People are seduced by the bling and dazzle of pro athletes. I bet the average guy thinks pro athletes are swimming in cash set for life (some think that about all original Turtle traders, but clearly that is not true either!). Not so fast. Consider this excerpt from a recent ESPN article:
Filing for bankruptcy is a long-standing tradition for NBA players, 60% of whom, according to the Toronto Star, are broke five years after they retire. The other 40% deliver the Toronto Star.
Can you believe that? Guys who are paid monster sums of money go broke shortly after their careers end. In a round about way it’s why I always find the “starting capital” question (“How much do I need to start trading mister?”) so silly. Ed Seykota’s answer to that question is still the best. Seykota answers the starting question by asking, “how much money would you need to stop trading?”
It’s never really about how much you have, but rather it is about what you do with the limited capital you do have (and, yes, we all have limited capital).