Let Your Passion Drive You, One Step at a Time: An Interview with Timothy Sykes
This interview is part of our Entrepreneur Interview series.
Timothy Sykes -- full-time stock trader and teacher -- is in an industry centered around money, yet money sits on his back burner. For this entrepreneurial spirit and ruckus starter, it all comes down to passion, and letting that passion drive your business every step of the way. We were fortunate to sit down with Tim to talk penny stocks, transparency, and what it takes to survive as an entrepreneur.
The Plan That Backfired… In the Best Way
1. What made you decide to start exploring penny stocks, especially in the pre-Wolf of Wall Street world?
I was a tennis player all through my childhood and got injured my senior year of high school. I was already into college. I couldn’t play tennis, I didn’t really have to study, I was a nerd, I didn’t really party back then, so I was kind of bored. My parents gave me control of my Bar-mitzvah gift money - roughly $12,000. I started day trading in 1999/2000. By my senior year of high school, that $12,000 became $120,000. My parents and I were shocked because, from a middle class background, they gave me control of the money thinking I was going to lose it all - tough love! Then I’d know the value of dollar. Instead, the plan backfired. By the end of freshman year, I had turned the $12,000 into roughly $800,000. By the time I graduated college, it was $1.65 million.
I didn’t really choose to trade penny stocks. I wasn’t a little kid being like, “Yeah! Let’s go trade penny stocks!” I just made a lot of money and I was just like, “Wow. This is crazy.” I was in the right place at the right time. I had two casts on my arms, so I couldn’t really do anything other than type. I learned everything through trial and error. Unfortunately, there weren’t any public mentors back then. The Internet was just beginning. I’m very appreciative that the Internet has evolved over the past 15 years and now I’m able to mentor students and be kind of like the mentor that I never had.
Let Passion Drive You
2. What’s the hardest thing about being an entrepreneur?
Being an entrepreneur, you have to love what you do. It all comes down to love. It’s not about money, it’s not about possessions, it’s not about being successful. It’s really wanting it. Whatever that is. Whether you’re a musician, a poet, garbage man, doctor, violinist, penny stock trader. I got into a game that’s obviously all about the money, but I transitioned away from just being a trader to focusing on helping others because I found that I love that more. I’m not like Khan Academy. This isn’t free, I do make a buck. A few million bucks, actually. But I do what I love and I think that’s the most important theme for all entrepreneurs: don’t get away from that. Far too many people sacrifice their passion and what they get into business for. They’ve got to keep their VCs happy, they’ve got to keep their investors happy, they’ve got to make a lot of pivots that aren’t necessarily true to their heart.
I really wish more people would focus on their passion. You create better products. You might do projects that take years, if not decades, to complete and there’s not necessarily any financial success that’s a “gimme” right away. But if you focus on something you love and you actually believe in it and you’re competent, I think that you will have success eventually and it’ll be so much more gratifying if you do it your way.
What Makes It All Possible
3. Who has been your greatest inspiration and why?
I got started when the Internet was just beginning. I’d be in the high school computer lab and there’d be 12 computers in a row and I would load one webpage on each computer. The Internet was so slow. My whole journey has been through the Internet. I’ve traded stocks online and now I use all these cool social tools to teach other students on the Internet. So, the biggest inspiration? You’ve got to go with Tim Berners-Lee, the basic creator of the Internet that has allowed so much.
And I still think we’re just getting started. The Internet’s only 19-20 years old. We’re not even legal to drink! We’re at the dinosaur stage of the Internet and I’m really excited to see what happens in the coming years now that we have this whole kind of electrical geography, where everyone is tapped in. People are working together like never before.
“Put Up or Shut Up.”
4. Being poor sucks. Thoughts?
It’s both helped and hurt. I’m in finance, which is notoriously full of uptight pricks who only care about money. So, they look the part, they play the part, and they speak like robots. I just want to go in there and smash everything. When Will Ferrell used to be cool he crashed one of the MTV Movie Awards, just pranking other celebrities. That’s what I see my role in finance being, just pranking this uptight industry.
Being poor does suck and a lot of people are like, “Oh, but you shouldn’t talk about that. You shouldn’t talk about how much money you make.” I’m trying to make this more transparent. I’m not telling you about the money to brag. I’m talking about it to hopefully inspire you because it’s not just me making money, it’s also my students. My top student is up $675,000 in two and a half months. He just gave a webinar to my other students. It’s a full-on revolution.
In finance, the same kinds of mistakes are being made decade after decade. You have the same “gurus” who don’t share how well they actually do and claim to be experts. Now the Internet allows you to say, “You know what? Put up or shut up.” The future of finance - and all industries, I believe - is transparency and being loud-mouthed. Being loud-mouthed gets you attention. Finance is not a fun subject. There aren’t kids who are like, “I’m not going to play kickball or dodgeball today. I’m going to go study finance instead.” That doesn’t happen. But if you start showing off what you can do by studying finance and being loud about it…? I got an orange Lamborghini. Not a white Lamborghini, not a black Lamborghini, an obnoxious orange Lamborghini. And I have a $35,000 gold Rolex. I couldn’t be more cliche if I tried. I don’t care about any of that stuff, but I post it and I have it because it’s fun and I want to inspire and show people this stuff is useful even though it might be boring and it might hurt your head.
Do It For Your Love
5. Tell us about your transition from trader to teacher.
I’m a full-time teacher and trader. I’m pulling double duty. That’s why I’ve gained 40 pounds in the past two years. My student base has tripled, because I’m working my butt off 16-18 hours a day. It’s a lot harder to be a trader and a teacher. A lot of teachers are people who can’t do. They think “Oh! It’s easy, let me just teach you because I have nothing better to do!” I’m trying to do the most difficult thing by combining both professions and I think I’m doing a pretty decent job. Every single successful trader I’ve talked to thinks I’m crazy and every single teacher thinks I’m an ass. I don’t make many people happy who are outsiders, but I make my students happy.
I’m trading well, making a lot of money and then I spend my evening hours working on blog posts, video lessons, webinars, new websites, new tools, new YouTube videos. It comes back to my earlier comment - you’ve gotta do it for your love. It’s not about the money, it’s not about the possession. I love teaching, and I love my students.
Understanding Human Nature
6. I think it’s safe to say that the average person didn’t know a lot about trading penny stocks until The Wolf of Wall Street. How has that movie impacted your business and the industry in general?
They didn’t really get too technical. There was an earlier movie called Boiler Room which got a little more technical about what penny stock scams are. I think that some people who find me through this movie are kinda confused. They’re thinking “Oh my god, all you do is trade scams!” Yes, I do bet against scams. I can actually bet that they go down which is how I made half of my $4 million in trading profits, but I also buy some of these penny stocks that are booming. There’s a company called Plug Power. I was buying their stock at $1.18, and now it’s up to the $7 range in just a few weeks because they made this alternative energy solution that’s now being adopted by Walmart and FedEx, and they’re not a scam. They actually have this real product and cool technology that’s being used by this giant companies.
The movie just brings to light the potential for ridiculous wealth. I don’t condone the way that he made his money. He is a scam artist. I’ve written several blogs posts about it. He’s trying to portray himself as this master salesman but really all he is is a master criminal. He never mastered any sales process. It’s a Ponzi scheme. That’s one way of making money in penny stocks. It’s not the legal way; it’s not the ethical way. You have all these unethical people like Jordan Belfort who trade and manipulate these penny stocks and the beautiful thing is that none of them are very smart! The patterns they create are so predictable. I wanna teach people more about human nature and how once you understand that you can profit off it in the stock market. Penny stocks are just the vehicle we use.
One Step at a Time
7. Since you’ve turned just over $12,000 into over $4 million by trading penny stocks, do you have any advice for young entrepreneurs? What do you wish you’d known at age 18?
It’s nice to look back and say, “Look, $12,000 into over $4 million - that’s an awesome ride.” I never saw that whole process all at once; I was never gunning for a specific value. I would encourage all young entrepreneurs to really take it one step at a time. Put in place the right tools and get on the right path. The way I went from $12,000 to $25,000 is the same strategy that took me from $25,000 to $50,000, then to $100,000 and then to $200,000. I’m not changing anything. When you’re first starting a company or starting in the stock market, the key is not to focus on the end-game. Don’t say “I wanna sell my company to Facebook for a billion dollars.” I would say (if I’m starting an Internet company, for instance) “Here is the problem. Here is how we’re going to solve it. Day by day, we’re going to try to make our product better and solve that problem better.”
You really need to start small, and if you’re on the right path and you stick to that path it’s amazing how much you can grow. I never knew that I was going to be a career-long penny stock trader, I just followed the path. I was making money every year (not on every single trade, I still only win 70-75% of the time) but I put in place these trading rules that I’ve learned over 15 years of trading and that helps me have an advantage on every single trade.
You have to be okay with being wrong, but really try and understand whatever industry you’re in. Stick to your strength, find your passion, create rules, try to use “trial and error” to see if you’re going to be more successful with this strategy or this product. I want more people to refine their strategies so that they really become experts. I know in our society it’s great to try and be well rounded - I’m not well rounded, as you can tell by listening to me. It’s about finding something really successful and pushing it and seeing how far you can take it.
Transparency = Trust
8. Thought on switching companies and/or founding companies?
I hate that, getting an email from somebody that I haven’t heard from in a few months and there’s a new footer on their email and I’m like “What happened to the old company?” And there’s no explanation. Investor money was lost; reputation was lost. How do I trust that guy? I really want more transparency. I show every single trade that I make. When you hear $12,000 to over $4 million, you’re suspicious. But you can see every single one of my trades. My students, who are now turning thousands into millions -- you can see every single one of their trades. I wish there was more transparency in the tech sector. Why did this company close its doors? What went wrong? Was it the founders fault? Was it the product’s fault? Was there a competitor? With full transparency, that’s how you learn. That’s how an industry evolves, and you just don’t see that enough.
The Perfect Storm
9. Here at Onboardly what we do is is PR, content marketing and social media for startups. How have you used those three strategies to grow your business?
I’ve always used social media ever since I started just because it’s been one of my tools to not only get followers but to broadcast. When we first started, there weren’t really any tools for me to give real-time trade alerts so I got very used to Twitter very early on, Facebook too. There was a site called Covestor that allowed you to verify all your trades. They would tap into your brokerage account, and when they first started there were three or four hundred financial bloggers who had the Covestor badge with their performance on their blog. One by one they started dropping off because their performance sucked and I became the number one ranked trader out of over 50,000 users on Covestor. That was a huge help to verify and show that I’m not full of it, so I used social media from the beginning.
When two of my students passed a million dollars within weeks of each other (and that was right in December, the month that The Wolf of Wall Street opened) it was the perfect storm. I was on FOX with Neil Cavuto and then on FOX & Friends and both segments intro’d us with The Wolf of Wall Street. I put out a press release, and it didn’t have anything to do with The Wolf of Wall Street, I just said that average Joe’s can now be professionals, look at my strategy. The hook that the media really liked was that penny stocks are in because of The Wolf of Wall Street. So I thank Jordan Belfort and his scamming ways. He’s gonna go straight to hell and he deserves to...but without him I don’t get as much exposure for my business of teaching. In effect, this is probably the best thing he’s ever done.
10. Anything to add?
Look, I’m not even that smart. I’m not that good at math, and it’s kinda crazy that I’m a stock trader because a lot of my job has to do with math (even though it’s simple math.) I really believe that people need much more motivation. I wish that more ridiculously rich and expert people would come forward with their stories more and not just to brag, but to really inspire people and show them what’s possible.
You don’t need to go the old, established routes to be secure. I know that many lawyers and doctors aren’t happy with their profession and they wish that they would have followed their heart instead of their parents. I hope that my story and my passion can help you understand that you’ve gotta do what you love. It’s not just about the money, even though that happens to be my industry. If I was this amazing poet, I would be showing you some amazing, new, beautiful poetry that I had written, but instead I trade penny stocks so I talk about the money that I and my students make. No matter what industry you’re in, I want you to get inspired and realize that you can do anything in this world because of the Internet.
After turning $12,415 into $4.2 million, experience led Tim to create Profit.ly, a community of over 35,000 traders who share their performance and trades openly to help each other learn and improve. He’s also founder of Investimonials.com, a community of over 45,000 investors and traders who’ve reviewed over 25,000 financial products. He’s not a full-time teacher, passionate about helping his students realize the potential of trading.