Episode 244: The Retirement Lie — Part 2

by producer on April 9, 2014

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Episode 244 of The Traders Podcast is Part 2 of Scott Welsh’s “The Retirement Lie.” (So, if you haven’t heard the previous episode yet, please go back and listen to Episode 243: The Retirement Lie – Part 1 prior to playing this one.) Your usual host, Rob Booker, is enjoying a two-week vacation from podcasting, so for the next few episodes, The Coach Scott Welsh will be our guest host.

And in this second episode of four, Scott tells us more about “The Retirement Lie.” Scott begins this episode by discussing a Wall Street Journal article that examines this Retirement Lie. Scott says there are two questions he wants us to think about regarding our retirement: 1.) How can I retire as fast as possible? 2.) Since I like my job, how much can I save? Yes, Scott also addresses the question: What if I don’t want to retire? So, you’re going to hear Scott run the numbers and explain “the vision” to Jason. Don’t miss this one! And thanks for listening.

Links for this episode:

Scott’s Blog

E-mail Scott: ScotWelsh ( AT ) gmail ( DOT ) com

Scott on Twitter: @SWelsh66

Call and leave us a voice mail: (801) 382-8789

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

E-mail us! Producer@TradersPodcast.com

Trader Interviews.com

{ 2 comments… read them below or add one }

FxCave April 9, 2014 at 6:59 pm

Scott,

What Platform do you have your robots made for? Are your robots made with a proprietary or a common-popular programing or scripting language?

Cavex

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Brian April 11, 2014 at 7:27 pm

I say all the time that trading is 90% defense and only 10% offense, so it’s funny that I immediately took a shine to Scott giving a full out offense speech about trading. However, he reminded me that the offensive game resembles the defensive game when it comes to compounding your account. He reminded me how easy it is to get rich if you just control your losses. In my office, I have posted a loss chart, showing how much you need to earn to get back to zero on a reduced account balance after a given loss. Lose 5%, you only need 5.3% to get back to zero. Lose 20%, you need 25%. But lose 50%, you need 100% to get back to the starting point. There’s a very steep continental shelf under the waters of trading and it’s easy to step over the lip and drown.

Immersed in this dark world, it’s easy to forget that this “compound interest” effect works in reverse. And then Scott appears to shine a light for us all. If you can control your losses, seemingly small individual wins have an incredible power to compound your account and make you rich. We generally don’t see this because our human minds want to focus on the trade at hand where you just might make 7%, not 1000 trades in which you can make 100%. It’s really that simple, control losses and compound what you have. It requires an edge, money management and patience, but it is definitely easier to achieve the results we desire than buy and hold (and pray).

I knew all this stuff before, but knowing something and accepting something emotionally are two different things. I will keep these casts and listen to them over and over again, because they are a strong motivational shot in the arm.

Thanks Scott.

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