assets is the hard part, but in reality, it is the stress of constantly struggling with instant gratification that limits our ability and financial potential. Historically, almost all markets are moving upwards. Go back to a few years ago and look at prices. Stock markets, real estate, commodities, and even cryptocurrencies have been on the rise.

Everything is constantly rising because money is an artificial system created and controlled by man. Prices are nothing more than the numbers we write next to commodity names. Then we say, “If inflation rises by 2% during the year, that’s fine” because economics was also invented by man. We print more money, and as a result, all the numbers go up.

Easiest way to get rich

Easiest way to get rich

Can prices do anything but go up?

If money-printing changed prices evenly, this year it would increase by 25% the price of everything measured in dollars. As this does not happen, some areas are expanding. Stock markets, bonds, mortgages, and loans are usually the areas that are experiencing this increase the most. Eventually, money always finds its way into newer, more marginal, and less regulated markets, such as cryptocurrencies.

The reason we do not succeed in what everyone can do is one thing: we sell our assets very quickly. An investor makes money over time. He can do nothing more valuable than that, and most of the time, it is the right thing to do.

Why do we sell our assets?

There are two reasons to sell our assets: greed and fear. Investor greed is when you buy something you believe in but sell it too soon because you are not far-sighted or you think you are smarter than the market.

Investor fear occurs when you buy something you do not believe in. You just bought it because you were afraid of losing the profit that others make. In this case, you want to sell your property as soon as possible.

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