Don't Start with Trading! It Cost Me 5 Years

[00:02] , my capital would be many times larger now. And it’s not even that I bought some bad assets. It's not about crises, sanctions, or about crises, sanctions, or bad luck, but about the fact that I had three

[00:15] fundamental errors in my thinking. It was these mistakes that set me back several years. [music] Hello everyone, friends. My name is Sergey. This is the Ikigai channel. And in this video, I'll reveal my three biggest mistakes in

[00:29] investing [music] and trading over the past 10 years. So, let's get started . Mistake number one. I started with trading, not investing. [music] wanted freedom of time and movement. That is, not to waste

[00:45] time on earning money and not to depend on one place. Trading seemed like the perfect option to me back then, because you can earn money quickly; you just click buttons and in a couple of minutes you'll be earning money. And at that

[01:00] time, without having a lot of knowledge, I thought that after some time, after I learned, I would be able to earn a lot of money consistently through trading. This will give me the very freedom that I wanted. Many people [music]

[01:16] also look for freedom from any of their financial problems in trading. For example, people think that trading will help them pay off their debts quickly. [music] And it is in this illusion of freedom that the first trap begins. Since my mistake is

[01:31] that I started with trading and not [music] with investing, I will compare these two activities. First, let's compare the average returns. For experienced traders, the average annual return is approximately

[01:46] 30-40%. While the stock market, for example, take the S&P 500 index, has an average annual return of 10%. Everyone, when comparing these returns, immediately understands that the returns in trading are

[02:00] understands that the returns in trading are definitely higher, so it makes more sense to focus on trading. And here the mistake lies in the fact that people only compare the profitability, but do not compare the probability of receiving this

[02:14] profitability. While in long-term investments [music] most investors earn along with economic growth, in trading only 1 dash 5% of all traders earn. [music] And

[02:28] even this small percentage may stop earning money over time. That is, when deciding to engage in trading, most people look at the average annual profitability of experienced traders, but at the same time ignore the likelihood of

[02:43] making money in the market at all. And the probability of earning on average is approximately of earning on average is approximately 3%. Not only do you first need to traders who actually make money in the market, but you also

[02:58] need to outperform the global markets with your trading system. And in the long term, almost [music] no trader can outperform the profitability of global markets, because over time they either experience a deep

[03:11] drawdown or completely lose their deposit. That is, if you look at it mathematically, at the very beginning I chose the path with the minimum probability of success and the maximum risks, instead of simply investing in reliable assets

[03:25] and earning [music] as the markets grew. And here it is important to make a remark about the entry threshold. If [music] in investments the entry threshold is minimal, then in trading it is maximal. To make money from investments, you simply

[03:39] need to regularly invest in reliable assets, and you will already earn money assets, and you will already earn money through dividends, coupons, and economic growth. [music] And to make money from trading, you

[03:52] first need to spend years learning. All this time, you will most likely be wasting your money, and only then will you be able to somehow start earning money on an unsteady basis. In one month you will have a plus. in

[04:07] another - minus, in the third - breakeven. And in the long term, you're still unlikely to outperform global markets. I won't be too categorical and will say that there are unique people for whom

[04:19] earning money through trading is suitable. But I would recommend almost everyone, 99%, to invest, and use trading as an additional way to increase capital if you can make

[04:34] money from it. And here we smoothly move on to my second mistake in thinking, which explains why I, as well as many other people, do not consider investing [music] as a way to earn money. So, my main mistake number two. I thought that

[04:51] investing [in music] required capital. It seemed to me that I first needed to accumulate capital through trading, and only then, when I had a large deposit, [music] I could start investing. And many now

[05:04] act according to the same logic. But the question is, where does capital come from? The point is that capital is not formed before investments, [music] it is formed strictly through investments. That is, we must have a regular savings rate,

[05:21] thanks to which we build up our capital. But for trading, on the contrary, you need capital, since without capital you

[05:33] through investments. Next, when we have a small capital, we can take a small part of it, for example, 10% and use it for trading. Moreover, 10% of the capital is the maximum deposit. Until you

[05:49] have stable positive statistics, I recommend starting with 1% of your capital. And then, as soon as you manage to get into [music] plus, gradually increase the percentage of capital. And it is important to note that you can’t live off trading under any

[06:03] circumstances. All profits from trading must be since trading is an additional way to increase capital. Let me briefly summarize. While there is no capital, every free dollar needs to

[06:17] be invested. not capital first, then investment, but investment and capital formation first, and only then trading. There is a very good verse in the Bible that reflects the principle of capital formation. Proverbs

[06:33] 1311. Wealth that is quickly gained melts away, but he who accumulates little by little accumulates much. That is, capital is formed not by accelerating a deposit, not by some successful deal, not by purchasing altcoins, but by constant

[06:48] regular actions [music] and discipline. At first, growth seems slow, but through repeated actions, compound interest begins to work actions, compound interest begins to work . And it's like the Fibonacci golden spiral

[07:00] , where repeating the same action [music] causes the whole structure to expand. The longer you perform the same action regularly, the more the rate of

[07:12] progress increases. This can also be compared to how bamboo grows. That is, first a how bamboo grows. That is, first a root system is formed underground. It can grow for a long time, several years, without producing any visible

[07:24] shoots. But then rapid growth occurs. Once the system is formed, once time has passed, the bamboo grows rapidly. And given this fact, we now move on to my main mistake number three. I was thinking about scale,

[07:41] not system. That is, I didn’t see the point in sticking to the system while I didn’t have scale, while I had a small income, a small deposit, and so on. It seems that at first you can neglect the system, increase risks,

[07:54] quickly increase the deposit, and only then think about creating a full-fledged system and its implementation. But the point is that scale without a system doesn't work. Let's say what happens if a person is given a large sum of money, but still

[08:08] maintains the same [music] negative financial habits? He'll just lose more faster. There are many examples of [music] people winning large sums of money in casinos or lotteries, and then

[08:22] losing it all because they lacked financial literacy and continued the same bad financial habits. Therefore, if you are lucky and manage to increase your deposit [music] in trading, then after a short period of

[08:36] time you will lose these funds and lose even more, because you will want to repeat this chaotic success. At the very beginning, I also tried to increase deposits, but then I realized how much time was wasted. If

[08:52] I had initially adhered to a certain financial system, [music] then my capital would now be many times larger. This system includes accounting and control of income and expenses, savings rate, financial

[09:07] safety net, [music] investment statement, diversification, regular actions and compound interest. That is, everything is the other way around. First [music] is a system, and then through the system the scale is born. And if I could go back

[09:22] to the very beginning, I would take off my rose-colored glasses and immediately start adhering to the financial [music] system. Then I would have saved myself years of wasted time. It was the awareness of these mistakes that formed the basis for

[09:37] the creation of the first [music] stage of training, which we recently opened. With this educational program, I want to save people from the wrong path, [music] save them years and improve their

[09:50] financial literacy so that they can immediately build their capital and move towards financial freedom. [music] The link is in the description. The most expensive mistake in investing is not losing money. The most expensive mistake is

[10:05] wasting years of compound interest. You can earn money again, but you can't get your time back . If my experience helps you start earlier than I did, then all those mistakes I made [music]

[10:21] were not in vain. Friends, if this video was useful for you, I would be grateful for your support in the form of likes and comments. I recommend new viewers subscribe to the channel to improve their financial literacy. I'd

[10:34] also like to remind you that we have a Telegram channel where we regularly publish channel where we regularly publish market reviews. The QR code has now appeared on your screen. I wish you all the best. Profit to everyone,

[10:46] best. Profit to everyone, win. I love you all and bye to everyone.