I believe we remember things when they are told through stories. So, here's one of mine that I hope you will remember. It was Spring 2008, and I was lying poolside at a family resort in Walt Disney World watching my 3, 4, and 6-year-olds playing in the pool without a care in the world. I had just turned 33 years old and my practice was growing by double digit percentages. Now let’s quickly rewind back about a year prior to this day. In mid 2007 I had begun to read about investing in the stock market. I became captivated by how exciting it seemed, in particular the options market, and probably read about three or four books on trading options. After that year, I felt that I had a pretty good understanding of how to buy and sell options. So, I got myself a financial advisor and started trading. I made the calls on which options I wanted to buy and sell.
Now let’s fast forward a year to the pool again. A vibrating iPhone interrupted my cat nap in the warm Florida sun. It was my financial advisor. "Congratulations", he said, in a calm and cool Ivy League voice. "You’ve just made $21,000 today on your Apple puts." And just like that, I was hooked. I couldn't believe how easy it was to make money so fast. "Maybe I should change careers?", I thought. Eight years of optometry school never taught me to make $21,000 in a day! By July 2008 I had made over $150,000 in less than 4 months by trading options.
As Fall 2008 approached, the market was shaky to say the least. The money wasn't flowing in like a few months ago but I wasn't worried. Hell, I made some big money. In late September, I got a call from my financial company. Strangely, it wasn't my financial advisor. It was a gentleman that wanted to let me know if I understood the amount of money I was investing on "the margin". Margin is when you borrow money from a broker to purchase stock. It's like a loan from your brokerage. It allows you to buy more stock then you'd be able to normally. I didn't fully understand why he called out of the blue, but I graciously said, "Yes, I understand what I'm doing and thank you for the call." It's funny to me as I write this today because I really didn't understand what "the margin" meant, as far as the implications, if the market took a turn for the worse. Fall turned to Winter and the market was plummeting. In mid-December my financial advisor called me and told me that I must start paying back what I had borrowed on the margin. The same amazing trades I was making 6 months ago were now terrible decisions. I was losing $50,000 each day. By the end of the year I had experienced a $300,000 swing from +$150,000 to -$150,000. I couldn’t believe what had happened to me that year.
I lost a net total of $300,000…and I am so grateful that I did. You see, I learned three extremely important life lessons from that horrifying and humbling experience. First, DO WHAT YOU KNOW. Please don’t fool yourself into thinking that you can be a stockbroker, lawyer, manager, or business owner just because you are a smart and talented Optometrist. This mindset will put you on the fast track to mediocrity and/or failure. Secondly, SURROUND YOURSELF WITH PROFESSIONALS WHO WILL HOLD YOU ACCOUNTABLE. As you become more successful, less and less people will be intellectually equipped to keep you accountable for your actions (unless it’s my 90-year-old grandmother. There’s always an exception.) Choose professional mentors who are smarter than you in the areas that you are weak and demand that they hold you accountable. Involve them in every major decision of your life by guiding you in developing disciplined thoughts and by executing disciplined actions. Finally, LISTEN TO NEW BELIEVABLE VOICES. The key is to only listen to new voices who have achieved exactly what YOU WANT to achieve but haven’t yet. In other words, listen to the voices of experience and firsthand knowledge that have achieved YOUR dream. These voices are infinitely more valuable than a multitude of random voices that speak in theory and opinion. Does that make sense? Although theory and opinion in and of themselves can be valuable, rarely do I find they are valuable from sources who haven’t actually been where I want to be. My hope is that everyone can self-reflect on these lessons that I have learned, and I wish all of you a very prosperous and fulfilling New Year!
Dr. John Ormando is the co-owner of Uppercut Consulting, Mandalay Optical, and Westminster Eyecare Associates. He received his Doctor of Optometry degree at the State University of New York College of Optometry in 2001. Dr. Ormando, along with Dr. Scott Colonna, founded Westminster Eyecare Associates which now is possibly the largest single-office practice in the country. He will soon be launching Elite Optometric Academy, Optometry’s first interactive virtual training platform for OD’s, Managers, and Staff. For questions or comments about this article, please contact firstname.lastname@example.org.