The thought of becoming a successful investor is frightening if you think of the seemingly daunting tasks you have to handle. But it doesn’t have to be so because success doesn’t have one standard. In fact, successful investing is more about achieving your personal money goals and not necessarily picking the “right” investment.
If you want to become a successful investor, these are six habits that will put you on the right path to financial success.
- Start Early.
There’s a famous Chinese proverb that says: “The best time to plant a tree was 20 years ago. The second best time is now.”
If you haven’t started, the best time to start investing is now, even if you don’t have a lot of money. The earlier you start, the longer your money works on your behalf. The idea here is to get into the habit and start developing a mindset that sees investing as a priority.
2. Create a plan.
A goal without a plan is just a wish. So if you want to become a successful investor, you need to create an investment blueprint that can help you chart your financial course. Start by figuring out how you want things to end up, and then work backwards. Think deeply and organize the investments and asset allocations that are likely to help you reach your goals. An investment plan is important because it acts as a roadmap.
Successful investors know that putting all their eggs in one basket isn’t so good that’s why they diversify. “For many “regular” people and beginning investors, low-cost index funds and exchange-traded funds can make a lot of sense. They’re broad-based and provide instant diversity across sectors. Additionally, if you add bond funds, you can get asset allocation. As you learn more and become more knowledgeable, you can add other investments from other asset classes, consider geographic diversity, and other factors, based on what you want to accomplish with your money.”
However, I advise that you invest a lot in real estate because it is the most reliable investment.
Consistent action creates consistent results. To be successful in life, one must be consistent, and the same is applicable in investing. One of the best ways to move forward is to be consistent. Outline the amount you can invest each month and set up automatic transfers to your investment account. This will prevent you from forgetting, or from letting other spending take priority.
Consistency can ensure that you keep your long-term financial goals in mind – and automated investing will help you work toward those goals without actively thinking about it every day.
5. Increasing your investment funds.
Whenever you get a raise, use a part of that money to increase your monthly investment contribution. Get yourself in the habit of seeing extra money as a way to advance towards your financial goals by putting at least a portion of any increase you receive toward investing.
When you’ve made investing a priority, it’s easier to make that call when you get new money. That’s why you need to make a successful mindset shift toward using investing as a way to reach your goals.
6. Consulting professionals
We live in the age of information overload and overnight gurus who are selling nothing but crap on the internet. Don’t fall for it.
“Getting help from financial professionals can be a great idea, especially if you find someone who can help you reach your goals and is willing to listen to you and help you put together a long-term strategy. In fact, it’s a good idea to visit with a financial professional than get stock tips from your co-workers. The wealthy often hire money managers and investment advisors. While you might not be to that point right now, getting a little guidance from a financial professional can provide you with outside perspective – and a better approach to your investment portfolio.”
Here are habits of successful investors.
- Start early or as soon as possible.
- Create a plan.
- Diversify your portfolio.
- Be consistent.
- Increase your Investment funds
- Consult professionals.