My story begins in 1987 when my wife and I owned our $150,000 dream home, had $300,000 in company stock, and a net worth of over $500,000. When I say we owned our home, I mean we OWNED our home! We had the deed to our property in our possession and were on top of the world.

We belonged to a country club and played golf three times a week, I had access to a company helicopter that shuttled me to meetings, and our family had everything we wanted or needed. At the time, I was thirty-nine years old. I had worked hard to get to this place and believed there was nowhere to go but up. Was I ever wrong!

On Monday, October 19th (also known as Black Monday), the stock market crashed and my investment portfolio went from $300,000 to $225,000 in one day! Had I been smart, I would have taken my lumps and sold it all that day. I did not. I held on to the bitter end and our $300,000 investment portfolio was eventually reduced to $60,000.

That was a huge blow to our financial situation and I unfortunately learned another very valuable lesson that day: diversify! No matter how good an individual stock may seem, it is always good to have your hard-earned money in more than one investment vehicle.

To make the rest of a very painful story short, we moved into a smaller house and my life as a highly paid computer sales rep was over. I was then stricken with a life threatening illness in 2001 that pretty much ended my career forever.

By 2001 we were down to less than $100,000 in net worth, had a big mortgage on a smaller house, and my wife was working forty hours a week just to support us. She had always worked and thanks to the insurance she had with one company, I recovered from my illness, but the situation left us financially devastated.

We thought we had done everything right to prepare for our "golden years." We saved more than 15% of every paycheck starting way back in 1975. We took advantage of every savings program offered to us and we had plenty of life insurance. We really felt like we did everything right until that fateful day in 1987.

As if the diversification and take your lumps lessons were not bad enough, I then had another lesson to learn: do not become a day trader! I became a day trader in late 2003 and was doing okay for a while with what little money we had left. Unfortunately I made one really bad move that wiped out the rest of our nest egg.

My mind has thankfully blocked out some of the details over the years but I do remember that I needed to cover a “margin call” (meaning I had to deposit more money to cover some losses) that took care of what we had left.

Trading on margin is when online brokers loan you money to buy stock. Then when things go wrong they want the loan repaid immediately. When a stock that I thought was going to take off went the wrong direction, they wanted their money!

When it was over, the online trading company emptied my account and I learned my last lesson about investing. Online trading is not for amateurs. It can be financial suicide!

It is like playing against the house in Las Vegas. The cards are stacked against you.

Had I diversified before the crash, the impact would not have been as great. Had I taken my lumps, I would have escaped with 75% of the value instead of the 25%. Had I not become a day trader, we would still have $50,000 in the bank.

My wife and I are now in our sixties. At one time, we were in a perfect place to support the retirement lifestyle we planned. Due to the very bad investment decisions I made, we lost a lifetime of effort and savings and are living on social security.

I therefore humbly offer the following advice when it comes to investing:

1. Diversify, because every stock can eventually go the wrong way.

2. Take your lumps because it can get worse.

3. Leave day trading to the sharks and never trade on margin.

The good news is that our family has remained close throughout the entire ordeal and we will never quit! Which brings me to my last piece of advice, don’t quit and never give up.