We have been always delighted with “secrets of investment” through which we get power, riches, and success. Our belief in secrets and its natural cousins. Also conspiracies and superstitions, often appear when we are under stress. Especially when dealing with matters outside our control. Humans in those situations have increased illusory pattern perception. Creating imaginary links and connections in an unconscious effort to justify the outcome.
Wealth and material success links to a conspiracy mentality. With a belief that a small group of elites is pulling strings and deciding the course of history. Wealthy individuals besiege requests to reveal their secrets so that others might follow.
Secrets of Investment Success to wealth building.
If there are no secrets to wealth-building, what do successful wealth-builders have in common? What personal attributes are valuable in industries as diverse as retailing and investing? Are these identifiable common traits, in fact, the secrets to their success?
Here are several traits shared by all wealthy people:
1. Action Bill Gates reportedly said, “Television is not real life. In real life, people actually have to leave the coffee shop and go to jobs.” Most people fail to achieve their financial goals because they waste their time chasing rainbows. By seeking shortcuts, and hoping for good fortune. While it is possible to win the lottery the estate of a long-lost, forgotten relative, it is unlikely.
The consequences of inaction
2. Discipline Spending and saving habits are usually developed early and persist throughout life. Discipline to control your spending and save is critical to achieving financial independence.
H.L. Hunt, a Texas oilman reputed to be the wealthiest man in the world in the late 1950s. He continued to drive himself in a six-year Plymouth to work and carried his lunch until the day he died. Warren Buffett, the greatest stock investor of all-time. And also a consistent member of the world’s richest individuals. Continues to live in the house he bought in 1958 for $31,500. You should maintain a living standard that trails your income. For example, purchasing a new car in five years, rather than every three years. And investing the savings.
The daily choices we make determine whether we have excess capital to save and invest. Most Americans choose to consume, rather than save. Because they are unable to distinguish between needs and wants. Wealth builders postpone consumption to maximize their funds available for investment. For example, foregoing luxuries today to build a strong foundation for the future. As Dave Ramsey, noted stock market adviser and author, stated. “It’s learning to live on less than you make, so you can give the money back and have money to invest. You can’t win until you do this.”
3. Knowledge According to John Johnson, the game of poker is an excellent metaphor for human life. In both life and poker, we must deal with many factors we neither choose nor control. How we deal with those factors depends upon our knowledge of the rules of the game and past experiences. That is our own and those of others.
Investing requires a series of choices in an ever-changing milieu of consequences. Each choice has an element of risk that all or a part of the investment will lose. Or will return less than expected, or will return less than other investments. Learning when to hold or fold them is the skill every successful investor must learn.
George Soros was a founder of an international hedge fund with an estimated net worth of $22 billion. Recognized that his success was due to his experience. “I’m only rich because I know when I’m wrong. I have survived by recognizing my mistakes.”
4. Persistence The path of investment success is rarely smooth, but a series of peaks and valleys. Also the height and depths of which are unknown during the journey. It is likely to be a cycle of exhilarating highs and devastating lows. And testing the patience and determination of those determined to fulfill their ambitions.
There are no sure things in the world of investing. And this volatility causes many to lose focus, discouraged by setbacks and failure. “Most people give up when they’re about to achieve success,” according to Ross Perot. “They quit on the one-yard line. They give up at the last minute of the game one foot from a winning touchdown.”