Getting Rich: Then What?

Hey there, fellow wealth seekers! If you're anything like me, you're constantly on the hunt for ways to build your wealth empire. You're scouring the internet for articles on how to earn $1,000 a day online, how to flourish in your career, and how to make your first million. You're dreaming big and thinking about how to build your billion-dollar startup. And, of course, you're always looking for the best stock market strategies and financial indicators.

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Regardless of where you are in your journey to creating wealth - whether you have a stable income to start with, some extra cash from a bonus, a revenue-generating company, or you're a fresh graduate just starting your career - there's something most materials won't tell you. It's not just about getting rich; it's also about staying rich. And that's where things get tricky. How do you keep your fortune - small or big - from slipping away? How do you ensure that you're always in the game to make it grow, no matter what curveballs life throws your way? And how does your brain work when it comes to managing your wealth?

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In this article, we'll explore the often-overlooked topic of how to stay wealthy. We'll delve into some surprising research on the psychology of wealth and provide you with hopefully an eye-opening story about wealth creation.

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Alright folks, hold on to your seats because this week's article is going to be a wild ride! We'll be diving into the minds of some of the most successful wealth creators in history and examining what makes them tick. But buckle up, because things might get a little intense.

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We'll be starting with the legendary Jesse Livermore, the man who made millions on Wall Street in the early 20th century. Livermore was a true pioneer in the world of investing, but his story is anything but simple. We'll be exploring what drove him to the top, and how he died.

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Now, I know some of you might be thinking, "Why should I care about some guy who made money a century ago?" Well, let me tell you, the lessons we can learn from Livermore's story are just as relevant today as they were back then. Plus, who doesn't love a good tale of rags to riches (to rags again)?

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But let's not get ahead of ourselves. We've got a lot of ground to cover and some seriously fascinating characters to explore. So, sit back, grab a cup of coffee (or any drink, depending on how you like your stories), and get ready to dive into the minds of the most successful wealth creators in history.

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Jesse Livermore may not be a household name, but in the world of finance and trading, he is a legend. Known as one of the greatest money makers and traders in the stock market, Livermore's insights and strategies continue to be studied and applied to this day. His book, "How to Trade in Stocks", is considered a must-read for anyone interested in the art of trading. And while Livermore's life may have been filled with its fair share of ups and downs, his legacy as a trading genius lives on, inspiring generations of traders to come. Let’s see how his life was, as per an article written on “thefamouspeople.com”.

·?????Jesse Lauriston Livermore was born on July 26, 1877, in Shrewsbury, Massachusetts. His father, Hiram Brooks Livermore, was a farmer. His mother’s name was Laura Esther Livermore. Born the youngest of his parents’ three children, he had a sister named Mabel Loraine Blethen and a brother called Elliot Livermore.

·?????When he was still a baby, his family moved to Acton, also in Massachusetts. It was here that he spent his formative years, receiving hardly any attention from his father. However, his mother was determined to give him a proper upbringing.

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·?????An intelligent child, he learned to read and write at the age of three and half. By the time he was five, he was reading newspapers including the financial pages.

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·?????In grammar school, he showed excellent talent in numbers, especially in mental mathematics, completing three years’ mathematics syllabus in just one year. But as he turned fourteen, his father pulled him out of school to employ him at the farm.

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·?????The move not only devastated him but also his mother. She, therefore, gave him $5 and put him on a carriage with clear instructions that he should be dropped off at a certain address.

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·?????Instead of going to the fixed destination, Jesse managed to convince the driver to drop him off at Paine Webber, a stockbroker in Boston. Here he managed to get a job, earning $5 a week as a board boy.

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·?????In 1892, at the age of 15, he took his first plunge, betting $5 on Chicago, Burlington, and Quincy Railroad at a bucket shop, which allowed customers to bet on stocks and securities without actually owning them. He earned $3.12 on his first bet.

·?????By sixteen, his earnings from the bucket shop far exceeded his income from Paine Webber. Consequently, he started trading full-time at the bucket shop, sometimes under disguise, always making profits.

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·?????By 1899, Jesse Livermore had made $10,000, and with that, he moved to New York City, where he began trading at Wall Street. But very soon, he lost the entire sum because the ticker’s tape was lagging by thirty to forty minutes, making it impossible to make the correct decision.

·?????After losing heavily at Wall Street, Jesse borrowed $500 and he moved to St. Louis to trade in virgin territory. People at St. Louis didn’t have the knowledge of successful bucket shop trading skills that Jesse Livermore had.

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·?????After a successful run, he returned to New York with $2,500, repaid his $500 loan, and decided to trade on both the NYSE and the bucket shops. In 1901, he returned to Wall Street, the same year buying stock in Northern Pacific Railway, shortly turning his $10,000 into $500,000.

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·?????On April 17, 1906, he took a massive short position on Union Pacific Railroad. The next day, San Francisco was hit with a terrible earthquake, earning him a $250,000 profit.

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·?????In October 1907, when the New York Stock Exchange fell nearly 50% from its peak in the previous year, creating Bankers’ Panic, he took another short position, earning $1,000,000 in a single day. However, he refrained from taking further shorts at the request of his mentor J.P. Morgan.

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·?????Instead of taking shorts, he now started buying as many shares as he could, encouraging others to do so, leading to early recovery of the share prices. While doing so, he made a huge profit, taking his total worth to $3 million, and becoming a hero in the eyes of other traders.

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·?????He now started living extravagantly. He bought an apartment on the Upper West Side, a rail car, and a yacht worth $200,000. In the meanwhile, he continued to trade, very soon, having $5 million to his name.

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·?????In 1908, he had his second fall when on the advice of a commodity trader named Teddy Price, he began to buy cotton, not knowing that Price was actually selling his shares. As a result, he lost almost 90% of what he had made in the previous year.

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·?????After 1908, his losses began to grow and eventually he accumulated a debt of $1 million. In 1915, he was forced to declare bankruptcy. But shortly, he was offered a trading facility of 500 shares, which he used judiciously and by 1917, he was back on the Wall Street.

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·?????In 1918, he began to invest heavily in cotton, trying to corner the market; but gave it up at the request of President Woodrow Wilson, who had invited him to the White House. Thereafter, he continued to trade, netting approximately $100 million upon the Wall Street crash in September-October 1929.

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·?????In the early 1930s, because of some personal problems, he began to lose mental equilibrium. With the launch of the U.S. Securities and Exchange Commission in 1934 his trading was also affected.

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·?????In 1934, he declared bankruptcy for the second time, and his membership at the Chicago Board of Trade was suspended. Although he believed he could make a comeback, it never happened.

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·?????In 1937, he was in a position to pay off his $800,000 tax bill, and in 1939 he opened a financial advisory business, where he sold a technical analysis system. But his liabilities remained greater than his assets.

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·?????On November 28, 1940, Jesse Livermore killed himself with an Automatic Colt Pistol in the cloakroom of the Sherry-Netherland Hotel in Manhattan. He was then sixty-three years old.

·?????Police found a suicide note of eight small handwritten pages in Livermore's personal, leather-bound notebook. The note was addressed to Livermore's wife, Harriet (whom Livermore nicknamed "Nina") and it read, "My dear Nina: Can't help it. Things have been bad with me. I am tired of fighting. Can't carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love Laurie".

Let's break it down and analyze what went down in Jesse Livermore's rollercoaster journey:

• He rebelled against his situation like a renegade warrior!
• He devised his own unique, intelligent way of making money and creating wealth. Innovation at its finest!
• He took extensive risks that paid off in big ways. YES, am I right?
• Despite facing numerous setbacks, and his money was wiped out two times he persevered and came up with creative solutions. Nothing could stop him!
• He expanded his lifestyle aggressively to reflect his power and satisfaction from being wealthy. Living the dream!

Unfortunately, he was unable to maintain his mental health and ultimately took his own life. His focus had solely been on getting rich quickly without any consideration for staying in the game and preserving his wealth. He couldn't shift his mindset to tackle the toughest part of the journey. In my humble opinion, his wealth was built on developing aggressive habits along the way, despite his intelligence in stock picking and investment decisions. However, the reality is that most of our minds cannot handle too much mental stress in an already stressful world.

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As Business Insider wrote:

“Though his money didn't last, his wisdom stayed with generations of traders, and his mistakes became the encouragement and lessons for traders today”.

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When you build wealth through a major personal achievement, luck, or aggressive habits, it's hard to change course because you think it worked before, so it will keep working. This is a mistake that many people throughout history have made, and it continues to happen today.

We can learn a lot from Jesse Livermore's story about his investment techniques that are considered an inspiration to many traders, but it's important to dig deeper into the lessons we need to avoid as well.

This may take us to the brighter side of wealth-building stories and a comparison of what was happening in Livermore's brain with that of investment genius Warren Buffet. Both knew how to make money in the stock market, but with one major difference; Buffet knew how to stay wealthy!

In our next article, we'll dive deep into Warren Buffet's brain and try to analyze what might be happening inside, how he was able to maintain & growing his wealth steadily for so long, and what happened when he was 60 years old almost the same age as Livermore sadly took his life. Is there something else other than his intelligent methods of picking investments?! Stay in the game! Stay tuned!

Sources:

https://www.thefamouspeople.com/profiles/jesse-livermore-3888.php

Jesse Livermore - Wikipedia

The Life of Jesse Livermore (businessinsider.com)

The Psychology of Money, by Morgan Housel.

Image by jannoon028 on Freepik

Disclaimer: The information provided in this article is for general informational purposes only and should not be considered as investment advice. I do not guarantee the accuracy, completeness, or usefulness of any information presented in this article. It is important to do your own research and consult with a professional financial advisor before making any investment decisions.

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