This is a guest post from John S. John is the founder of Frugal Rules , a dad, a husband and a veteran of the financial services industry. Follow him on Twitter. Learn investment lessons during his years working as an online trading broker. For four and a half years I dragged myself dutifully to a job that did not suit me ideally. I lived for weekends when I could spend time with my wife and three young children.

Shortly after our youngest son was born, I left that job to start my own business. What I do miss are the stories. Every day, I spoke with average investors, most of whom had absolutely no idea what they were doing with their money. As a licensed stockbroker, I wanted to point them in the direction of wise financial dealings, but I was hamstrung to give them guidance.

I took about 80 to calls a day. Once a month I spoke with someone who had a good handle of his investment account. He enjoyed a very decent rate of return of about 10 percent per year on his equity investments.

This is despite the lean recession years and the times when the major indices were rising and falling more times in a day than a yo-yo in the hands of a cub scout. From what he told me, he went to college, worked hard at a good-paying job and lived frugally. With no student loans, he was able to invest 50 percent of what he made each year.

He had a diversified portfolio and he kept a close eye on it. He made good investment choices that paid off for him with nice gains. Matt taught me to stick to my investment strategy. Seeing his success reminded me to stick with my investing plan and passionately pursue my financial goals. Unfortunately, Matt was not the typical investor. They hope that by purchasing k shares of the Amazing Electrical Spatula Company at.

Some investors would use derogatory terms and hurl racial epithets toward others. And I had to politely, quietly listen since I represented my employer and not myself.

Then, some investors were just downright unbalanced when it came to investing. Crazy callers like this one taught me to keep a firm grip on reality when it comes to investing my money. From them, I learned the importance of not letting emotion sway my investing decisions, one of the hardest disciplines to master. GRS is committed to helping our readers save and achieve their financial goals.

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Hello to all, I have read your blog and it is very interesting to me. I am currently 28 years old, I work full time but not making enough money to live off of. I am a single father and became intrigued in the stock market field. In this country it is a good way to invest wisely and reap the benefits. I would like steady income to just enjoy life. Nice content… The best online broker is very important for the successful investment.

So choose with care. I am an individual investor from the Netherlands and guide HNWIs in asking the right questions to their advisors. Ask other people to challenge you in explaining why you have choosen a certain strategy instead of convincing yourself. I am individual investor from India. I can relate to Matt.

I work in IT, make good money, live well below my means, save a lot and then invest the savings in stocks. No FD, no bonds just stocks. I am in mid 40 and want to retire by I think I can live off my funds and my skill as value investor even now. How did I achieve it? By sheer hard work, education, discipline and solid process that made people like Ben Graham, Buffet and peter Lynch successful.

I am value investor. I invest in stocks that are selling below their intrinsic value. Yes it can be done. But is it for every one? Needs certain kind of temperament than just IQ. But for those who have it I will advise them to go for it. Is it a gamble? What I heard from many people who has deep pockets enough to join the stock trade is that — they need a little luck. I also worked as a registered representative for the big banks, and I could tell you many war-stories.

The stories are the best part of the job. The worst is that you are forced to sell people poor financial products and charge them too much to do it? I also packed up my stuff and took a lower paying job working as a non-profit financial counselor.

No conflict of interest there. No intense selling pressure. I bought X, shares! It was a competition against one another rather than planning for their futures. Years ago and very naive I so very impressed with brokers knowledge until I attended a workshop with several former brokers in attendence. I found out that whatever big investers ie pension funds etc are dumping becomes the flavor of the day. The brokerage houses never turn down business from large investors and since they did not want to have these stocks in inventory and incur a potential loss those stocks were then heavily marketed to small investors.

So beware, whatever your broker recommends may just be the flavor of the day ie. Liked your 3 stories. There is another type of client as well-who goes with someone else because you told the truth, but the other broker told a better story.

I lost a k order once because I told the prospect that there was interest rate risk with their prospective bond fund purchase. They went with someone else. They bought the exact same thing elsewhere. Ah, yes, I had a few of those myself Dana. It was part of the reason why I left actually.

It just got to the point where I could not live with myself being told I basically had to lie to get business. I love getting more business, but not at the expense of violating my conscience. My parents, who lived in Seattle, were pretty decent investors. At my office then, shares were doled out in 25 share increments due to the low allocation to our branch office. MSFT was quite a risky investment back then.

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Rest assured that your parents were not alone in their assessment. Wow, too bad about that. Then again I also was offered an investment in a new type of gear mechanism that would revolutionize motor vehicles.

Glad I blew that one off. Nobody brags about their actual losers, or even their so-so investments. Just their wins and the big ones that got away. I like what the poster said — too many people invest with their emotions. I think this shows that there are still many people that invest with their emotions, not rationale. If I saw people out of 10 making decisions based off of reason that was a good day. If I were to sum up the lessons from Matt, Glenda and Tony in a single statement: Temperaments and emotions play a far promiment role in our financial decisions than we care to admit.

That said, hard work, commitment and a plan that you stick with can do wonders for your investing. I came from an academic background and knew nothing about finances from either college or graduate school mentors.

However a mutual friend who worked at the same university I went to graduate school who was older than me, after talking to him found out that he had a sizeable amount in his retirement fund, and really, could retire at any time.

Despite increases in his salary, he fixed up the house himself as a hobby, paid it off long ago, and put the excess into his retirement fund. What kind of business did you start? I wish I had your courage. I find myself, after 36 years with the same company, bored, discouraged with new management, and hard to work up enthusiasm for a job that I loved for so many years. Now, 6 years from retirement, I feel trapped by the generous vacation time, good benefits, and profit sharing plan.

I am sorry to hear that Debi and can completely understand not wanting to take a serious salary cut now. My wife and I run an advertising business, and to be fair she had started it about two years before I quit and was needing help running it. That must have been a real soul draining experience.

Oh, if you only knew Derek. Soul draining is a great way to put it. He sounds like a smart guy. These are definitely some great lessons for anyone out there interested in investing. I guess watching my Dad invest while I was growing up taught me to buy and hold solid, large company stocks. He hardly ever traded stocks, but believed that owning stocks was critical to financial independence. I think if he were alive today, he would understand the benefits of these types of funds.

So many of us do not see that, which is a shame. Only last Saturday at a wedding the father of the bride told me that he would invest in a shoe producing company. I then asked him why he wanted to invest in it?

He answered that the daughter of a relative of his had started to work there and now for sure the company would start to perform even better this is a company with over 40k employees and she was not in the management group. How are the competitors doing? He could not answer any of those things.

I then kindly asked him to please look into those things before he even would take the decision to make the investment. I at least hope that he listened to that advice but I doubt it….

Unfortunately, the clients you spoke of that are all over the place, often have a financial advisor that is also just focused on what the commission payout will be. Very little regard for whether this product they are selling is truly better than the rest or if they are just selling to sell.

This leads to the industry getting a bad name. There are good advisors out there like Jeff Rose of Good Financial Cents and you seem to have a good long term approach to investing not trading but there are more bad apples, iMO, then good.

I agree that there are unfortunately too many bad apples out there in terms of advisors. Great point on more needing to take responsibility for greater financial literacy and understanding of how to manage ones investments. The more I read other personal finance blogs the more I find out about them. It makes me believe even more strongly in frugal, balanced living and sound investing strategies.

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There are a few of them out there. I guess its easy to be a sound investor like Matt when you have money to invest. I think the lottery book of investing is appealing to the desperate low earners. What sort of statement is that? He saved his money and planned carefully for the future.

I never understood the appeal of penny stocks — surely it comes down to the market cap and growth potential, the cost of each stock unit is one of the least relevant pieces of information in my mind. I have penny stocks. I really do not understand the appeal of penny stocks either. If you want to throw a little bit of money then I have little problem with it. The problem is that many put too much in them or invest a chunk of their retirement portfolios in some.

The big problem I have with them, overall, is that many are simply shell corporations that you can get little info on. A week later, she would call with another hot tip and would put me down if her previous recommendation that I talked her out of did indeed rise.

She never remembered all of the losers I talked her out of, nor how that hot stock only shot up temporarily while all of the other suckers were buying it too.

Could be worse— My FIL is always asking us about crazy stock tips that his investment broker is recommending. Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site including, for example, the order in which they appear.

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My dream is to become a stockbroker as well. Very useful info, thank you so much! Mrs PoP Planting Our Pennies. John S Frugal Rules. Matt Your Living Body. Congratulations, and good luck to you. I did check out your blog today. I at least hope that he listened to that advice but I doubt it… loading Yikes, what a frightening financial story.

Hey John — Completely understand your experience as I used to work in the financial world. Enjoyed your piece today! Hey Warrior, I agree that there are unfortunately too many bad apples out there in terms of advisors. Very well said mom.