Not too long ago, I attended a seminar and it was quite interesting. One of the instructor told us to pull $100 cash from our wallet and hold on to it. About 20 min. later, we saw a few candles that was lit in front of the stage and an empty bucket. The instructor then announces that we fall in line and walk towards the stage and asked us to āburnā our hard $100 cash in front of everybody. So, I was there in line like everyone else with my money in hand. As I was walking there thinking and asking myself why in the world would I burn my money? Are they crazy? We are all walking slowly until we reach the stage and the instructor asked us to stop. You can hear the sounds āa sign of reliefā because deep down no one wants to burn their money and afraid to say so lol⦠We are all afraid because we will look like stupid⦠a peer of pressure I should sayā¦
The instructor then asked us what goes to our mind while we are walking there and knowing we will burn this money. Are we going to burn it and why or why not? I donāt really want to burn it without any reasons as to why I should burn it. Some people say, they will burn it because they are not afraid of losing $100 and it is not a big deal to them. If that will make them successful, they will do it. Some says, they are undecided if they will burn it or not. So only few of us that says we will not burn our money.
This exercise is to show how you value your money. If you want to burn it without any reason or your only reasoning is because someone told you to do so, that means money is not that important to you. It is the same thing if you just throw a $100 out of the window. There is no value to you. We can always think about something where we spend money on that are less important to us.
If we apply this in trading, some people will think that we throw our money in trading. It can be true to some extent specially if we are losing and not seeing the result (profit) of what we are hoping to see. We can change that belief with each and every trade that we do , and because we value our money, we value our trades and only take trade(s) with the best possible probabilities of winning.
So, in your view, how do you value your money?