Starting capital/ grubstake

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actionzip54

I saw this and was wondering what others thought about this quote as I tend to agree with Eckhardt here. I also remember Marty Schwartz made a quote about how unless someone earns their grubstake they won't be successful.

“I know of a few multimillionaires who started trading with inherited wealth. In each case, they lost it all because they didn’t feel the pain when they were losing. In those formative first few years of trading, they felt they could afford to lose. You’re much better off going into the market on a shoestring, feeling that you can’t afford to lose. I’d rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions.” – William Eckhardt -
 
I think it's a bit more general than whether their accounts were inherited or self generated, it comes down to the basics of discipline and money management (the lack of which indicates a non professional trader). Trading with a small account is fine as long as you're goal is to have small gains and tiny losses. Keeping with the 'career trader' theme, it's a very bad idea to try and earn a living with a small account unless you're just leaving margin with your clearing firm and keeping the remainder in the bank.
 
I wasn't talking about earning a living from trading. I was talking about trading up from a small amount or starting with a solid base.
 
Quote from actionzip54:

I saw this and was wondering what others thought about this quote as I tend to agree with Eckhardt here. I also remember Marty Schwartz made a quote about how unless someone earns their grubstake they won't be successful.

“I know of a few multimillionaires who started trading with inherited wealth. In each case, they lost it all because they didn’t feel the pain when they were losing. In those formative first few years of trading, they felt they could afford to lose. You’re much better off going into the market on a shoestring, feeling that you can’t afford to lose. I’d rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions.” – William Eckhardt -
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He said he knows a "few multimillionaires" that started with inherited wealth but he didn't say he knows a "few that started out with a few thousand dollars" that did better than those that started with several millions.

My guess, both similar in % of failures.

Tough to say which is better as a newbie trader. I've seen too many traders get involved in trading while under-capitalized or trading with a small stake that they really can't afford to lose...resulting in them feeling like their life is coming to an end whenever they lose a few hundred bucks.
 
Quote from wrbtrader:

He said he knows a "few multimillionaires" that started with inherited wealth but he didn't say he knows a "few that started out with a few thousand dollars" that did better than those that started with several millions.

My guess, both similar in % of failures.

Tough to say which is better as a newbie trader. I've seen too many traders get involved in trading while under-capitalized or trading with a small stake that they really can't afford to lose...resulting in them feeling like their life is coming to an end whenever they lose a few hundred bucks.
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I'm sure being Richard Dennis's partner skewed his thinking on one over the other.

I'm just curious what others thought. I only think that smaller accounts would result in a few more winners because there is more incentive to succeed.
 
Quote from actionzip54:


“I know of a few multimillionaires who started trading with inherited wealth. In each case, they lost it all because they didn’t feel the pain when they were losing. In those formative first few years of trading, they felt they could afford to lose. You’re much better off going into the market on a shoestring, feeling that you can’t afford to lose. I’d rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions.” – William Eckhardt -
More...
It is useless because you have no choice but to start from a shoestring-- first case discussed does not apply.
 
good quote, it makes sense. I lost my grub stake plus some more, i felt every loss, it made me work really hard...
 
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