If something has value, it has cost. Right? We perceive college education as valuable because it is so expensive. Oftentimes, the most expensive tuition is paid at the school of hard knocks.
Quick story on knocks and stocks.
After the financial crisis in 2008, everything was tight and I was thrifty. My wife and I had been working and saving money for a few years. We were really proud to build a 60k nest egg and I thought we were really doing well. I made the mistake of losing focus on the business and started looking for a way to make some easy money. I’m a risk taker but not a gambler…so I thought.
I got a “hot tip” on a stock that was supposed to be a sure fire way for me to take my 60k and turn it into 80k in a couple of weeks. I opened a trading account, bought a PUT for 20k shares of a pharmaceutical company. If you don’t know what a PUT is, don’t feel bad, I didn’t either. It’s basically a contract that you will buy a stock at a specific price on a specific date. It’s just a bet!
I remember vividly, I was getting on an elevator with my wife in a hotel in Atlanta, GA. My phone dinged just as I pressed the button. As we descended to the lobby so did the blood from my head. I bet the stock would go up and it went down. Instead of turning 60k into 80k, it went to ZERO.
I’m not telling you this to keep you from investing in stocks. I still have a portfolio of stocks and mutual funds. But, I don’t bet on stocks anymore. I only play the long game, invest and hold.
I learned a few things about the stock market and about myself.
1. The stock market can be an investment vehicle or a crap table. Your choice.
2. If you play a game with money and no experience, by the end you will have experience and no money.
3. By the time something gets labeled “hot”, it has already flamed out.
4. The lure of easy money is strong and usually wrong.
Let’s switch gears for a second. Our relationships work a lot like my example. But, our capital is not cash; it’s forgiveness, grace and mercy. When we invest in people, it hurts to see them make poor choices and mistakes. Sometimes we even feel that our investment has gone to ZERO. It hasn’t. If there is still breath and life, there is still hope.
Don’t just bet on people, play the long game.
neither will I offer burnt offerings unto the Lord my God of that which doth cost me nothing.
2 Samuel 24:24a KJV