How Reading a Book Saved Me $20,000 in Two Weeks

I learned about T. Harv Eker’s book Secrets of the Millionaire Mind through a mention on Steve Pavlina’s blog. I’m generally not interested in the genre of get-rich-quick books, but this book was interesting because it was more about metaphysical concepts than you would think, with a lot of insights about how people’s minds work. I ignored the occasional pitches to attend his seminars, but still it’s a good book for anyone who wonders why some people seem to be preprogrammed for stupid financial behavior, regardless of their income level.

One of the key concepts I got from the book is that yearly income is not nearly as important as net worth. Eker’s description of how wealthy people never talk about “getting a big raise” really drove this point home for me. A related point is that people who are wealthy make a conscious effort to keep track of their finances.

I have to admit that I’ve never bothered to be on top of money issues. Any success I’ve had in this area has largely resulted from luck and fortunate timing. For some reason I had a mental block against caring too much about this kind of stuff in detail. Reading Eker helped me realize that is really stupid.

So, the day after I finished the book I downloaded a trial version of Microsoft Money. I spent a Sunday afternoon setting it up with my accounts, time that I would have otherwise wasted playing a computer game. After setting everything up, I ran some of the reports that Money generates, and noticed that a significant percentage of my net worth was concentrated in a single stock. This stock was a “ten-bagger” and I had been very happy with it. I knew it was a big part of my portfolio but having it shown on a pie chart made it more real.

I’d always thought that people who lost their life savings in Enron etc. were dumb for risking everything on one shady company. But here I was doing the same thing, and according to MS Money, the company I was heavily invested in was releasing an earnings report in a couple of weeks. I suddenly got a very bad feeling about it all, and the next day as I was placing my $9 discount broker sell orders, I was muttering “Dump it” as if I were Gordon Gekko.

Well, based on the title of this post you can probably tell how it ends. After I sold, the stock slid ever downward, and when the earnings report came out, it dropped like a brick.

I never would have bothered to check up on that stock were it not for Eker’s book inspiring me to set up MS Money. That is the best return on $15 I’ve ever gotten, for sure. Since I’m still using the trial version of MS Money, that hasn’t even cost me anything yet :) .

Written by Parker on August 5th, 2006 with comments disabled.
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