Resiliency Over Luck: The Trader's Advantage
Mar 15, 2024
Luck can smile on anyone, but it's resilience that truly separates those who thrive from those who merely survive. Consider two scenarios: one, where an individual wins the lottery, and another, where someone builds their success as an entrepreneur. The former relies on chance, while the latter embraces resilience—a trait that can withstand and recover quickly from difficulties.
Entrepreneurship Resilience: A Skill to be Developed
In the world of 9-to-5 jobs, winning the lottery might seem like the ultimate stroke of luck. However, entrepreneurs understand that creating their opportunities is far more empowering than relying on chance. They make their "lottery" and print success at will. The study of Powerball winners sheds light on the divergent paths these two individuals take: a 9-to-5 worker might spend a $1,500 windfall, but an entrepreneur will use it to make that sum grow.
The Curse of the Lottery vs. Long-Term Wealth of Entrepreneurs:
The stories of lottery winners facing tragic outcomes are unfortunately common. Yet, research by Cesarini and his colleagues found that those who won substantial sums, even up to $2 million, retained their wealth well over a decade after the jackpot. This resilience contrasts sharply with the financial fates of many lottery winners who face challenges with newfound fortunes.
Business Stats:
Contrastingly, the path of entrepreneurship is laden with challenges. According to the U.S. Bureau of Labor Statistics, about 20.8% of private sector businesses in the U.S. fail within the first year. After five years, the failure rate climbs to 48.4%, and by the end of a decade, 65.1% of businesses have faltered. This emphasizes the importance of resilience in the entrepreneurial journey.
Entrepreneurial Icons: Learning from Struggle:
Referencing success stories like Melanie Perkins, the co-founder of Canva, and J.K. Rowling, who faced immense struggles before achieving monumental success, showcases the power of resilience. Colonel Sanders, the founder of KFC, and William Eckhardt, a trader from "Market Wizards," both overcame significant setbacks to achieve success.
Persistence in the Face of Losses:
William Eckhardt's story resonates with many traders who face losses. He struggled for ten years before finding success. His journey underscores the importance of persistence, learning from mistakes, and continuous self-improvement.
Three Feet from Gold:
The book "Three Feet from Gold" by Greg Reid narrates the story of R.U. Darby during the Gold Rush. Darby's decision to give up just three feet away from a significant discovery illustrates the importance of persistence in the face of challenges.
Success Defined:
Resiliency in entrepreneurship and trading isn't just about financial gains. It extends to being in flow with life, making informed decisions, and undergoing personal development. It raises the fundamental question: What defines success?
Incrementals and Perfectionism:
The journey to success is marked by incremental changes, not monumental shifts. Resilience is built through small, consistent efforts that yield significant results. Perfectionism, often a form of procrastination, is an obstacle that resilient individuals overcome.
Documenting and Reflecting:
Both entrepreneurs and traders document their journeys, tying into the concept of business plans and trading journals. This documentation not only aids in learning from mistakes but also contributes to ongoing self-development.
In the grand scheme, resiliency trumps luck. Entrepreneurs and traders navigate through losses, setbacks, and challenges, emerging stronger and more capable. The journey is not just about financial success but a continuous process of self-improvement and development. Resilience is the common thread that ties together those who create their opportunities and print their own success.
Notes:
Related HTA episodes:
Ep 21 - Market Resiliency.
Ep 39 - Mental Resiliency.
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