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MONEY MANAGEMENT TIP #7: NEVER WIRE HOME FOR MORE MONEY!

November 7th, 2011

NEVER WIRE HOME FOR MORE MONEY: Don’t borrow money or dip into your long-term security assets for the purpose of speculating. Understand that making money in the stock market is never a sure thing and sometimes you’ll be flat-out wrong. Face the reality that sometimes you will win and sometimes you will lose. But at the same time, don’t make the foolish mistake of thinking that success in the stock market is just a matter of luck.

The major cause of consistent failure can always be traced to either: (1) playing the market incorrectly, or (2) managing your money unwisely. The smarter alternative is to take a health break from the action in order to clear your head, learn from your mistakes, and refine your approach to suit your individual situation. Then you can carefully rebalance your asset allocation plan to desired cash levels in order to play again at another time.

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Note: The game of casino craps is a perfect illustration of how strong the desire is to get back to even after sustaining a loss. But this desire comes from an unhealthy emotional source which boils down to the need to be right. So it’s smart to set a rule for yourself that you will never wire home for money when your gambling in Las Vegas and you’ll never dip into your “security assets” to fulfill your trading urges.

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