You want to make money. It is not an end, but a means to an end – a better life for you and your family. And you want to make money without stress.
It’s a justified desire, not a pipe dream, meant only for certain people. You can achieve this dream too. All you must do is imbibe the right habits.
You see, successful people don’t do extraordinary things. They do ordinary things extraordinarily well.
Here are five habits that will make you better at investment and help you achieve your dreams.
The best and keenest investors are voracious readers. Warren Buffett read between 600 to 1000 pages every day when he started his investment career. You don’t need to read as much. Nonetheless, do read.
But not just anything. Buy relevant books, subscribe to high quality newsletters, and stick to them like a toddler to its mother. The results will not be visible immediately. But over time, you will discover clarity in your thoughts and action.
Stick with What You Understand
Buffett rarely goes outside his circle of understanding, if ever. He sticks to what he understands, and it has paid him handsomely. You should follow his advice.
Don’t get lured into something you don’t know because somebody gave you ‘a tip’ that a certain scrip would grow fast. And don’t try understanding too many sectors either. If you put your feet in many boats, you will drown.
Stick with what you understand, and make sure you orient it better anyone you know.
Emotion is the biggest cause of heartache for investors. Greed, anticipation, excitement, attachment and more stop us from using logic while making decisions.
Denial when an asset is not performing hurts in the long run. Instead of waiting till your decision is vindicated (which might never happen), abandon the ship while you can. Also beware of greed. Your money works better as a marathon runner than a 100-meter sprinter.
Be as disciplined in your investment as your boss demands you be at work.
Investment is a long term game. If you want instant gratification, leave this game right now. Before you get hurt.
People who make money in the long run are ones who have learned the art of patience. They stuck to investments for long because they understood them. They did not read news every day or act on impulse because of market sentiment. They understood the difference between signal and noise.
If you want your returns to pay off in the long run, be patient. If you want to make quick money, be prepared for intermittent shocks.
If you keep doing what you have always done, you will get what you have always got.
To get more than what you currently have, you must open yourself to calculated risks. Investopedia suggests the following steps for taking calculated risk:
- Pick an investment after exhaustive research: Many online portals will guide you about the option which suits you best.
- Set an upside and downside price: Predefine how much money you want to make, or how much of the downside you can take.
- Calculate the risk/reward: Measure your ability to take risk, and the associated reward. If the risk/reward becomes unfavourable, don’t be afraid to exit the trade. Never find yourself in a situation where the risk/reward isn’t in your favour.
Investment is not rocket science. It’s just taking a few key actions, and repeating them over and over again, till they become habits. These good habits don’t just impact your money management positively. They also subconsciously impact other aspects of your life.
Which habits do you strictly follow to invest and grow your money?
Vishal is the founder of Aryatra, a venture to help individuals improve their productivity and live more fulfilled lives. He also is a digital marketing consultant helping businesses generate revenue from their online presence.
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