Now you are making money from your salaried job or Business. What do you do with the money? Do you spend it all? Or are you looking for how you can make the money work for you to earn you more money? If you are what I think you are or would want to be – a savvy entrepreneur – I want to believe you will want to put your money to work in order for you to earn more money. You want to truly be above money problems. This is where this piece comes in handy for you.
What kind of Investor are you?
For those who already have the money to put to work, I would broadly categorize them into the following:
These are those who come up with all kinds of reasons why investing does not work. This group of people end up never getting down to investing. They may know all there is to know about investments but always convince themselves that the time is either not right or that other parameters are not in place to invest yet. I have a friend who, even though he has a degree in Economics, belongs to this group.
2. The Gamblers
These ones see investing as a chance thing. They would rather go for an investment where they are promised a bigger than normal returns than look before they leap.
3. The Smart Investors
These are informed about the rules and principles for investing and they follow them clearly. They take calculated risks where necessary. They understand their risk nature and stay within it. They seek as much information as possible to aid their prudent decision making. They are focused and cautious. They understand the markets well and know when opportunities arrive.
Characteristics of Successful Investors
They have a high level of determination to succeed. They are not pessimists or cynics.
They develop a deliberate strategy for success. Where a system they develop work well, they keep on refining it and applying it consistently.
They do not let market downturns or economic downward spiral deter them.
They look past previous failures or wrong decisions and look forward to positive futures.
They have good control over their spending. They refuse to spend all they earn but are wiling to reinvest their earnings.
They are goal oriented.
Traits you need to possess to be a Successful Investor
A desire and commitment for investing.
Ability to plan your investment goals.
Ability to seek out information (facts & figures) and analyze them for profitable decision taking.
Ability to take calculated risks.
Possessing a long-term perspective rather than seek to make gain only on the short run. You must do away with “get-rich-quick” thinking.
Ability to take a systematic approach to investing.
Being skeptical about fads.
Making investing a habit.
Patient for the long-haul and not panicked or disturbed about unfavorable news.
Not putting all eggs in one basket but have a broad mix quality investments.
Knowing that downturns in the economy or market often offer the best opportunities to make the most returns on the long run.
Risking only minimal percentage of capital in speculative ventures which if they result in loss will not make you lose sleep nor will it take food from your table.
If you are serious about becoming a successful investor, you must understand and apply the above mentioned things. You must invest in those areas you are comfortable with. You must avoid get-rich-quick approach that may eventually burn your fingers. You must necessarily put time to understand the nature of investing and the particular investment you wish to engage in.