1 Plan
No matter how easy the famous investors make it seem, choosing your own investments takes planning. When you are considering different investment options, do some research on the company you are considering investing your money in. Examine their products and services to make sure your investment is a good one. If you are using an investment company instead of investing on your own, learn about it first. Find out what their success rate is. Above all, come up with a plan so you can reach your investment goals.
2 Save
If you are going to reach your financial goals, you will need to save money instead of spending it. No matter what age you are when you begin investing, saving money for your retirement will aid you in achieving your goals. The investment market is something you don’t have control over, but how much you save is. So, save consistently. Make it a habit to save and then invest your savings so that you can save even more toward your future.
3 Diversify
Split your investment money into different categories rather than putting 100% of it into a high risk, high yield investment that could go south and leave you with nothing. Instead, choose several different types of investments and make sure only some are the higher return investments that also are of a higher risk. Put some of your money into medium risk and lower risk investments as well. Opinions differ on how much you should invest in each, but consider that the younger you are, the more likely you can make up for any losses on higher risk investments. As you get older, the investment years you have ahead of you are less, so it might make sense to invest more into medium or lower risk investments. How much risk you are comfortable with depends is up to you.
4 Keep it Simple
Although investing does take some planning and research, it doesn’t have to be complicated. You can be successful and keep it simple. However, if you aren’t comfortable making investment decisions on what to invest in or lack the time to do the research on your own, you could use a robo-advisor to help you achieve your investment goals.
5 Don’t Give Up
Another thing the successful investors have in common is that they don’t give up in the face of losses. If you want to become successful at investing, you have to think long term and not panic if a fund you have invested in shows losses in the short term. The investment market is sometimes volatile and can have ups and downs. To be successful you have to ride out those ups and downs because overall, your investments will usually increase.
The bottom line is, just like the famous investors we have all heard about, you too can develop the 5 habits of successful investors to help you reach your investment goals for the future.
What, if anything, would you add to the habits of successful investors?
Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.
Warren Buffett is famous for saying to only invest in what you know and understand. I think that’s a good addition to this list. That will keep you from wasting your money on risky investments that you didn’t know were risky.