The elves living in my idea factory just went on strike and that means all I have are scraps with which to construct today’s blog. I think I’ll spout off on a few random things.

My wife and I just had our fourth child. She’s now four weeks old and still trying to figure out the whole sleep through the night business. With one more kid to juggle and various endeavors commanding more of my attention, I’m learning anew the importance of having a trading strategy that fits your lifestyle. If the only thing I knew how to do was day trade, then I honestly wouldn’t be doing much trading these days.

Thankfully I’m comfortable with and have always favored systems with a longer time frame and given my current circumstances I find it an even better match.

This is one reason why my biggest fear during a mentorship is that a client comes in guns a-blazin‘ with a desire to learn super short-term strategies while ignoring completely the other, more passive ways of building wealth. I’m not so much concerned if they end up being successful with this approach. It’s if they fail. Hear me out on this.

The worst thing that can happen to a newcomer to the investing world is they try to master a heavily skill-based, short-term system and fail – only to quit in frustration and reason that the markets are not for them.

So what? Now you’re relegated to putting your money in the bank from here on out?

No! No! No!

That will never work. Not unless you’re saving gobs and gobs of money every year. Rare is the bird that saved there way to wealth. Darn near anyone that I’ve heard of did so through investing, not saving.

They either built a business or invested in real estate or the financial markets.

Active trading with short-term directional strategies is fine. But it’s not the only way to use the financial markets to benefit you. There are other less skill-based methods for participating in the long-term growth of stocks. And I am saddened to think that some completely miss this boat because they were too quick to abandon hope.

Aside from requiring less skill, there is another benefit to embracing more passive or conservative methods of investing. As you get older and acquire more capital I highly doubt you’ll want all of your net worth leveraged into a short-term trading system. What of diversification? What of spreading your chips among aggressive and conservative investments?

Now, I suppose you could make the argument that those starting with a smaller nut aren’t too concerned about diversification and more conservative investments. To a young buck swinging a $5k portfolio, higher yielding, more aggressive systems are likely much more appealing.

I get it. My fear, however, is that they end up experiencing large losses or mixed results and then conclude that the financial markets aren’t for them.

The proper takeaway is that that particular system isn’t for them. Not right now at least. So learn something else. Figure out how to use the markets to your benefit. Don’t cast them off because your initial foray left you dissatisfied.