Which would you rather receive, a large lump sum of cash delivered into your bank account once a year, or a steady stream of much smaller amounts of money deposited into your account each month?
Which would make the larger difference to your life?
Many traders that I have spoken to have in mind a magic number (usually in the millions of dollars) that they are targeting. Sometimes they even hold out hope that it will magically appear with one, single, glorious trade!
When they reach this number, they believe they will have “made it.” The number represents financial freedom – the dream house, dream car, dream holidays etc.
While it is always great to have a “final target” in mind, there really is no finish line, because as soon as you reach your “magic number”, you are in a new position from which to set goals from. All of a sudden, a new set of larger goals and dreams becomes your target.
Another thing to consider when having a “final, magic number” as your target is that these goals can often take years to achieve. A trader starting with capital of $10,000 is generally not going to reach $10,000,000 in six months. YES, it can be done but it is not a normal return for a trader, especially a new trader. So a buffer of time should be allowed.
Let’s assume that time frame is five years. Does that mean you will be working and trading for five years before you show any result for it? Five years is a long time, especially in the financial markets. You deserve to be rewarded for your efforts along the way.
Now let’s look at the alternative. Rather than focussing solely on the multi-million dollar magic number, imagine your trading was able to consistently return to you an extra $1,000 income per month. Would that make a difference to your lifestyle?
Sure, it won’t solve all your financial problems in one go, but it might ease the pressure on the credit card, or help you deal with higher interest rates or the rising cost of living, allow the family to eat out at nicer restaurants or to buy a few more luxuries. If nothing else it would make life just that little bit easier.
What if you could then increase that $1,000 income to $2,000 per month, or $5,000, or $10,000?
In his book Cashflow Quadrant (the sequel to Rich Dad, Poor Dad and in my opinion an even better book), Robert Kiyosaki writes that “cash flow, not money, relieves anxiety.”
What he is saying is that a steady increase in monthly income will often go far further towards removing financial stress than say a one off, large lump sum payment might do.
The currency markets have some of the lowest margin rates around, meaning that anyone can get started with a small trading account and trade with a small outlay and a small risk as they build up their confidence. You can learn how to get started in currency trading by watching our full, FREE FX Trading Course on the Safety in the Market YouTube channel.
As a final thought for those who are still hanging out for the “glory trade”, remember that most people who win Lotto or Powerball tend to end up worse off within five years of their massive windfalls. I’ve always wondered why (and how!) this can be the case but most agree that it is because they weren’t ready to handle such a large sum of money. Sometimes, slow and steady is the better option.
By starting out targeting small monthly gains in your trading and building up from there, you can go a long way towards avoiding the “Lotto” syndrome as you will be much better prepared to handle your “magic number” of dollars when they arrive in your account.