Quite frankly, I'm tired of writing about my trades now. So today, I will write about a topic that has been closed to my heart. I'm talking about simple living. A topic that I have mentioned in my post earlier this year.
My journey towards learning everything about simple living led me to discover about a new concept to me called life style designs, frugal living and stress-free living. Who knew that such concepts exists these days.
I will not teach you about how to live your life. I will simply state my observations and to point out the lessons I have learned as it applies to my family and to myself as a person and as a trader.
For me, simple living is not about completely overhauling your life but it is about refocusing your life towards areas that are most important...family, self fulfilment and health. But don't forget about building wealth which should be a natural extension of simple living. I have visited a few personal finance blog sites in the last few months. These blog sites can be grouped as follows
- Debt-free living which I totally agree with.
- Wealth-building which is as it should be for every one.
- Frugality which I also agree. Live within your means.
- Extreme savers which borders living like a caveman. Who know people still try to live within $25K / year?
And just like any other blog site, there are also offers of how to cut down your expenses and other excess such as
- Buying a rundown car instead of buying a new car to save from car payments. I would rather be comfortable siting in a traffic inside my brand new Benz or BMW planning my next big trader rather than in a old second hand car trying to think on how I can cut down $10 in my next grocery budget.
- Spend most of the time looking for ways to save. I would rather spend more time looking for ways to earn more and just try to live within a reasonable budget.
- Buy clothes from thrift shops or get hand me downs. I don't know about you, but I grew up wearing hand me downs courtesy of being a financially challenged parents. If you think your kids are having fun wearing those clothes, you are delusional.
- Having money does not make you happy. So is being poor. I would rather be happy and wealthy.
"What's up with Pinoytrader talking shit and stuff?", you might say but do know this, how you look at things should dictate your trading methodology and philosophy.
You see, if you are an extreme saver type, as a trader, it will be very difficult for you to watch your gains disappear during price retracement if you are going to hold the position for a bigger payday. Savers look at things around them as say a $50K/year world and anything they can get out of the $50K is gold to them. To put this in a trader's perspective, if your positions immediately gave you a $1000 gain, any retracement from that $1000 high point mark is a loss that could have been a savings. It might be better for saver to lock several small gains and not let retracement eat his/her gain.
As for me, I'm not a saver type but rather an earner type. I actually think that taking small gains is a waste of my time and effort because I am always looking for the big payday. My temperament allows me to sit through retracement because I don't look at the small gain as a money that I could have had but rather as a business expense (risk) that I can use for the home-run gain. Just like the example above, I will not look at the retracement from that $1000 high point as a loss but rather a launching pad for the next $3000 gain. Another example of this attitude is when I try to diversify to dilute the portfolio risk into several positions. Seeing small gains from several positions makes me impatient and thereby making me consolidate my position and focus my resources to make bigger gains.