Before emerging a success in the world of investing, first you must have to embody these fundamental habits of successful and happy investors.
Investing sounds easy. Most of us who are into investing gradually get the hang of it, right? It’s not really that complicated. You can start investing by going to the stock exchange or any investing site, buying shares of any good company and sell them for profits later. But to be victorious in your investments, it's very important to be disciplined and embody the habits of successful and happy investors.
Effective investing habits will help you become a better investor over time because they push you to become more responsible for your investments and, therefore, more successful at them too!
In order to get rich investing in stocks and other assets, you have to follow these 15 habits of successful and happy investors:
The habits of successful and happy investors include being in charge of their emotions
Investors who let their emotions take over will lose money quickly. I don't know why exactly, but emotion-driven investors tend to buy too early or too late into an investment or they sell everything out of frustration when things don't go as planned right away. If you can learn to keep your cool in all situations and make decisions based on reason instead of gut feeling (or lack thereof), you will be more successful.
One of the effective habits of successful and happy investors is they invest with a purpose and a plan
Many people go to the stock exchange to spend time, not money. Without an investment plan or at least some kind of strategy, you will most likely lose your hard earned cash faster than you ever made it in the first place. There is this famous saying among investors: “Buy low, sell high.” What if there are no stocks that have great potential for a profit? Then why buy at all?
Successful and happy investors set goals and attain them
Your investments should tie into one (or several) of your bigger life goals , such as buying a new home or retiring early in order to spend more time with your family . Don't just take someone's word for it when they say that you should invest in a particular stock or other investment. Research that company and determine on your own if this is the right choice for you.
One of the habits of successful and happy investors is that they understand their investments
This one seems so simple you might not ever think about it, but I've heard many stories of people who completely lost control over their finances because they didn't know what was going on with them. It's very important to check every single detail of an investment plan, even though it takes time – just do it! If something doesn't make sense, don't hesitate to consult someone who knows more than you do about investing before making any further decisions regarding that investment.
Successful investors diversify their portfolios
The best way to reduce the risk of losing money is to have many different types of investments . Of course, not all your stocks might rise at the same time, but over a longer period you should see that most of them are going up or at least remaining stable.
They don't chase quick returns
If an investment opportunity comes along that promises 10% return every month and guarantees you 100% profit after 3 years, it probably isn't true. Think about how hard it would be for any company to do this and stay in business! If someone offers a terrific deal like this one , they must be thinking of something else – why else would they need so much money from you? Unless you're really sure what you're doing (and I mean really sure), stay away from the quick, high return investments.
Successful investors don't overvalue their assets
The more money you have tied up in an investment, the riskier it becomes . If your investment plan involves putting all of your savings into one company's stock, be very careful! If that company goes bankrupt or doesn't deliver what they promised, you will lose everything and probably even a little bit more on top of that.
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They are not influenced by people who know nothing about investing
There is this saying: “Never ask anyone for advice unless he is richer than you.” Apply this rule to everyone close to you – parents, partner, siblings… if they aren't extremely knowledgeable investors, they can be extremely harmful to your portfolio. They might have the best intentions in mind, but if you do something that seems logical to them, it's not a good idea.
They are not influenced by emotions
Emotions lead us to do irrational things . If you get excited about an investment or upset when something doesn't go well , stop everything and take a break for a while (or forever). You should always make investment decisions based on reason instead of feelings .
They bet on themselves
Hopefully, there will come a time when you don't need any outside help (financial or otherwise) in life – this is called being self-sufficient . Whatever you are investing in now, it should be something that will help advance your life goals. It's always better to bet on yourself than on someone or something else – you'll have more control over the outcome that way and you will feel a lot better about it in the end too.
They accept and acknowledge that they don't know everything
If you are reading this article, then chances are most likely high that you aren't an investing expert either. We all had to start somewhere – if there was one thing I wish I had known when I started my first investments, it would be not to panic and stop following every single piece of advice blindly. There is no best way to invest because everyone is different – you need to figure out what works well for you and go with your gut feeling!
They follow their own path in life
If you have a clear idea of where you want to go with your life and what you need to do to get there, it will be much easier for you to make decisions on how to invest . You can't expect the money coming from your investments to take care of everything – even if they help you move forward, they aren't a magic wand! If you don't use them properly , no amount of money will ever solve any problem, so always keep that in mind.
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They don't try too hard
All right, this might not really be an investing habit per se , but it's related. In order for things to go well for you in general, including the way your portfolio performs, you have to let go of your expectations . You can't be driving yourself crazy because you expect to get big returns from a certain stock. Just relax, take it easy and see what happens – if the time and effort was really worth something , then you will see results eventually.
They don't have any illusions about money
If you read some investment tips on how to make a fortune in just one day or how to become rich quickly (or maybe even rich overnight ), stop everything right there! You should know that 90% of all these things are not possible and they only exist so people who sell them can make money off of your desire for success without any real work involved. Be smart enough to realize that the only way for you to get rich is to work for it and stay consistent .
They are not afraid of losing money
All good habits start with the right mindset . If you want to be successful, then you need to believe in yourself and your abilities, even if things seem bleak sometimes. People who don't invest because they are scared of losing money have probably never made a smart investment yet since they won't get anywhere unless they risk something! Whatever you do , don't let this fear stop you from doing what's best for your future . You will always have that choice – either to give up or keep going.
The habits of successful and happy investors consist of having a clear goal in mind, realizing that there is no best way to invest because everyone is different; not trying too hard (it makes it harder to achieve anything), having faith in one's self, and never having any bad illusions about money.
Regardless of whether you are a veteran or just starting out, these habits will help you better handle your investments and, as a result, get more out of them. And that's what really counts in the end!
Read the Entire Investing Tips Series
- The Secret to How the Rich Stay Rich
- Top 10 Investing Basics for New Investors
- Ultimate Guide of Free Resources to Learn about Stocks
- 5 Things You Need To Consider When Choosing Stock Trading Apps
- Different Types of Investing for Different Personalities