We look at successful investors thinking – wow, how they managed to achieve so many incredible things? We often ask ourselves a question of why we are unable to do things these investors are doing.
The main difference between a successful investor and the rest is the way of thinking, which depends, first of all, on the existing skills. It is a set of different skills and habits that allows a person to achieve financial freedom faster than others.
What should an investor be able to do to keep his standard of living high? What is the key to investors’ success? Well, let’s explore the reasons in our article.
1. Know How to “Pay Yourself”
The ability and habit of constantly saving a certain amount of your income as investment capital are inherent to all successful investors. This is the basis of financial literacy, which was observed in ancient Babylon – the richest city in the history of mankind.
Start paying yourself first, and then – to others. For example, put the 10% of a received salary immediately on your personal deposit.
Living on 90% of the usual income is not so hard. As a result, you will start to accumulate investment capital, which in the future will allow you to become a financially free person.
2. Understand the Perfect Time for Investing
Some novice investors, as soon as they have a decent amount of money, start trading stocks or Forex without thinking of consequences. Basically you need to understand what is the perfect time to start investing in any market – when prices are likely to go up or down.
It is especially true for the Forex market. A lot of rookie investors do not know the meaning of bull and bear in Forex trading thoroughly. They just think it is about prices going up and down and nothing more. However, experienced traders analyze this concepts comprehensively – into more details. They know when it is a good time to invest money.
3. Make a Personal Financial Plan
Find a sample of the guide to the personal financial plan and start budgeting on it by planning your future expenses. The first time can be difficult, but this habit is simply necessary for every successful investor.
By the way, the skill of personal budget management and planning in investment activities will play you only “in plus”: you will be able to more clearly understand how much tool (shares of companies on the stock market) you bring profit.
As a result, you will be able to increase your profits by knowing this.
4. Increase Capital and Create a Reserve Fund
If your goal is financial independence, then first you must achieve freedom from money. It is assumed that financial freedom is when you are not working and you have an amount that allows you to live at least 6 months while maintaining your standard of living.
Create a contingency fund. Also, do not forget about the growth of your investment capital: reinvest the profits, and do not forget about the first habit of a successful person – to put off part of your basic income for investments.
5. Consider Risks and Don’t Chase “Fast Money”
It is always worth remembering about the risk of losing all your capital or part of it if it is unreasonable to dispose of investments. Do not chase “fast money”. It is much more important that your capital grows always, albeit not at the fastest pace.
Even 1% per month will give a good increase on the long term of investment, provided that all income you capitalize.
In this case, a complex percentage begins to work – one of the ingenious concepts of humanity, giving enormous opportunities!
6. Be Patient
Patience with investments is always rewarded! How often novice investors, throwing money into their trading account, just succumb to the desire to buy something. That’s not how investing works.
Very often in such a situation the skill of a successful investor as risk accounting is dulled. The euphoria of the anticipation of fast earnings begins. As a result, the investor makes unreasonable decisions on their trading operations.
Therefore, be always patient and believe that such behavior in the market can bring even more income than hasty and ill-considered transactions. At the same time, your nerves will be fine.
It is always a good idea to apply the knowledge immediately in practice – start to get more education, learn from experienced people and you will gradually master these skill. Who knows one day each of us can become a successful investor.
