“Earning the right is your responsibility yet always a choice.” —Gerry Gallop
In follow-up to our most recent Trading2Trader Group Process, a participant called me regarding a presentation I did on ‘earning the right.’
Her request was for ideas on how to incorporate the concept in the trading plan she was drafting.
Before I share my response, I’ll provide some background information about how this concept evolved and became a central component of my work with individual clients, and a key-performance axiom.
I was a 24 year old, newbie insurance salesman in the Los Angeles area. Gerry Gallop, my general agent, was 35 years old, a multi-million-dollar producer, and someone who represented what I wanted to be—a highly successful insurance salesman.
On occasion we would have lunch together and he would share his philosophy on various topics such as selling, clients, money, and life in general. For me, these were incredible experiences because he talked straight about his views and what he had learned and experienced—not what I should or should not do.
On one occasion he told me about his philosophy regarding what it took to be successful and how one had to be ‘qualified’ to succeed. In other words, success has to be earned—not granted or bestowed.
He gave me an example of what he meant by talking about insurance agents who, on day one of their new job, hit the streets and sold insurance to all their friends and relatives. And then, when sales to all the friends and family were exhausted, they would leave the business and find some other way to make a living. He went on to say that his statement was validated by the fact that, from what he had seen over the previous ten years, roughly nine out of ten who did so, failed.
He went on to say that it was really very simple to become successful selling insurance. If one followed the principle of taking a step forward only if the previous step was mastered—thus, forward progress had to be earned— and was not something granted by a third party.
This principle was underscored when it came to what he believed about the newbie in the insurance business. They had:
No right to call on someone until he or she was knowledgeable about their insurance products and the situations in which they were most applicable.
No right to make a presentation until he or she was totally prepared. This included:
- knowing the prospects situation, goals, beliefs, present position, etc.
- how to provide options that benefited the prospect
- validating proposed solutions with an experienced agent
No right to ask for referrals until they could prove they had done their best for the client by improving their situation or providing a solution to their problem.
No right to cash the commission check if they didn’t make a positive difference for their client.
In other words, true insurance agents are more than sellers of insurance; they have a responsibility to help their clients achieve their goals.
By the way, to further underscore the point of earning the right, he asked me what it took for me to be promoted in rank while serving in the Marine Corp. My answer was that I had to demonstrate proficiency in specific skills. He ended that conversation with “You had to earn the promotion, right?”
As I look back at that lunch conversation over 40 years ago, I believe it was one of the most impactful learning experiences of my life. It changed how I looked at my actions and results going forward.
Yet, when I became a full-time futures trader, for some unknown reason, I pushed that principle aside. I spent four-plus years looking for the ‘holy grail’ I was convinced someone else had. If I paid them, I believed I would then have the key to becoming a successful trader.
Well, with 20/20 hindsight coupled with my life and business experience, I know there is no holy grail without effort. And, furthermore, that effort is bookended by time and money which are both under my control.
So, after four long and costly years, I was on the brink of quitting. My wife and I talked. She asked me a question that helped me to reverse the results of the previous four years. Her question was—why had I not done for myself what I had done for clients in helping them become successful? Candidly, her question during a time when I was taking a break from trading to think, changed everything. My approach and commitment became my ‘earning the right’ plan for becoming a trader.
So, back to the participant’s original question about ‘earning the right’ as it relates to a trading plan. Some elements I put into my own ‘earning the right’ trading plan came from my education and experience working with entrepreneurs over the past 30 years. I declared I did not have the right to trade real money until I had:
- proven, on the simulator, that I could produce consistent, positive results
- tested and acquired trading software that supported my trading system
- achieved proficiency with my trading and order-entry software
- decided on the market, timeframe, and contract that best fit me
- designed and implemented a trading business structure
- a defined procedure for making high-probability trading decisions
- a trading plan that supported my trading performance
- committed to following my trading plan
- procedures for tracking my trading performance and results
- a defined curriculum and schedule for continued education
Obviously, I had put in place a number of other things I don’t readily recall, but I am certain that the concept of ‘earning the right’ was a critical factor in reversing my initial, dismal trading results.
I divided my trading activity into two parts:
Part A. My wife and I set up a formal trading business, a structure complete with guidelines, policies, and procedures. With specific assets, liabilities, income, and expenses, this entity also became the management entity for the trader, me.
Part B. The trader, me, agreed to trade according to the guidelines, policies, and procedures of our trading business, which were set according to the way I traded, my personal risk parameters, and the needs of the business itself.
In the end, the structures we put in place helped me to reverse the results of previous years. It helped me to focus on the job of executing positions that met my explicit qualifications.
Please understand, I’m not telling anyone what to do. What I am suggesting is, think about the ‘earning the right’ concept because it just might be a catalyst to help you go further, faster.
Until next time . . .
P.S. I let a couple of our clients preview this article, and one told me about Tom Coughlin’s book, Earn the Right to Win. It’s available on Amazon and is a read I strongly suggest.