They don’t teach you financial discipline in school.
In fact, most students graduate college without the slightest idea of how to open their own bank account, apply for a credit card (and maintain good credit), or keep a monthly budget. Furthermore, according to CNBC, “More than half of all Americans have less than $1,000 in their savings accounts.” Most people, in other words, don’t have anything saved at all!
As a result, most young people in this day and age are forced to learn about financial freedom and best practices on their own time. With the Internet, information like how to apply for a credit card or what sort of IRA account you should open is widely available … and right alongside it, you’ll find reams of insight from ambitious entrepreneurs who have forged their own way and learned how to manage their money responsibly.
If you’ve spent any time at all searching for finance-related content, you’ve most likely come across something written by Timothy Sykes. He is an entrepreneur with a strong personal brand, best known for becoming a self-made millionaire by trading penny stocks.
But if you’ve ever listened to Sykes speak about his experiences as a trader and financial guru, you’ll note that he doesn’t emphasize the moneymaking part nearly as much as he does the positive impact individuals can have through a disciplined approach to their own finances.
I had the opportunity to chat with Sykes about what drives him and his business. What he shared was more about the underlying habits he teaches his students regarding discipline and self-awareness than about making the big bucks.
“People think it’s all about the money,” he said, “because that’s what is easy for me to narrate on social media. I have pictures of a million dollars in cash. My charities are funded by money. The stock market is all about money. It’s next to impossible for me to try to show what I do on social media without mentioning money—when really what I want to teach people has far more to do with discipline, patience, and setting rules for yourself that will move you forward financially.”
He went on to explain that wealth can influence happiness, because it can buy you freedom, but wealth for wealth’s sake can also be a prison. There has to be a balance.
“I wouldn’t be able to travel without wealth,” he said. “I wouldn’t be able to donate to charities I care about or start new initiatives. But money does not buy happiness. If you use the wealth you build for yourself the wrong way, it can actually buy the opposite. It can buy misery. Some of the happiest people I’ve met in other countries, like in Laos, have nothing at all. They have no shoes, and they don’t care. They have their lives, their family, and they are alive. That’s why I feel it’s so important to show both sides, even though my entire professional life is based around teaching others how to become financially independent and successful. Because success in itself gets boring after a while.”
With this sort of well-rounded approach to the goal of financial freedom, it’s no wonder that Sykes has thousands of students all over the world. He explained that in order to become financially independent and make money as a trader, you have to reframe the goal in your mind. In a sense, you have to train yourself to go into every trade and every investment with a plan, which can be tough. When your losses are mounting, you have to know when to drop what you’re doing and move on.
“My No. 1 rule is to cut losses quickly,” he said. “I’m not right 100% of the time. I’m probably right 70% of the time. And what I remind people is that I don’t have any magic formula. I’m just disciplined. I’ve learned to really monitor my losses and not let small mistakes turn into big disasters.”
For Sykes, the first step to becoming a successful investor is to start with a giant, very difficult goal. That way, you go into everything knowing this isn’t a sprint, it’s a marathon. This isn’t about having one good trade or one good day. It’s about creating habits and systems and long-term discipline that carry you through to the end.
“I say this to my students all the time,” he said. “Come up with something that’s going to take you forever. And then, every day, work toward that. This is why I post pictures of stacks of a million dollars in cash on social media. You don’t need to make a million dollars to be happy. But by asking yourself what you have to do to get to a million dollars—that’s what forces you to have good habits, which is what I’m really trying to teach.”
Finally, I asked Sykes what advice he would give to someone who didn’t have a clear direction for what they want to do with their life.
“If there’s one thing I’ve learned in 113 countries now, it’s that everyone is different,” said Sykes. “We all have different personalities, goals, skill sets, weaknesses, strengths, backgrounds. So what you need to figure out is what you love—and be willing to adapt over and over again until you figure that out. If I had always just been a trader, I wouldn’t have branched out and found other things I love just as much, if not more. I love teaching. I love working with charities. I love doing other things besides sitting in front of a computer screen staring at numbers all day. But a big part of that journey of self-discovery is having financial control over your life. So, wherever you have to start, start there, and then be willing to adapt as you go along.”
