I want to start today off with a story...
You see, when I was about 12, our Boy Scout troop launched a fundraiser in which each of us was given a sales quota for candy bars.
Being a high achiever and not wanting to let the group down, I tried my best to emulate the professionals I had watched through the years.
Knock on doors.
Never take no for an answer.
I needed to sell 25 candy bars, so I figured I'd knock on 25 doors, sell a candy bar at each and every stop, and be done with the project.
Donning my uniform one fall evening, I went to work.
The first few sales were easy. These were next-door neighbors who knew me already. They didn't really need any candy but figured they'd help out.
As I got farther away from home, sales got tougher. I tried everything I could to get folks to buy.
I sold the benefits ("think how much your kids will enjoy this candy").
I tried to overcome objections with a version of the "puppy dog close." ("No change? No problem. Take the candy now and I'll come back tomorrow to collect.")
I'd spend 30 minutes talking to an elderly spinster only to find she didn't have any money to spare.
I sold a few candy bars, but mostly felt rejected.
I began to dread the next door - just imagining how much worse I'd feel after hearing another "no."
I ended that first night with my head - and my spirits - hanging low.
After a few days of stewing and feeling down on myself, my problem-solving instinct kicked in and I realized I was looking at this all wrong.
Instead of focusing on the rejections, I needed to focus on the numbers.
For every five doors I knocked on, four would answer.
Of the four, one would buy a candy bar.
From then on, that's how I worked.
With 15 candy bars left to sell - and a 1-in-5 knock-to-sale ratio - I knew that I needed to knock on 75 doors to get the job done.
It seemed like a hefty task, but I figured if I could hit 25 a night, I could reach my sales quota with three nights of work.
My next candy sale outing was an emotional epiphany.
Each "no" got me one closer to a "yes."
I knew my numbers and trusted my approach - my "system."
This was no longer a chore. I was just working my system. If someone wasn't interested, I'd quickly and politely move on to the next door with a smile.
Freed from the mental obligation to win every time - to sell every single household - I found I was having fun.
Lots of fun, in fact.
I had a spring in my step and my new upbeat attitude must have showed. I started racking up sales, and I didn't let up.
In short, I had shifted from a results-oriented mindset to a process-oriented mindset.
Pretty soon, I hit my quota.
Then I exceeded it.
In fact, I ended up with one of the top sales records that fall.
Here's why I'm telling you this story...
You see, that same sort of mindset can be just as detrimental when it comes to investing.
We've been hardwired to believe that focusing on results is the way to get what we want. Winning is everything: Nothing matters but a win. In trading, we won't always win in the short run, and this can make us feel like failures.
That's why, if you want to achieve true lifelong wealth, you need a system that is designed to insulate you from the "biases" in human nature that lead to 90% of trading failures.
Over the weekend, we talked about one of the most disastrous bias of them all - the need to be right.
Today, we're going to continue our in-depth look into biases...and how The 10-Minute Millionaire way helps us not just overcome these setbacks...but profit from them.
Let's take a look...
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Work the System
Fact is, bad traders are a lot like door-to-door salesmen of decades past.
They feel like they can force, cajole, guilt, or persuade every trade into a winner.
Each loss is a personal failure.
They hate rejection.
They need to be right.
So they spend way too much time anguishing over the rejections (the money-losing trades) instead of just moving on to the next opportunity.
Fortunately, 10-Minute Millionaires know their system is a numbers game.
The ultimate goal is still there (sell candy bars/make a million bucks in the markets).
It's the perspective that's different.
No one trade is a make-or-break proposition.
Each loss gets you one trade closer to the next win. But each win isn't a reason for celebration.
Gains are what we expect.
The real goal is together lots of gains - enough, in fact, to achieve millionaire status.
To do this, we work the system.
We focus on executing the proper process (system) rather than the short-term results.
Because we know the results will follow.
Results Versus Process
There is an ongoing debate about what's most effective: setting results-oriented goals or setting process-oriented goals.
The results-oriented camp claims that a single-minded focus on a goal produces the best outcomes.
The process-oriented folks believe that an unwavering concentration on doing the right things (in short, following the process or system) will actually lead to a more consistent attainment of goals.
The 10-Minute Millionaire way is to focus on the process - the system - knowing that the results you seek will follow.
Here's why I'm telling you this.
I'm spent my career watching traders - both newcomers and veterans - so I can tell you this with a lot of confidence.
So many folks who are new to trading come from a results-oriented background and try to apply that same form of goal-setting to their investments.
Unfortunately, as a newbie, that mindset can have disastrous results.
Here's an example...
Let's say you have a new trader who starts out by saying, "I want to make $2,000 a month from my trades."
It's seems to be a modest goal, one that won't have the trader shooting for overly risky opportunities.
And yet, there's still a problem here - a pretty big one, in fact.
Let's say the first month goes according to plan. Maybe even the second. But as the third month progresses, the trader looks at the calendar, looks at his or her account, and realizes it's the 25th of the month... and that the total (profit) so far is only $200.
The problem: The trader is $1,800 away from his or her goal... with only a few trading days left.
At this point, a results-oriented trader has three options:
- Miss the goal (causing tremendous angst)
- Take on more risk by making lots of unqualified (low-quality) trades - which violates the trading rules of the system
- Take on more risk by bolstering (in a big way) the amount of money wagered per trade - which violates the risk-management guidelines of the system
The first choice causes considerable stress - which can lead to the two other miscues.
The two latter choices will ultimately lead to financial disaster - perhaps not now, but eventually.
There's an old investing adage that says to never try to "make money you need." That maxim is usually perceived to mean "need for a house" or "need for a car."
But trying to make money you "need for a goal" is just as dangerous a proposition.
And a lot of investors have blown up their accounts by making these sorts of risky moves.
The 10-Minute Millionaire system sidesteps these risks by embracing a process-oriented focus.
In short, your goal here isn't to make a certain amount of money.
The goal instead is to do things right - knowing that, if you do, the profits you seek will be there over the long term.
The bottom line: Learn the system as I show it to you. Then run the system over and over until it becomes second nature.
You must not second-guess the system. The system is already set up to succeed.
Just like my candy sales, your trading profits will be an output of a well-run system.
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The post The Boy Scout Lesson Every Would-Be Millionaire Can Learn From appeared first on 10 Minute Millionaire.
About the Author
D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.