You don’t see many startups in the stock-trading industry, probably because us traders have too little time and energy leftover after our daily grind.
As a result, my niche suffers from a severe lack of innovation, despite the rapid growth of the Internet and social media — tools that have the potential to revolutionize trading.
During my wild ride — turning $12,415 in Bar Mitzvah gift money into $2 million in four years of college, losing a third of my net worth while running a hedge fund, and landing a starring role in the hit TV show Wall Street Warriors – I’ve founded multiple companies aimed at educating traders on how to utilize these new technologies.
Education – even for speculators – is so important.
Here are three essential pieces of advice I’ve received over the years:
1. Failure is a prerequisite for investment.
While trying to fundraise for my hedge fund, I met one veteran investor who said, “Tim, I love you — I love your strategy, I love your determination, but I’m not gonna give you any money because you haven’t been scarred yet.”
I walked out of the meeting thinking he was a crazy old man.
I had some success at first, but three years later, after I tried investing rather than trading and losing a third of my fund and credibility, that crazy old man couldn’t have been more right.
My success at such a young age had made me far too cocky. Now that I’ve experienced great financial and professional loss, I’m an infinitely better trader, businessman, teacher and person, for that matter. And I don’t invest in or hire anyone who hasn’t failed in the past, as their education isn’t complete.