The hustle and bustle of Customs Street in Lagos is a sight to behold.
The Stock Exchange building towers over the busy street, its ticker screen a constant reminder of the constant movement and activity happening below.
The bullion van drivers, escorts, dispatch riders, hawkers, and job seekers all scurry about their “busy-nesses,” each one a small piece in the larger economic puzzle.
But as I stand and watch, I can’t help but wonder: Do they realize the impact of their actions on the symbols scrolling on that ticker screen?
The truth is, most people don’t. They’re too caught up in their own busy lives to consider the bigger picture.
But as the saying goes, “It is better to own the racecourse than the racehorse.”
In other words, it’s better to understand and own a portion of the system and be in control than to simply be a part of its existence.
And as I stand here, I can’t help but think that many of the people on this street are racehorses, tirelessly running in a race they don’t fully understand.
They are the ones being controlled by the system, rather than the ones in control. It’s a sad realization, but one that is crucial to understanding the true nature of the global economy.
As we go about our daily lives, it’s easy to take for granted the countless ways in which the economy touches us.
But if we take a closer look, we’ll see that our actions and choices have a profound impact on the world around us.
Let’s take a case study:
Consider a bank employee. She starts her day like any other, fixing breakfast, getting her children ready for school, and commuting to her office.
But as the day goes on, she’s constantly interacting with different sectors of the economy, from agriculture to information and technology to healthcare.
She checks her email and social media accounts on her phone, orders shoes from Jumia or Amazon, and takes an Uber ride.
All of these actions contribute to the broader economy, whether she realizes it or not.
But here’s the thing…
If this woman doesn’t take steps to invest in the companies and organizations whose products and services she consumes daily, she’s essentially a racehorse, running in a race she doesn’t fully understand.
She’s letting others control her economic strings, rather than taking charge herself.
It is a wake-up call for her and many others like her to be proactive and invest in the companies and organizations with which their lives are intertwined on a daily basis, in order to be masters of their own economic destiny.
You hear reports about the stock market often in the news, but do you really understand how it works?
The terms ‘’All-Share index,” “S&P 500,” and “stockbroker”’ can seem like confusing concepts, but they are all integral parts of a system that affects your personal economy and, ultimately, your own financial well-being.
At its core, the stock market is a global platform where goods and services are traded in the form of equities, or stocks. It’s a wealth-creation tool that’s available to everyone, regardless of education, occupation, or social status.
But it’s important to understand that, like in any game or business, there are different levels of players.
Just like in soccer, where FIFA sets the rules and regulations and there are players, coaches, referees, and fans, the stock market also has its own set of governing bodies and players.
In the economy, we have entrepreneurs, consumers, investors, stockbrokers, and stock exchanges, and all of them play a crucial role in the functioning of the stock market.
Likewise, in the stock market, there are two types of players.
The Two Types of Individuals in the Stock Market
- The Economic Puppeteers
- The Economic Puppets
What is Economic Puppeteer?
Economic puppeteers are the people that call the shots in the economic ecosystem. They control the system.
These sets of individuals can be grouped into four distinct categories: modulators, investors, speculators, and spectators.
The spectators are those who miss out on the game of creating their personal economy via the stock market entirely, simply watching from the sidelines.
They may know what the game is about but are often too fearful or skeptical to join in, choosing to remain as passive observers instead.
Such people are no better than the unconscious players—the puppets—and they often contribute to the emotions that flood the game (the market), yet they don’t invest in it in any meaningful way.
The speculators, on the other hand, are those who own the racehorses; they are the gamblers, watching the market minute-by-minute every day, attempting to predict the outcome and direction of the market.
While they have an active interest in the market, they are more focused on finding the next big stock to buy and less on owning the actual underlying businesses.
They follow the new and price movement, not the fundamentals. Although they are technically puppet masters, their activities can be likened more to speculating than actual investing.
The modulators are the regulatory bodies of the market, the FIFA of this global business platform.
They are the Securities and Exchange Commission (SEC), the Nigerian Exchange Limited (NGX), the National Association of Securities Dealers (NASD), and the Financial Markets Dealers Quotation System (FMDQ).
Finally, the investors are those who are in it for the long haul. They are the true puppet masters—the ones that control the game and reap the rewards.
They focus on the fundamentals of businesses, seeking out quality companies that offer long-term value. They are not driven by the emotions of the market, but rather by their understanding of the underlying business and its prospects for the future.
They take calculated risks, making sure to have a thorough understanding of the risks involved before entering the market.
These are the ones who have the potential to make a lasting impact on the economy and who will ultimately be remembered for their contribution to the progress of the economy.
The investor is likened to a chess player, with their venture representing the king piece and the other pieces representing the individual aspects of the economy.
The investor makes calculated moves, leveraging lesser-important pieces to create a protective moat around their enterprise.
While many people may be a mix of investors and speculators, it’s important to understand the distinction and find the right balance.
What is Economic Puppets?
Economic puppets are a group of people in the economic ecosystem who are unaware of the role they play in the economy and the stock market.
These are the ones who are unaware of how the stock market works and are simply at the paying end of the ecosystem.
They go about their daily lives, consuming goods and services, without ever considering the impact of their actions on the companies that produce those goods and services.
They are like the field in soccer or the stage in puppetry: essential to the game yet unaware of their importance.
The Consequences of Being an Economic Puppet
The effects of being an economic puppet are detrimental to your personal economic growth.
While it may seem harmless enough, there are real consequences to being an economic puppet.
How the Stock Market Affects Your Job
For example, when companies set profit growth targets for their CEO, that mandate trickles down to managers, supervisors, and ultimately to the employees.
This creates pressure to deliver and can lead to office politics and stress. In tough economic times, companies may downsize to stay profitable, leaving employees without jobs.
Employees cry while investors smile. But here’s the thing: you don’t have to be an economic puppet.
You can create your personal economy and take control of your financial future by investing in the companies, organizations, and industries that your livelihood is tied to.
By doing so, you become part of the group of conscious players, the puppeteers, who actively participate in equity investment and have a say in the game of capitalism.
It’s time to take control of your financial destiny. Be a player in the market rather than being controlled by it.
Also read in another post: Strategic Positioning for Dividends Income
It’s important to remember that, whether you realize it or not, we are all players in this money game, and understanding the stock market and how it works is crucial to your own financial success.
The level of your consciousness and understanding of the game determines your effect and financial reward.
If you’re unaware of your role, you are providing the pitch for the game without realizing it.
On the other hand, the greater your awareness and understanding, the more you are on top of the game, and the bigger the rewards.
It’s time to find out which class you belong to and start playing the game like a true pro
|About the Author|
Ini-Amah Lambert is a passionate advocate of personal finance intelligence and equity investing.
He enjoys educating people, particularly upwardly mobile busy professionals and beginning investors, about creating a personal economy and family business leveraging capital markets and equity investment. And also assisting them in developing a plan to provide a passive income stream, a secure retirement, and wealth.
He is a financial modelling and business valuation analyst with a degree in engineering, a business writer, and an effective communicator with extensive experience teaching financial literacy, investing, and e-commerce.
His works have influenced the lives of hundreds of thousands of people worldwide.
You can visit him on incomeprenaire.com to learn more.