Course: Self-Directed, Self-Help with Journaling 101
Title:
- Professional Day Trader Teaches Prisoners
- YouTube Video: https://youtu.be/Em2tQ0eE8S0?si=eO2drT4pr6Uquyr9
Blurb:
- Scott grew up in northern New Jersey. His early struggles with dyslexia in school taught him universal strategies for overcoming challenges. After attending college, Scott worked making $18,000 a year in an entry-level sales job. As a market maker in the stock market, Scott earned more than $900,000 annually. In this segment of Prison Professors, Scott uses his experience as a successful investor to teach stock market investing and day trading basics.
Objective:
- In Scott’s story, participants in prison will learn how anyone can achieve financial success after their release. People can earn a living by investing in the stock market and not worry about obtaining a job where someone may judge them for having a criminal background.
Lesson Requirements:
- Watch the video that accompanies the lesson
- Write a definition of each word highlighted in bold and written in italics
- Use ten of the vocabulary words in a sentence
- Respond to a minimum of three open-ended questions by following instructions at the end of the lesson.
Lesson Outcome:
- Participants will develop vocabulary by at least ten words.
- Participants will improve writing skills and their ability to contemplate how their responses to open-ended questions relate to their prospects for success upon release.
- Participants will add to their journal, demonstrating a self-directed, self-improvement pathway to prepare for success upon release.
Our entire team at Prison Professors expresses gratitude to Scott for sharing his experiences with us. Scott demonstrated how hard work and determination could create career opportunities for people in industries with no prior experience.
Scott’s Background:
Scott was reared in an affluent northern New Jersey suburb near New York City. Scott’s father and mother both worked throughout his early childhood and academic years. His parents provided a privileged lifestyle in which Scott attended good schools, with good mentors around him. Scott found school challenging. He struggled with reading. Educators at Scott’s school determined he had dyslexia, a learning disability where people encounter difficulty learning to read or interpret words, letters, and other symbols. With academic and family support, Scott learned strategies that helped him work through his learning challenges and overcome his struggle with dyslexia. Scott’s father helped him with reading comprehension and interpretation by reading the sports page in the local newspaper. Scott also learned he had an aptitude toward math by reading the betting lines in the newspaper. The numbers on betting line made sense.
Sports played a significant role in Scott’s life. He believes reading the paper each day with his father inspired his love of sports. Sports kept Scott focused and motivated. Organized sports like football helped Scott set goals for himself. Scott excelled at football and played many years in organized youth football leagues and high school.
After graduating high school, Scott reached his goal of playing college football. His years of hard work paid off when he became the starting center for the University of Central Florida’s football team. Scott credits his ability to work hard and overcome his learning disability and his determination to become great at football, helping him reach his goal.
During his time in college, Scott took the opportunity to learn everything about football to excel while on the field. Scott’s work ethic helped him achieve success on and off the field.
In addition to his studies and playing football in college, Scott worked part-time in sales. Scott’s work ethic provided him with some extra money and allowed him to learn how the business world operates. He credits this part-time sales job with teaching him how to speak clearly in a business setting.
When his football career ended after 2 ½ years, Scott left college without a degree. He moved back home to northern New Jersey and continued his education at a local community college. Back home in New Jersey, Scott felt unclear about his future and uncertain about his long-game career plan. In 1999, a family friend recognized how hard Scott worked at football, in his collegiate studies, and at his part-time job and realized Scott’s work ethic would be an asset for his company. He offered Scott a job opportunity.
Takeaway:
People in jails and prisons may not come from privileged backgrounds; yet skills such as teamwork and a strong work ethic can, and should be developed regardless of backgrounds or environments. Investing in ourselves inspires others to invest in us. Individuals going through any struggle can use Scott’s story as motivation to achieve success. Scott struggled with a severe learning disability but still went to college. Scott used his mathematics skills to help him along his path. Success stories like Scott’s can serve as a powerful source of inspiration for people looking for positive influences to get through tough times.
- How did Scott realize his strengths by overcoming his struggles?
- How can you use your current situation to help you realize your strengths?
- Scott set intermediate goals for himself to become successful. How can you set goals for yourself?
- In what ways do you see Scott’s overcoming his disability as factoring in his success?
Scott’s Post-College Life and Earning Potential:
When Scott received an offer to work as a runner in a stock market brokerage firm he knew nothing about Wall Street or the stock market. With two locations—one office in New York and another in Florida. When accepted the job offer, the firm assigned Scott to work in its Florida office.
As a runner, Scott literally ran errands for the stockbrokers in the company. Scott believed no job was too small or beneath him. Scott’s responsibilities as a runner included getting coffee for the brokers, going to the post office, and picking up dry cleaning for his co-workers.
Scott’s new position with the stock market firm paid $18,000 annually, less than he made in sales. He realized the opportunity for much greater earning potential existed in the stock market industry. While working as a runner, Scott set out to learn everything possible about the stock market and become successful as a broker.
Scott worked at the brokerage firm for two years before he could trade stocks. The Securities and Exchange Commission requires people who sell publicly traded stocks to obtain a “Series Seven” stockbroker license. According to Scott, the Series Seven classes and tests require hard work and determination because of the level of difficulty. After two years in the stock market industry, Scott earned approximately $50,000 a year, close to triple his original salary. After five years in the industry, Scott earned more than $100,000 annually.
Scott currently owns a market maker business. Market makers are professional traders of stocks and financial instruments. They essentially act as wholesalers by buying and selling publicly traded stocks to ensure there enough liquidity exists in the stock market. Scott’s business model focuses solely on the wholesale side of the Over-The-Counter (OTC) stock market. The OTC market consists mainly of small companies and are otherwise known in the industry as penny stocks or pink sheets. Market makers facilitate a stable inside market for investors who want to sell equity or company stock positions.
Scott formed good habits while in college and while employed as a runner. Scott’s typical day starts at 4:30 am when he prepares for the stock market to open. Scott’s preparations include reviewing news headlines, reviewing trading activity for popular stocks from the previous day, and reviewing social media to see what news is trending.
By waking at 4:30 am, Scott believes he obtains an edge on the market to outwork the competition. First thing every morning, he examines the list of stocks and uses a stock scanner to review yesterday’s trades. He checks a news service like CNBC to get the overall emotional feel of the market trends. Next, he examines news headlines to learn which stocks will be the most active on the day. Then, he narrows down and looks at volume and interest peaking, which gives an indication of where money will flow. According to Scott, the most important information he gathers is where the money and volume are flowing. That knowledge isolates the best stocks to trade for the best outcome (most money). The goal, he says, is getting the edge and putting the odds in his favor to increase the likelihood of entering the right trade at the right time.
At this point in his career, Scott has worked in the stock market industry for more than 21 years. In his highest-earning year, he earned over $900,000. In off years, Scott earns between $300,000 – $400,000.
Takeaway:
While you may not be able to trade stocks while in prison, you can use your time to learn how wall street works and how investors value companies. That information is used in many ways. Understanding how markets move contributes to informed decision-making for anyone building a business. It’s the kind of information that can be studied by watching CNBC, reading financial newspapers, or learning from professionals like Scott who does it for a living.
While Scott obtained a Series Seven license, no licenses are required to buy and sell stocks for yourself. Some people worry about their employment opportunities after being released. Self-directed and self-motivated folks can get a start on their post-incarceration career by setting goals and working hard.
They can learn from leaders like Scott through our course, or they may find people around them that have lessons to share.
- What are you doing now to prepare for your future?
- What opportunities to learn new industries exist around you?
- Identify other people in your situation who can help you develop your skillset.
- What can you read to learn skills that will help you after you’re released?
- In what ways are you prepared to effect change toward a better life?
Understanding Day Trading Basics:
According to Scott, a career in the stock market can be rewarding and enriching. To become a day trader, people theoretically can start with as little as $500 – $1,000. While there are no guarantees to success, the more money in the brokerage account, the easier it will be to make money. People should start by opening a brokerage account. Many large banks offer brokerage accounts where investors can trade any publicly traded stock. The brokerage houses charge customers fees for each transaction.
For someone without access to the internet, Scott believes reading is the best way to get started. Many books and periodicals provide the basics of the industry. People interested in learning about the stock market should consider reading about the following topics:
- Technical analysis;
- Valuation of companies;
- Understanding stock charts;
- Analysis of corporate fundamentals; and
- Psychology of the market.
Individuals interested in day trading should also be aware of the Securities and Exchange Commission’s Day Trading Pattern rule. This rule prohibits traders from trading (buying and selling) more than three stocks in one day. However, traders with more than $35,000 or more in their brokerage account are no longer bound by the Day Trading Pattern rule.
Through his years of experience, Scott believes $50,000 in a brokerage account provides enough allowance to carry investors through the peaks and valleys in the market. The $50,000 threshold also allows day traders to stay above the Day Trading Pattern rule threshold and to be able to pull money out of the account to pay ordinary living expenses if needed.
When new investors open their brokerage account, they should know the brokerage houses allow customers to trade in large-cap, small-cap, and even OTC stocks. Market capitalization means the total value of the company.
Scott offers the following basic definitions for individuals interested in careers in the stock market:
Equities / Stocks – A corporation sells a portion of its ownership to an investor in the general public in exchange for money. The investor can purchase one share of stock or a substantial amount of stock in the company. The purchaser now owns a part of the company. Generally, the value of the stock rises and falls with the success of the business.
Bonds – A corporation or a government entity sells debt to a public investor and pays interest on the debt. Financial experts believe purchasing has less risk than stocks since the bonds typically are paid back. Bonds have a lower return on investment because they have less risk.
Large Cap – $10 billion or more in market cap (Apple, Tesla).
Small-Cap – $1 billion in market cap and stock prices range from $10 per share to $20 per share.
Over the Counter – Companies whose stock trades over the counter are known as penny stocks or pink sheet stocks. These companies have less than $1 billion in market cap. These stocks experience high volatility and frequently low liquidity. OTC stocks trade anywhere from less than one cent up to $5.00 per share.
Once an investor creates a brokerage account, they can buy and sell stocks, bonds, and Electronic Transfer Funds (ETF). There are hundreds of different ETFs where people can invest. Each ETF focuses on one industry or sector of the economy. For instance, an investor who lacks specialized knowledge in biotech companies can invest in an ETF that focuses solely on biotech companies. Instead of guessing which one company to purchase stock from, the investor buys the biotech ETF and now owns small portions of many biotech companies. This method of investing also helps spread the risk associated with stock market investments. A negative to purchasing the EFTs are the hefty fees charged to investors.
When purchasing stocks, Scott recommends beginners start with Limit Orders. Limit orders allow the investor to set a high and a low purchase price for the individual stock they’re attempting to buy. This protects the new investor from the volatility in the market.
Market Orders provide investors the option to pay any price for a specific stock. Scott does not recommend new investors use Market Orders method due to the lack of protection from volatility.
Stop Market Orders and Stop Limit Orders are more complex ways to purchase stocks. These options provide investors ways to buy and sell stocks set within certain pre-set price limitations.
When Scott buys shares of a company’s stock in the OTC market, he does not spend much time researching the company’s business. Scott focuses instead on the technical trading details. This trading strategy provides Scott a way to manage his daily trading activity while not becoming mired in the details of how the company operates its business.
Scott firmly believes the people that work hard and do their due diligence can dramatically increase their earning potential in the OTC markets. Scott indicates about a dozen OTC companies that see a significant breakout in their stock every day. Scott’s key to success is knowing which companies are ready to break out and when.
Scott also strongly believes individuals interested in a career in the stock market take the time to learn how investing works. New investors should start slowly with small purchases of stock with little downside risk. Scott also recommends new investors find an industry or sector where they are comfortable to build their confidence and create success.
Through hard work and determination, Scott reached his goal of financial success. We all can learn from the lessons he offered in the interview segment that accompanies his lesson plan. Exercise patience and humility. Develop strong critical thinking and communication skills so you can reach your goals.
Scott organically embraced discipline and a self-directed mindset. Throughout his education and career, his choices reflect an attitude of doing whatever is necessary to get the edge, put the odds in his favor to outwork the competition. Those personal attributes put him in the best position to succeed.
Final Takeaway:
Anyone who achieves a high level of success did, a some point in their life, develop a passion for hard work. If you’re in jail or prison, start developing that skillset and mindset now. I learned to embrace discipline and self-directedness in prison. Leaders like Scott reinforced the mindset I adhered to. It drove me to get up early and outwork my competition because I wanted to create new opportunities.
Critical Thinking Questions:
- Write at least three paragraphs, with a minimum of three sentences each, for each of the following questions.
- How did Scott’s early struggles with a learning disability aid in the development of his success?
- What struggles have you faced in your life, and how do they compare to Scott’s?
- Scott believes hard work and determination lead to financial success. Explain why you agree or disagree?
- What strategies did Scott use to overcome his learning disability and set himself up for financial success?
- In what ways can you prevent your time in prison from being an obstacle in your future?
- In all phases of Scott’s life, he took time to research his activities to educate himself. How can you emulate Scott’s philosophy on hard work?
- What elements of Scott’s past helped him succeed in running his own business?
- Scott recommends several reading topics for individuals interested in careers in the stock market. What are they?
- Explain the stock market concepts of Equities/Stocks and Bonds. How do they differ?
- How can strong communication skills aid in your post-incarceration development?
