The Keys to Successful Investing
In our previous blog, we discussed some of the myths that limit us from getting started and succeeding in investing. We have all been victims of some of these myths at one point or another. Now, in today’s article, we will look at what it takes to be successful in investing. We have done some research and compared notes with others who have addressed this subject of investment success and have come up with a list of 5 keys necessary for your financial success.
1. Writing Down Your Goals, Having a Plan
Did you know that about one in every 100 people has written down their financial goals and has a plan to meet these goals?
In His book “7 Habits of Highly Effective People” Stephen Covey says that the 2nd habit of highly effective people is that they begin with the end in mind. Articulating or writing down what you want to achieve through investing enables you to remain focused and motivated towards getting to your goal. So, take some time out of your routine and write down your financial goals, come up with a plan for fulfilling the goals and periodically review the plan.
2. Desire it, Believe it, See it
It is not enough to just write your goals. You must believe in them. In his book “Think and Grow Rich”, Napoleon Hill states that your financial success starts with the mind. Unless you visualize success and believe that you have what it takes, you will keep giving up or getting derailed along the way. Some of the things that can help you keep the faith include reading books or watching videos that motivate you towards your goals, constantly reviewing your financial goals and plan, looking for and interacting with individuals who are more successful than you financially and who encourage you to your financial goals and participating in talks, courses and forums that keep encouraging you towards your goal.
- Our life is what our thoughts make it. – James Allen
- Whether you think you can or you think you can’t, you’re right. – Henry Ford
3. Understanding the Money World
Robert Kiyosaki, a renowned investment teacher puts it this way – “The difference between those who succeed financially and those who fail is knowledge. He says that the reason many of us fail in investing is because financial literacy is not taught in school and many of us are ignorant about the financial world thus leaving us as victims.
In his book “The Art of War”, Sun Tzu, says that “if you know the enemy and know yourself, you need not fear the result of a hundred battles”. The money world is like war and if you do not understand what you are up against, you will end up being a victim and slaving for those who understand the money war and work it to their advantage. So, for you to be successful, you must understand how the money world works, who are the players and how you can position yourself for success.
4. Get Started and Be Consistent
Once we define our goals and gain an understanding of the financial world, we then need to go ahead and get started in our investment journey. A major key to succeeding financially is being consistent. Investing is more of a lifetime marathon rather than a sprint. Many people wait for a deal or some financial breakthrough as their key to success. However, one-offs have very little to do with your long-term financial success.
In his book “The Richest Man in Babylon”, George Clason states that money laws are like the law of gravity and they work all the time. His 2nd money law states, “Start thy purse to fattening”. He explains that for you to succeed financially, you must pay yourself first by saving part of your income and thus fatten your purse. In his 3rd law of money, “Make thy gold multiply”, he explains that you need to know how to multiply your wealth by wisely investing it.
5. Overcoming Failure
In his book “Think and Grow Rich” the writer says that success is always past failure. In other words, anyone who truly succeeds must have already failed before the success. It is said that on average, you will face a financial challenge that will significantly impact your wealth once every 12 years.
Therefore, it is wise to expect failure and protect yourself against the impact of a financial crisis. Insurance and having an emergency account are important to protect yourself. You also need to keep getting up once you fail and always know that success is on the other side of failure.