“Everything you’ve been told about building
an injury law practice is wrong”

The Best Lesson a Father Can Give His Son

This was a lesson that I would never forget.

During a summer gig working as a grunt at Shearson Lehman Brothers in NYC in 1983, I over-heard stockbrokers talking about copper as an investment and I became intrigued. A fan of investing, I spent time studying everything I could about copper from supply and demand, and mining and distribution from places like Zambia and Chile. After a couple of months of research by a neophyte investor, I gradually became convinced that the price of copper was ready to soar.

Friends and family urged me to avoid the temptation to invest in copper. And at first I listened to their well-intentioned advice, but after a few months of fighting the temptation, I just couldn’t resist.

A Neophyte Investor Makes a Bold Gamble

From my college dorm room in the fall of 1983, I opened an investment account with Shearson Lehman Brothers and deposited my life-savings (3 months of savings from my summer job) of $2k. I had clear and specific instructions for my stock-broker: invest all of my hard-earned cash into a commodities option known as a “call”. A commodities option (known as a “call”) is a kind of bet with long-odds that rarely pays off. If the price of copper makes a big spike in price within 2-3 months, I might make a few $, but otherwise, I would lose all of my $. The odds were stacked against me.

After taking the dive into commodities options, I did what most college students do: I woke up at 5:30 a.m. from Monday through Friday to buy the Wall Street Journal so that I could check the price of copper (the internet didn’t exist). Almost to my amazement, the price of copper continued to rise. Days, weeks and then months passed with the price of copper on a steady upward path and with every new increase in the price, I counted a fat paper profit in my head. Just maybe I wasn’t crazy.

With just a few days left until the option expired, I was forced to sell. When the option was sold, my investment account had $10k. I turned a $2k investment into $10k and made a 400% return on my investment in just 2-3 months. For a college student with just a couple of dollars in his wallet, this was heady stuff…and the worst possible thing that could have happened.

The Worst Thing that Could Have Happened

I was now convinced that I had the Midas-touch and I began investing on margin (loan) in speculative currencies options, including the Japanese Yen and Swiss Franc. Things went south quick. My account value dwindled by the day and I quickly realized I was making a big mistake.

While hanging out in my dorm room on a Friday afternoon, I got a phone call from my stock-broker with scary news. There was a “margin call” on my account and I had to deposit an additional $1k into my account or the account would be liquidated. I stood to lose all of the money in my account of roughly $4k.

A Story with a Surprise Ending

As a college student with no job, I didn’t have $1k, or even $15, and I only had one option: call my Dad and beg for help. When I placed the call, I was relieved when my Dad answered the phone on a late afternoon on a Friday. I explained my quandary and apologized profusely for my stupidity. I promised my Dad that if he would deposit $1k into my account, I would sell the commodities options, return his money, and stop investing in commodities. I explained that this would allow me to keep the $4k and I would never ignore his advice again.

My Dad quickly responded with, “Good luck” and hung up the phone. I was dumbfounded when I heard the click on the other end of the phone. I was flat out of luck—this was my only chance to save my investment. I never heard from the stock-broker again, my account was liquidated and I lost every penny.

A Priceless Lesson from Dad

At the time, this made no sense, but in hindsight, it makes perfect sense. My Dad knew then what I didn’t know: I had to stand on my own two feet and survive without anyone’s help. I could not rely on mommy or daddy to get me out of trouble for even another day–I had to fend for myself.

My dad could have told me these things, but it just wouldn’t have been the same. This lesson made me tougher, stronger and most importantly, self-reliant. In hindsight, losing $4k meant nothing. But the lesson that my Dad taught me was priceless.

Even now, 33+ years later, the final words in my father’s handwritten letter, dated March 25, 1984, resonate more than ever:

“You have the chance to do and be whatever you will and as long as your mother and me are alive we will always be there to help. But, you can never count on us being there—not even for tomorrow. You must be prepared to stand on your own feet and to make your own success in life without anyone’s help. You must start now.

Love, Dad

Thanks, Dad, for the best lesson a father can give his son. I love and miss you, John

 
photo credit: sandklef San Gimigniano, Italy. Father and son via photopin (license)

Leave a comment below telling me what surprised, inspired or taught you the most (I personally respond to every comment). And if you disagree with my take on running a personal injury law firm, or have a specific, actionable tip, I’d love to hear from you.
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