5 Lessons to be Learned from the Wolf of Wall Street


What Wall Street Doesn’t Want You to Think About

In one of the early scenes in “The Wolf of Wall Street” Matthew Mc Conaughey takes Leonardo Di Caprio out to lunch on his first day of work as a stock broker and goes into an explanation of what his job is going to be. “The name of the game is to move the money from your client’s pocket into yours” and DiCaprio replys, “If you can make money for your clients at the same time it’s advantageous for everyone, correct?” to which Mc Conaughey replies, “NO”.  He goes on to explain how they get clients involved with blue chip stocks to start with and then move on to high commission high risk issues and trades them until nothing is left.

This film offended many with the sex, drugs, violence and foul language which, unfortunately, caused many folks to miss the real message of the film. It brought me back more than 30 years, to when I joined the brokerage world filled with optimism and excitement of helping people make money and amassing wealth. Over the next two years, my career ended up becoming a series of battles with management over doing what was in the best interest of the client. I finally left the brokerage world after trying another firm, only to find that the focus there also was on how much I was earning for myself and the firm, not the client. In fact, during my time as a broker, one of the many warped jokes that was circulated went like this; “Did you know that 3 out of 4 people make money in the markets? The broker, the brokerage house and the market maker…” You can figure out who the fourth participant was.

So what are the 5 takeaways you should have from the film?

  1. Greed makes for bad decision making. Nobody will ever call you and say, “gee you should buy this investment, you could make money or lose 20% in the next year”. The focus is always on cashing in big.
  2. Wall Street doesn’t care about you. Clients are a necessary evil. After all, the money has to come from somewhere. I have heard folks say, “ the market screwed me” after a loss. Remember, the market doesn’t even know who you are.
  3. The most important thing is the return OF my money, not the return ON my money. This quote is often attributed to Will Rogers, but is more important to remember today than ever.  As Matthew Mc Conaughey explained at the lunch, we don’t give the money back, we trade it until it is gone.
  4. When an advisor touts big returns, it usually means big losses are around the corner.There is a reason it is called risk. Generally speaking, the bigger the risk, the bigger the commission.
  5. Desperate people do desperate things. Once a wall streeter gets used to the “good life” they will do almost anything to keep up the lifestyle. Think Bernie Madoff and a host of others too numerous to mention here.

At the end of the day, it is your money and nobody will care more than you do. Ask questions, understand the answers and above all, know what you are trying to accomplish. This will allow you to know whether an investment or strategy will help you realize the future you have designed. Here at Gainer Financial, we are committed to helping clients clarify the vision of their future and make plans to achieve that vision. Contact us if you are interested in understanding more about how to achieve the financial security you deserve.

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