5 one-liners that are going to make you a better investor
Personal finance can be summed up in 8 words:
Save a lot, invest part of it, repeat.
Why then there are more than 50,000 personal finance books on Amazon.com?
Because it’s emotionally very difficult to get this process right.
Each part requires continuous effort, the will to do some homework and get the basics right.
Today I want to give you 5 powerful one-liners that will inspire you into being a better investor, giving you practical tools that will help you out dealing with the tough emotional part of investing.
- Invest a bit each month for your entire life and you’ll beat almost everyone who doesn’t.
Invest a bit each month is the best solution for people who don’t have a lot of money to invest straight away, and sometimes for people that have plenty of money to invest.
The regret of going all-in at the wrong moment is always bigger than the satisfaction of being right.
Investing a bit each month will also allow you to get used to investing automatically, making it easier to keep going even when the results will not look great.
2. The most powerful way to grow your money is learning to live spending less, since your expenses are the only thing you have complete control over.
The stock market can crash tomorrow morning, the bond market can do the same and even your bank could go down and not being able to pay off the interest on your saving accounts. Ok, the last scenario is very extreme and highly unlikely to happen, but these 3 cases have one thing in common: all of them are out of your control.
What do you need to control, if you want to make more money?
Your personal expenses are the number one candidate.
If you can keep them low, you will need a lot less money to realize your goals and to retire early, regardless of what the stock market will be doing.
3. Change your mind as often as the facts change.
This is a crucial skill for an investor.
Investing is not an ideological game, where you choose a position and then you keep the same opinion on them forever.
From what I know right now, I can tell that stocks are the best financial investment to grow your money and ETFs or Index Funds are the best way to get access to them, but tomorrow it may change.
And in that case, I will change my mind (and I will let you know :) ).
When new products and new information emerge, re-assess what you already know and see if there is something that you should change in your investing strategy.
Painful in the short run, but extremely rewarding in the long run.
4. You can probably afford not to be a great investor — you probably can’t afford to be a bad one.
You don’t need to be a portfolio manager obsessed with his returns each year, but you can’t lose your money investing in bad products or get-quick-rich schemes.
Investing for “mere mortals” is like a tennis game between beginners: as long as you don’t screw up big time you will be fine, and the winner will be the player who makes fewer mistakes.
5. Imagine how much stuff you’d have to make up if you were forced to talk 24/7. Remember this when watching financial news on TV.
A lot of financial news is just fluff, so treat it accordingly and watch something more entertaining (I suggest Billions on Netflix if you really want to stick with something financial-related ;) )
One last thing: these 5 tips were taken from a much longer list, you can find the original article that inspired this one in the comments below.
