Like it or not…This is the race that stops the nation.  An annual event that is almost as big as New Year’s celebration in Australia.  I’ve been to the Melbourne Cup.  Stood in the rain (one year) and watched the GeesGees go round and round.

The spectacle of the fashion, the drunk guys & girls and just forgetting about most other things and hanging out with some friends.

And looking back I reckon there are a FIVE lessons I’ve learned that I’d love to share.

1. Everyone has an opinion but not everyone should be listened to.

How many people do you know – friends or even media personalities – all keen to give you their ‘hot tips’.  And will be only to willing to share with you about past winnings.  And rarely declare the losses they’ve made.

Friends and strangers alike can potentially be harmful when it comes to your money decisions.  The Melbourne Cup is one of the classic examples of when you shouldn’t be following big talkers, people who may have bet well once or people who you overhear as you queue up to buy a drink.

Everyone has an opinion – sure.  But how many have a proven track record?  How many are enjoying the lifestyle because of experience.  And because they are willing to share the pitfalls and challenges with you – so you can avoid them.  Rather than trying to highlight the short-cuts to obtaining good results.  Make sure you seek opinions from experts, not amateurs and big talkers.

2. Dream big but dream realistically.

We would all love to win the Melbourne Cup sweep. That trifecta and just live it up.  We just need to recognise that it is still a gamble and not an investment.  Why gamble your financial well-being when you can make a series of little prudent steps, checking for approaching storms in order to gain reliable, stable, predictable returns?.

The Melbourne Cup is a fun day out indeed; and there is nothing wrong with putting a small amount of money on the line and having a bit of fun.  But future proof your life through investing, not gambling. And if you want to gamble, make it a small gamble.

Believing you can “make it” on one horse – on one single investment and one time – is just a gamble.  And nothing more.  Be prudent.  Have a structure or a plan.  Dream big and plan using realistic and measurable steps.

3. The favourite isn’t always the winner.

Sometimes we think the best strategy is to follow the crowd.  But what is the best strategy?  What may have worked for you in the past may not work for you now.  And the best plan can be different from the ‘right ‘ plan.

We feel safe if we do what everyone else is doing.  But often the greatest outcomes are from doing  our own research, thinking for ourselves, obtaining our own advice and pursuing our own path.  Don’t try and keep up with the guys in the fancy suit.  Or buy that dress to look better than whats-her-name.

I know that when it comes to investing, most of us are hard-wired to make all the wrong calls, to invest more when the markets are going up, rather than capitalising on profits and waiting until the market falls before investing further.

This is especially true on Melbourne Cup day, when no one can predict the winner!  The favourite is never going to make you as much money as backing a horse that is less popular (if it comes in!)

4. Do your homework before investing.

In the heat of Melbourne Cup excitement, you might get distracted into betting your money on a horse whose name your fancy, or your friends are choosing.

While no one has a crystal ball.  Professional punters do their homework, study the form guide, use their information advantage to make the best decisions they can.  So, act like a professional punter.  Get informed & take advice from the experts.  Especially in regards to your financial future.

5. Know Your Limits.  Enjoy Tomorrow Without A Hangover.

The Melbourne Cup can expose our weaknesses.  The desire for the ‘quick fix’ and to extend ourselves over and above our limits.  Before you know it – you’re borrowing money because you’ve run out.  To bet on that ‘sure thing’.  You’ve lost focus because of all the champagne – but decided another glass (or bottle) will fix everything.

Don’t endanger your lifestyle goals and those of the people you love.  Because you don’t know (or care about) your limits.  Have a stop-loss.  A maximum investment position.  See it through.  Be safe so that not only can you ‘go again’ later – but you can wake up tomorrow without the embarrassment and need for a panadol.

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