Jack Schwager is one of my favorite writers. His Market Wizards line of books is MUST reading for anyone interested in trading. The five books in this series are made up of interview after interview with the world’s most successful traders. You’ll find plenty of trading advice and endless motivation in these essential books.
You’ll also find advice on how to be successful at anything else you do in life. In these books, I’ve found that some of the shortest answers to Schwager’s questions offer the most profound advice on living a successful life.
In Hedge Fund Market Wizards, two short question-and-answer exchanges reveal what I believe to be one of the most honest answers about life’s “secret to success.”
The first exchange comes from Colm O’Shea, a global macro trader who started professionally trading in 1992 and, at the time of the interview, had never had a losing year.
Near the end of the interview, Schwager asks O’Shea, “Are there traits that determine who will be a successful trader?”
“Perseverance and the emotional resilience to keep coming back are critical because as a trader you get beaten up horribly. Frankly, if you don’t love it, there are much better things to do with your life.
“You can’t trade because you think it is a way to make a lot of money. That won’t cut it. No one who trades for the money is going to be any good. If successful traders were only motivated by the money, they would just stop after five years and enjoy the material things. They don’t. They continue well beyond any financial need. They can be somewhat obsessive. Trading is simply what they do.
“Jack Nicklaus has plenty of money. Why did he keep playing competitive golf well into his sixties? Probably because he really liked playing golf. He probably had a compulsive need to do it.”
In another interview, Schwager talks with Edward Thorp. Not only does Thorp have a long and distinguished career as a trader and fund manager, but this “Renaissance Man” also became famous for developing a proven system for winning in blackjack (he wrote the international bestseller, Beat the Dealer) and for being the first person to uncover that Bernie Madoff was a fraud.
Near the end of this fascinating interview, Schwager asks Thorp, “Do you have any advice for someone who wanted to pursue the markets as a challenge?”
Thorp responds succinctly:
“The approach that worked for me was the title of a book written much later by my ex-sister-in-law, Do What You Love and the Money Will Follow.”
How interesting it is that two hugely-successful, spectacularly-wealthy traders from much different backgrounds offer almost identical advice about how to be successful: Do what you love and the money will follow.
Too many people make the mistake of chasing money first.
Especially in trading, where you hear wonderful success stories about people who started small and became multimillionaires in a short period of time, it can be enticing to “chase the money.” But the most successful people in trading (and in any other endeavor), are those who find something they truly love doing, something they have a passion for. It’s this passion and the joy of doing it that keeps them going no matter what challenges may arise. And in a capitalistic society, it’s this passion that tends to become a magnet for extraordinary wealth.
Warren Buffett is often asked for his “secret to success.” His standard response goes something like this: “Find what you love to do and then find a way to make money doing it.”
If you want to succeed at something, you must follow the lead of those who have already done it. Whether you want to be a trader like those mentioned above or an entrepreneur like Steve Jobs or a writer like Stephen King, you’ll find that they all tend to repeat the same advice (in some form or another): Do what you love and the money will follow.
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