The Pursuit of Happiness

“Happiness is not a reward – it’s a consequence.”
– Robert Green Ingersoll

When speaking to youth groups, I like to ask the question, “Wouldn’t it be nice if you had a crystal ball to see your future?” The response is overwhelmingly yes and nodding heads. Then I tell them that we do have crystal balls. People are crystal balls. Every person who has ever lived and is now living is a crystal ball that you can use to see your future.

Do you want to be a good father, mother, husband, or wife? Do you want to be financially successful? Do you want to be happy? Find someone who is close to your ideal in any area of life you would like to achieve and simply model them. Learn their values. Find out what books they read. How do they spend their free time?

Many years ago I did training videos for an exercise equipment company. During a videotaping at their manufacturing facility I was taken into a “top secret” room. This room was filled with tables, each one with a competitors products disassembled and the parts neatly arrayed. This is called reverse engineering, which is part of R&D, research and development.

Just as you can reverse engineer a product to see how it’s made, you can reverse engineer a person’s life. You can research the positive qualities and then develop them within yourself. Success in any area of life is a consequence of proper actions. Failure in any area of life is a consequence of poor, or no actions.

In 1997 I decided that I wanted to learn how to make money in the stock market in order to build my retirement account. I started looking for someone who was making money trading stocks who could teach me. In a conversation with a friend, Ross Jardine, I learned that he was a former broker and was successfully trading his own money using online tools and a discount broker. Ross taught me how to trade. It was such a blessing in my life that I wanted to teach others what Ross taught me. During the past 10 years we have taught thousands of people throughout the world how to make money trading stocks.

There is no question that the tools and training we provide work. The only question is will you take the proper action to make them work? Success and happiness in life are not accidents, they’re consequences.

Your Friend in Investing,

D. Scott Elder

“Fear is not an American art.”
– Thomas Jefferson, 1775

From the journal of Thomas Jefferson:

“On the 15th of May, 1776, the convention of Virginia instructed their delegates in Congress to propose to that body to declare the colonies independent of Great Britain, and appointed a committee to prepare a declaration of rights and plan of government.”

“The committee for drawing the declaration of independence desired me to do it. It was accordingly done, and being approved by them, I reported to the house on Friday the 28th of June when it was read and ordered to lie on the table.”

“On Monday, the 1st of July the house resolved itself into a committee of the whole and resumed the consideration of the original motion by the delegates of Virginia.”

“Congress proceeded the same day to consider the declaration of independence which had been reported and lain upon the table on Friday, and on Monday referred to a committee of the whole.”

“The debates having taken up the greater parts of the 2nd, 3rd, and 4th days of July were, in the evening of the last, closed the declaration was reported by the committee, agreed to by the house and signed by every member present except Mr. Dickinson.”

From the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The reason I’ve titled my blog “The Pursuit of Happiness” is because we all share in common the desire to be happy. This desire for happiness is so powerful that we’re willing to give our lives in order to achieve it. It is my desire to help you in your pursuit happiness.

The Declaration of Independence goes on to state:

The history of the present King of Great Britain is a history of repeated injuries and usurptions, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

The document goes on to list the offenses by the King of Great Britain against the 13 colonies as justification for seeking independence. Similarly, each one of us has tyrannies in our lives. But instead of being inflicted upon us by a king, the tyrant that oppress us is psychological. This psychological tyrant is our limiting beliefs. These “emotional tyrannies” impede our personal pursuit of happiness.

It is time for you to declare your personal “Declaration of Independence” from this psychological tyrant… from your limiting beliefs. You can personalize our country’s Declaration of Independence to state:

The history of my limiting beliefs is a history of repeated injuries and usurptions, all having in direct object the establishment of an absolute Tyranny over me. To prove this, let the Facts be submitted to a candid world.

Now list everything that your limiting beliefs have kept you from achieving throughout your life. Here’s an example:

My limiting beliefs have..

…kept me from excelling in school
…kept me from excelling in sports
…kept me from excelling in business
…kept me from achieving financial independence
…kept me from enjoying fulfilling relationships with family
…kept me from enjoying strong relationships with friends
…kept me from completing things that I start
…kept me from trying new things
…kept me from… (you fill in the blanks)

And now, declare your independence from your limiting beliefs so that you can pursue the happiness that is your unalienable right.

Your Friend,

D. Scott Elder

“Good luck at Cyber-Investing. Let’s bring it to the masses!”
–David Brown, author of Cyber-Investing,
written in Scott Elder’s autographed copy of Cyber-Investing

In my last post, I left off with:

“We didn’t want to do things the same way we had with our previous company. Starting fresh we had the advantage of being able to ask ourselves, if we were to start this company again today, what would we do different?”

Teaching people how to invest in the stock market through seminars and workshops is a very expensive and risky business. Here’s a “behind the scenes” look at how this business model works:

1. Pick a city to go to and launch a marketing campaign using direct mail and radio and newspaper advertising to invite people to attend a free seminar. A free gift is usually offered for attending.

2. Book a hotel meeting room and the sleeping rooms and airline flights for the instructor and the support team to put on the free seminar.

3. Hold two free seminars a day for three days, typically Tuesday, Wednesday and Thursday.

4. The seminar is a 90 minute overview of the investing tools. The objective is to present the features and benefits of the tools and then invite the seminar attendees to register for a more comprehensive two-day workshop.

5. Over the course of the three days of free seminars you hope to see at least 600 people and get 60 to 90 of them to pay $3,000 tuition to attend a workshop.

6. Book a hotel meeting room and sleeping rooms and airline flights for the workshop instructors and support team to teach the workshop.

7. Hold the two-day workshop, which is typically on a Friday and Saturday.

When you do the math on the gross income, on the surface it looks like a good money-making model. But it’s not. The marketing costs, hotel costs, airfare costs and personnel costs to do the free seminars and fulfill the workshop is extremely expensive.

The risks in the seminar business are huge. Sometimes only a few hundred people show up to the free seminars with only 20 to 30 registering to attend the workshop. Severe weather the week of the free seminars will keep people from attending. When the terrorist attacks on 9/11 shut down all flights, getting the instructors and support teams to the seminars and workshops became a logistical nightmare. They had to drive rental cars across country non-stop to put on the events; which very few people turned out for.

In this business, uncontrollable and unforeseeable circumstances can bankrupt you. From the time we started the company until the time we left, there had been a significant increase in advertising costs, hotel rates and airfare costs. Also during this time several other stock investing education companies started up. Too many companies offering similar programs caused the attendance to the seminars and workshops to decrease significantly.

With the costs increasing and attendance decreasing, Ross and I did not want to start another company that used seminars and workshops to teach people how to invest in the stock market. But we still wanted to continue teaching this valuable, and life-changing, skill to people.

David Brown had always had a concern that because of the tuition cost to attend a workshop, many people who wanted this training were not getting it. This tuition barrier kept thousands of people who were attending our free seminars from learning how to invest using our tools and our training. David wanted us to “take it to the masses,” which is why he wrote that in the Cyber-Investing book that he autographed and gave me.

The reality is that you can’t take it to the masses in the seminar and workshop model because of the huge costs involved. It’s simple economics… a business has to bring in more money than it puts out or the business will cease to exist. It doesn’t matter how much you want to provide this opportunity to as many people as you can because you know it will help them; to continue in business you need to make a profit on your services. As Stephen Covey put it: “No Margin, no mission.”

With Stock Investor Ross and I decided to do a test based on the feedback we were getting from the attendees of our free seminars who didn’t register to attend our workshops. 85 to 90 percent of the people who attended the seminars didn’t attend the workshops. But almost all of them were interested in using our investing tools. We know this because when people left the seminars they would tell us so. Over and over again we kept hearing the same thing, that basically included these statements:

1. I don’t want to attend your workshop but I want to use your investing tool.

2. Just let me pay the subscription fee and I’ll figure how to use it on my own.

We would tell people that we can’t do that because we felt strongly that they wouldn’t be able to figure it out on their own and that our customer service people would end up giving them a workshop over the phone. A subscription fee for the use of the investing tool does not cover the expenses of providing training over the phone. This model would also bankrupt a company in no time.

Based on what we were hearing we decided to provide three levels of participation with Stock Investor:

Level 1: The Stock Investor Tool Kit. A free 30-day trial to the investing software and training and support materials available for free at the Stock Investor website.

Level 2: The Stock Investor Success Kit. A complete 6 hour workshop from Ross on DVD with a comprehensive workbook and additional support materials at the Stock Investor website.

Level 3: One-on-one Personal Coaching sessions that are designed to shorten the learning curve, reduce mistakes made through trial and error, and get the student on the fast-track to successful trading.

Here’s what we’ve learned. Although we’ve “taken it to the masses” with the free trial opportunity, the fact is that what we were telling people before has proven true: a majority of the people will not take the time to go through the support materials and training available on our website and figure it out on their own. In addition to getting the program for a free trial, most free trial users also want free training over the phone. This simply is not economically feasible.

If a free trial user determines that they’re not willing to use the free self-directed training available at the Stock Investor website then they’re really not a candidate for that level of participation.

The Success Kit is a comprehensive training program. It features detailed step-by-step instruction, easy-to-follow visuals, and a companion workbook that follows the DVD training. It is literally a workshop on DVD. It’s comparable instruction to what people used to pay $3,000 for to attend one of Ross’ workshops.

I know that if a person were to simply “eat the elephant one bite at a time” and start with DVD 1 and work their way through the training, they will have a good understanding of the 3-Step Investing process and be proficient at using the Stock Investor software to make money trading stocks.

The Success Kit is a self-directed training program. It’s an opportunity to get everything you need to learn how to make money trading stocks at a fraction of the cost of attending a live workshop.

But some people are not wired to be self-directed learners. It takes time and discipline. It is much easier to have an experienced instructor teach you. We know that; which is why we strongly recommend Tool Kit trial users and Success Kit buyers to consider our Personal Coaching program. This is where you get one-on-one training over the phone with an experienced trader who is a certified coach on the Stock Investor software and 3-Step Investing Process.

The personal coaching sessions are structured training sessions. They are adjusted to fit your level of experience. With a personal coach you have the advantage of getting feedback and how you’re doing. You are given assignments that your coach evaluates in order to determine whether or not you’re understanding what you’re being taught.

Even though the personal coaching option costs more than the free Tool Kit option and the Success Kit option, it’s actually a better value. The reason is that you can get a quicker return on your investment working with a personal coaching. This is because coaching students are more inclined to actually trade and they have more wins and fewer losses because of the personalized training.

Here’s what a recent coaching student sent us:

“I wish to extend a whole-hearted thanks to the Stock Investor company, especially the personal coaching program for providing me with an understanding and education in the complicated and intimidating world of stock options. Your simple and straightforward step by step approach to education, and powerful software has enabled me to trade with confidence that I can achieve remarkable profits with limited risk [in the first two months of trading options I have realized a gain of almost 20%]. I intend to pursue trading as a second career and bring me to a level of financial security and independence I never thought possible.”
–Peter F.

The reason Ross and I started Stock Investor was to provide the opportunity for as many people as possible to enjoy the financial rewards and benefits that come from being a successful stock and options trader. Just as it changed my life more than 10 years ago, it has changed the lives of thousands of others throughout the world since then. And it can change your life as well.

We truly want to take this opportunity to the masses, and we’ve done so by offering three different levels of involvement: the free Tool Kit; the Success Kit for under $400; and Personal Coaching. Each level has its own corresponding level of training and support. Compared to other similar programs, we are confident that we provide extremely high value for the investment at each of the three levels.

Although it’s common for people to start out with the lower priced levels, we know that you get the most benefit from working with a personal coach. Our intent is not to force people into any of the three options, but merely to make them all available. And we’re not hiding the fact that we know that most people are not accustomed to putting themselves through a self-directed learning program… even if everything they need to succeed is at their fingertips.

Your Friend in Investing,

D. Scott Elder

“Do we rescue Telescan or build a new investing
website with another financial data provider?”
— D. Scott Elder to Ross Jardine in 2000

Online Investors Advantage went from doing one workshop a month, to two a month, to one a week, and eventually to as many as six workshops a week throughout the world. The U.S. stock market is the global stock market and the World Wide Web really is world wide. We were filling workshops in the United States, Canada, Australia, New Zealand, England, Scotland, Singapore, South Africa and even Dubai.

By the way, I enjoyed going to Dubai. The country is clean and beautiful and the people are very friendly. I haven’t been back since 9/11 but if I had a reason and the opportunity I would not hesitate. I fell in love with Australia. If I’d gone there when I was single or when I had a young family I would have been tempted to move there. The people are very friendly (they love Americans) and the weather is perfect. In the same day you can scuba dive in the beautiful ocean reefs and then go for an ATV ride in the rain forest mountains teaming with Kangaroos. I’ve taken my family there to enjoy Christmas in the summer on the beach. The New Year’s Eve fireworks at Sydney Harbor are spectacular.

But I digress. Our rapid growth was noticed by a small publicly held Internet holding company. This was right before the infamous “.com crash.” when Internet holding companies had experienced huge growth and tremendous run up of their stock. This looked like an opportunity to be part of something big so we became a wholly owned subsidiary of this company. Shortly after the acquisition of OIA, Internet stocks fell out of favor and the value of our parent company collapsed. The other subsidiaries were struggling to pay their leases, make payments on their lines of credit and meet payroll.

OIA was still doing well so it ended up supporting the parent company and most of the other subsidiaries as well. Ross and I went to work to divest of the subsidiaries that were draining OIA’s resources and we eventually got the company to where OIA was the only subsidiary left in the holding company. But even with no debt and no long-term liabilities the market cap (value) of the parent company was less than the cash that OIA had in the bank. That’s how crazy things got. I also ended up becoming CEO and Chairman of the parent company. This is not a fun position for someone who likes to be the “behind the scenes” creative guy and needs to be a little less structured than a typical CEO of a public company.

Just as we were cleaning up things inside the parent company, the .com crash created another challenge for us. The company that owned Wall Street City, Telescan, Inc., was also suffering the effects of the .com crash. By this time we had grown to the point where we were able to have Telescan build us a customized version of Wall Street City called Investors Toolbox. We stripped out all of the banner ads, formatted the web site so that the 5-Step Investing Formula flowed in a natural progression and automated many of the functions in each of the five steps.

Telescan had been built on a banner ad revenue-generating model (as most Internet companies were at the time). With this model, in order to attract “eyeballs” to attract advertisers, they had a free version of Wall Street City and a minimal subscription fee for the premium services. When the banner ad revenues started evaporating, Telescan started losing money at an accelerating rate. At the same time, Wall Street City’s subscriptions were also declining. The irony was that a subscription to Investor Toolbox was more than a subscription to Wall Street City and the Investor Toolbox subscriptions were increasing.

This dynamic proved to be a valuable insight. We learned that the things we did to customize our version of Wall Street City and educating subscribers on how to use the tools made it much easier to use; and consequently easier for them to get a return on their investment in the subscription fees. In other words people were willing to pay more to use our version because it was easier to make money trading stocks with it.

Telescan was on the verge of bankruptcy and we had to make a decision: either merge with Telescan and assume its liabilities or find another provider of financial data and rebuild Investor Toolbox from the ground up. Rebuilding the website would have been the least expensive alternative but the disruption to our business and our subscribers could have been disastrous for the company. The decision was made to merge with Telescan and assume its liabilities.

I was anxious to get back to focusing on the creative aspects of the company and was glad to let the CEO of Telescan become the CEO of the newly merged companies. He had a Wall Street banking background and much more experience running public companies than I did. Shortly after the merger the company changed its name.

Soon after the merger the vision that Ross and I had for the company and the vision the new CEO had began to diverge. Within a few months Ross and I left the company and pursued other interests. But the fact that we didn’t achieve some of the objectives we had when we started OIA kept rolling around in the back of our minds. So about two years after we left we decided to start another company to teach people how to use proprietary stock trading tools to invest in the stock market.

We didn’t want to do things the same way we had with our previous company. Starting fresh we had the advantage of being able to ask ourselves, “If we were to start this company again today, what would we do different?”

Continued on next post…

Your Friend in Investing,

D. Scott Elder

“Of all the training programs I had ever developed to help people succeed in business and in life, this was more needed than anything I had ever done.”
– D. Scott Elder to Ross Jardine in 1997

It’s been more than 10 years since Ross Jardine taught me how to invest in the stock market using investing tools available on the Internet. We’ve come a long way in the past 10 years, so I thought you should know how and why Stock Investor came to be. It’s been a three-stage evolution to arrive at where we are today, so I’m going to talk about each part over three posts.

The first stage is about a personal experience that I had. It’s how I went from terrified about the thought of retiring with barely enough money to scrape by to completely confident and at peace that my wife and I will be able to one day enjoy financial freedom and an early retirement.

It started when I came face-to-face with reality when I read this statement from Senior Economic Advisor, Robert Goodman:

“To live a financially secure life in this changing economic environment, you will need a much larger nest egg than in any prior generation… you can earn $1 million… and you’ll need it.”

A million dollars! I thought, “How in the world was I going to have a million dollars by the time I retired?” The rate I was going, I was a long way from being close to accumulating that much money by the time I retired.

Then I read an article in U.S. News and World Report : “Millionaires in Every House.” This article was about Senator Bob Kerrey who was promoting the idea that Americans could do much better investing their own money in the stock market for their retirement than hoping Social Security will take care of them.  Senator Kerrey used the example of Gladys Holm, a secretary who never made more than $15,000 a year but was able to leave an 18 million dollar gift to the Children’s Hospital of Chicago when she died in 1996 at the age of 86.  Her secret, it turns out, was to save a little money each month and invest it in the stock market.

Over time, the magic of compounding returns – and good stock picks – made Gladys a very wealthy woman. This caught my attention. My first thought was: “Making money in the stock market is the way that I can build wealth and enjoy a financially secure retirement.” I figured that if Gladys Holm could do it, then so could I.  My second thought was; “But how? I don’t know anything about investing in the stock market.” And then I remembered something I’ve told myself a hundred times, if not more…

“For everything there is a first time. And everyone who is good at something was poor at it when they first started. If you want to do well at something, find someone who is already doing well at it; learn from them; and then follow through on what you learn.”

After extensive research, I discovered the “secret recipe” to making money in the stock market. This recipe consists of two ingredients: Information and Knowledge. You need timely information about each stock and the market in general. You need the knowledge of what to do with this information. You need to know what criteria determines whether or not you  should buy a particular stock; if so when should you buy it; and if you buy it, when should you sell it.

The challenge at that time was that the information and knowledge needed to make money in the stock market wasn’t easily available to the average person. Professional traders and Wall Street had a lock on this information.

An article in Forbes magazine stated:

“Investors who wanted to screen for stocks had little choice but to buy the rights to the Compustat database.  Only big time investors could afford the cost of $50,000 a year.”

At $50,000 a year only the super wealthy could afford to pay for the information that helped you to make money trading stocks. And for these select few, even at $50,000 a year, it was worth every penny to them because they knew they could make enough profit from this information to easily justify the cost.

I had the good fortune of seeing this system in place in the home of a wealthy doctor who subscribed to this service. He had a satellite dish on the roof of his home that downloaded stock market data to his computer. He told me he was making more money trading stocks with this information than from his very successful medical practice.

But what about the rest of us who weren’t wealthy doctors… people like you and me?  For a long time there wasn’t much we could do about it.  But the personal computer and the Internet changed that.

A light when on in my head when I read an article in BusinessWeek that stated: 

“A year ago, you couldn’t perform database searches for stocks on the Web.  Today, for individual investors armed with a personal computer there is now an inexpensive way to sift through a universe of stocks and to isolate the few that meet particular criteria.”

It was this insight that changed my life forever and resulted in starting Online Investors Advantage. In 1996, I became frustrated that the mutual funds in my retirement account were not doing well compared to how the over-all stock market was doing. When I talked to the person assigned to my account he assured me I was doing just fine and right on track.

As I watched the stock market continue to rally and break records while my mutual funds lagged way behind, I decided to take matters into my own hands.  I came to the realization that no one cared more about my money than me.

I made the decision that I could no longer leave my financial destiny in the hands people didn’t care about my money as much as I did. After months of reading books and magazines on investing, extensive research on the Internet, and picking the brains of successful investors, what I discovered both angered me and excited me.  I was angered that I had gone this long trusting others with my financial security.

I was excited that I now knew better – and I knew what to do. Ross Jardine was one of the successful investors whose brains I had been picking. I had worked with Ross on an Internet-related training program and knew that he was an expert on the Internet. When I learned that he had been a broker and was trading his own stocks, I asked him if he was familiar with trading tools on the Internet. He was.

I asked Ross to teach me how to do what he was doing. At the time I had just experienced a serious financial setback and didn’t have enough money to open an account with an online stock broker. (My biggest client had filed bankruptcy.) So I opened a self-directed retirement account by transferring my “professionally managed” IRA to an online brokerage firm. And why not, in 10 years of “professional management” my account had barely grown beyond what I had put into it.

In a short time, armed with information and knowledge, I experienced a dramatic improvement in my retirement account. I had made more money in three weeks than the professional managers had made in 10 years.

Knowing what I then discovered from personal experience, it made absolutely no sense at all that anyone would settle for retiring with barely enough to pay the bills when they could instead retire wealthy. The difference between the two is simply choosing to take control of your financial destiny rather than leaving it in the hands of someone else.

Time would prove that my experience wasn’t unique. Here’s what an article in the December 27, 1998, issue of USA Weekend, titled, The Best Moves You and Your Money Can Make In 1999 stated:

“Do your own investing.  Studies show individual investors do about as well as pros, there’s no doubt you can save big on commissions.  Thanks to the Internet, individual investors have access to volumes of information, much of it as good as (or better than) the stuff brokers disseminate.”

This is exactly what I had discovered on my own. I was so excited about what I had discovered, and the difference it was making in my life, that I wanted to share it with anyone who would listen.  So I approached Ross and told him that we needed to start a company to teach other people – ordinary people like us – everything that I had learned so that others could have the same experience I was having. 

At the time I had a business that developed training programs for small business owners. I told Ross that of all the training programs I had ever developed to help people succeed in business and in life, this was more needed than anything I had ever done.  Ross agreed that we could provide a tremendous benefit to many people if we were able to teach others how to take control of their own investing – just as I had done.

Ross and I started Online Investors Advantage and went to work developing a program to teach people how to use Internet-based tools to invest in the stock market. The online investing tool we were using was called Wall Street City. The founder of this service was David Brown, author of Cyber Investing. We worked out a deal with David to bundle his Wall Street City investing tool with our training. Ross and I developed a two-day workshop and a 12 hour video home-study program that incorporated David’s 5-Step Investing Formula from his book.

We held our first workshop in March of 1998. We intended to do this part time, as both Ross and I had other full-time businesses to run. However, within a few months we realized that there was a huge demand for our training. At the time we were the only company offering training on how to invest in the stock market using an online investing tool. We had a tiger by the tail and we had a decision to make.

Continued on next post…

Your Friend in Investing,

D. Scott Elder