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A friend told me that he found it hard to explain to his parents that investing in the stock market was not gambling.
They were always telling him to stop gambling in the stock market.
To that, I said that his parents were right.
He was shocked.
Why did I say that?
Well, all of us have our own perceptions and, to us, our perception is reality.
Remember the story about the frog and the fish which shared a pond?
When the frog told the fish that there was a different world outside the pond, the fish didn't believe the frog.
So, I told my friend that his folks were probably not able to understand concepts they had never heard of in their lives unless we put across the ideas in a way that they could relate to in everyday life.
I came up with this:
Try telling them that many rich people got rich through having successful businesses.
I think they can understand this.
Just give them some local examples which they are familiar with. Breadtalk and Old Chang Kee, perhaps.
So, if they want to be rich, they could start businesses too and hope to succeed.
However, it is probably very risky and most of us do not have the capital, the know how or even the inclination to start our own businesses.
Of course, they could always be partners in a business venture and hope that the managing partners are capable enough to succeed and honest enough to share the fruits later on.
Now, at this point, tell them that the stock market is filled with businesses which they can become "partners" in.
They just have to pick the right businesses.
Right businesses?
Yes, the ones with capable and honest management who are likely to succeed and share the fruits with them.
Well, my friend talked to his parents again and told me that although his parents are still sceptical about the stock market, they agreed that what he is doing seems less dicey compared to gambling.
Of course, there is more to investing than what has been said but it is a start and my friend is happy enough.
If you find yourself in the same boat as my friend, you might want to give this approach a try.
It could work for you too.
Related post:
Wealth creation in the stock market.
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