Making deals sounds fun and exiting, right? Not so fast. If you are survival always depended on striking deals, how stressed out would you be?
Imagine you had a period of success. For example, you had 1 or 2 months in which you had deals that gave you a surplus of money. Also, this was your sole income from a business in which you owned. Therefore, you had no steady paycheck. Ultimately, things have a tendency to even out. You have a slow month or 2. Initially, you do not worry because you accumulated some extra cash from previous months.
Yes, you were stressed out a tiny bit at first. But things came together and money was flowing in. Then the dry spell came. Within the first month, you changed none of your habits and were not worried. You assumed that since you had some recent success, more deals must be around the corner.
After that, the second month goes by and things are still sluggish. You begin to get concerned and start to ask when everything will return to normal. You still have some money left over so there is no need to panic yet. But, things start to get stressful. Consciously, you start to play the worst possible scenario game. You ask what happens if I can't make the home loan payment or purchase food a month or two from today. You ponder whether the last several good months were merely an exception.
After scrutinizing that, you look at your average income over the last year. Not bad. What if you had a salaried income and every two weeks you were assured to get paid? It would seem like you got a raise.
If your revenue depends on your own deals or by receiving a commission, you will not have a regular income. A steady income is simply worth more than earning the same overall amount that comes erratically. It's also much more nerve-wracking.
This is a huge reason why most successful speculators place more focus on risk than on returns. Managing risk first will relieve a lot of the stress that comes from deal making.
Imagine you had a period of success. For example, you had 1 or 2 months in which you had deals that gave you a surplus of money. Also, this was your sole income from a business in which you owned. Therefore, you had no steady paycheck. Ultimately, things have a tendency to even out. You have a slow month or 2. Initially, you do not worry because you accumulated some extra cash from previous months.
Yes, you were stressed out a tiny bit at first. But things came together and money was flowing in. Then the dry spell came. Within the first month, you changed none of your habits and were not worried. You assumed that since you had some recent success, more deals must be around the corner.
After that, the second month goes by and things are still sluggish. You begin to get concerned and start to ask when everything will return to normal. You still have some money left over so there is no need to panic yet. But, things start to get stressful. Consciously, you start to play the worst possible scenario game. You ask what happens if I can't make the home loan payment or purchase food a month or two from today. You ponder whether the last several good months were merely an exception.
After scrutinizing that, you look at your average income over the last year. Not bad. What if you had a salaried income and every two weeks you were assured to get paid? It would seem like you got a raise.
If your revenue depends on your own deals or by receiving a commission, you will not have a regular income. A steady income is simply worth more than earning the same overall amount that comes erratically. It's also much more nerve-wracking.
This is a huge reason why most successful speculators place more focus on risk than on returns. Managing risk first will relieve a lot of the stress that comes from deal making.
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