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arry works hard for his money. He can barely make ends meet in spite of the fact that he works a 50-hour week and an- other 10 hours on the weekend at a part-time job. He saves a few dollars each week, but the bulk of his money goes to pay bills and care for his family. By the time the bills are paid and the children are fed and clothed, the amount of money that remains is minimal. Larry believes that he will never have enough money to invest. The American dream is not his dream. After all, it takes money to make money, so if you don’t have money you’ll never strike it rich.Larry has surveyed his choices. He can either continue to work to make ends meet or he can strike out on his own. But to start his own business, he has to have starting capital, unless he can find a business that requires hardly any start-up capital. Are there other alternatives? Yes, there are a few. Before you read about his choices, however, remember that there are many Larrys
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out there. To a certain extent, we are all Larry unless we have big money. Here are a few of Larry’s choices:
Given his limited finances and never-ending stream of ex- penses, Larry could get a third job. But what will happen to his quality of life? How will he continue to give his wife and children the time they need? How about his own en- joyment? Will he work three jobs for the rest of his life?
When will the intensive effort end, giving Larry and his wife the time they want and need for a little enjoyment?
Clearly, this is not a very appealing option.
Larry’s wife Ellen could get a full-time job in addition to her full-time job at home. What will that do to their rela- tionship and their marriage? The stresses and strains are already substantial. And how will that affect the children?
Will they have sufficient care and nurturing? Without a doubt this is not a positive alternative, although there are millions of married couples that find themselves in this sit- uation given the cost of living in the United States.
Perhaps Larry and Ellen could start their own business.
This is indeed a very viable alternative and one that attracts many families. The good news is that Larry and his wife have their choice of quite a few home-based businesses. In fact, with the growth and development of Internet com- merce, such ventures as selling merchandise via online auction sites can be a very good business. However, it is be- coming a highly competitive area of commerce and takes skill and experience to make a profit. But this is true of all business ventures. Is there any bad news about starting your own business? It takes money, but the real issue is how much. More about this later.
Larry could buy one of the many courses or seminars ad- vertised on television, like zero-down real estate or some other business opportunity. Odds are that most of these will take more time, more money, and more effort than Larry wants to expend. Whether or not these business op- portunities work will be discussed more fully in Chapter 8.
Based on my understanding of these courses, it is unlikely they will work for you, or for Larry, in spite of what the promoters claim. The promoters of these courses make money on what is called the “up sell.” Their initial offer is low priced and reasonable, and they often break even or lose money with the hope that they can sell you a higher- end product, course, or video seminar.
Larry and his wife could take an entirely different direction and venture into the ultimate capitalist game: the stock market. They could become stock traders. To most people, this is the farthest thing from their minds. Yes, the propo- sition sounds scary, particularly if you have no idea what the stock market is or how you can make money in it. It can be intimidating. But then again, anything can be a chal- lenge if you have no experience. There’s no question you’ll have to expend some effort if you’re going to succeed.
The good news and bad news of this alternative will be dis- cussed more fully in Chapter 8.
On a less aggressive level than being a stock trader, Larry and his wife could become investors. Investors are differ- ent from traders by a function of the time frame in which they conduct their business. The good news about this ap- proach is that it proceeds slowly and steadily—and that’s also the bad news. By this, I mean that it will take a long time before Larry and Ellen can build a reasonably large
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nest egg. And in the interim, their immediate financial crisis will not ease up at all. What they need is immediate relief—quick action and quicker results.
The situation I have just described is not unique. There are millions of individuals and families who struggle daily to make ends meet. The paradox of this situation is that there are more opportunities to acquire wealth today than ever before. Markets and business opportunities exist throughout the world and are often as close as your computer. The sad news is that the student who graduates college with a bachelor’s degree will rarely make enough money to support an apartment, a car, car insurance, and a little money for entertainment and travel, let alone long- term investing or trading.