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7 Investment Lessons You Should Learn from the Successful Investors

7 Investment Lessons You Should Learn from the Successful Investors

Investing is a great way to make your money work for you and you don’t need any special degree to learn. Not everyone grows up learning about investing, saving, and money matters, but if you want to learn more, here are some great investment lessons from other successful investors.

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Investment lessons

    1. Ask for Advice From Experts

    You can learn many things by reading books and blogs, but sometimes, talking to someone is much better. A certified financial planner, stock broker, or other expert may be the best option to help you figure out your situation. They can give you advice based on their experience or laws and regulations regarding financial instruments. Even if you have to pay them a small fee, at least you know you will be getting real, solid advice.

    2. Plan for the Worst

    Tragedy can happen at any time. You can get sick or lose your job. Or the value of your stocks might go down. You might even die and leave your dependents. So, you need to plan for the worst. First, before you even think of investing your money, make sure you have an emergency fund, which should cover your bills and expenses for at least 6 months. Next, you need to have a good medical insurance plan that protects you and your dependents. Finally, you need a life insurance policy if you have people who depend on you. The size of the policy should be relative to how many dependents you have.

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    3. Give, but Give Carefully

    Giving to charities, churches, and other organizations is a great thing. These organizations give great service to the community and they help those who cannot help themselves. However, you must give carefully as well. Do not give up all your money, and before you do decide on a giving plan, make sure you have yourself covered first.

    4. Keep Working

    If you are young and strong, the best advice for you would be to keep working. Keep working for as long as you can because you have the best asset of all: time. The longer you work, the more money you have to invest. If you don’t plan to have any retirement income (side business, properties) then you need to work as long as you can, so you can build up your retirement fund.

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    5. Invest in the Long Term

    It’s exciting to see movie scenes where the main characters are on the trading floor on Wall Street, buying and selling and making millions at the turn of a hat. However, the truth is, unless you had a lot of money, skill, and time, you can’t make a lot of money with individual stock purchases. However, something that has been proven is the power of long-term investing. If you invest now in good stocks from reliable companies (or even in an index fund) and leave it there for 20 years, you can have enough time to ride out any dips and still come out on top.

    6. Invest in What You Know and Like

    During the famous Dot Com boom of the late 90s, people asked investing maven Warren Buffet why he didn’t invest in tech stocks and start-ups. His answer? He simply did not understand how they worked and how they made money. While many people think him old fashioned for not getting in on the Boom, this was ultimately what saved him from the impending crash. So, before you invest in individual companies, think of it as investing in a real business. Study the company and how they make money. And if you like the company and actually spend your money buying their products and services, then this could be a bonus.

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    7. Don’t Forget About Taxes

    Any income you earn—including that from selling shares or even other ways, such as payments from when you buy a structured settlement—is taxable. That’s why before you sell any shares or take out money from your retirement fund, make sure you have enough money for the taxes so that your gains will not be wiped out by taxes alone.

    Featured photo credit: Investment lessons via cdn-5.lifehack.org

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    Last Updated on April 28, 2020

    9 Millionaire Success Habits That Will Inspire Your Life

    9 Millionaire Success Habits That Will Inspire Your Life

    As technology evolves and information becomes more accessible, it has also become more challenging to define success. A lot of people are trapped in the rat race while trying to discover the actual formula for success.

    You could become overwhelmed with what tools, techniques or philosophies to imbibe while trying to get tips over the internet. At every click and turn, there are ‘how-tos and quick-fix’ on how to become successful overnight. You will find several courses, articles, videos and books on how to achieve financial success.

    But what if I tell you it doesn’t have to be complicated as people made it out to be? What if you could achieve success by merely following these 9 millionaire success habits?

    1. Read for Personal Development

    A daily habit I have discovered millionaires share in common is reading. For instance, if you are an entrepreneur, you need to read to become an efficient leader and a productive business owner. Reading helps you to grow and learn without going to a business school.

    A research conducted by Thomas Crowley indicates about 85% of self-made millionaires read at least two or more books each month. [1] Warren Buffett is one of these examples. He spends 80% of his day reading. In the early days of his investment career, he would read 600 to 1000 pages in a single day.

    While millionaires sometimes read for pleasure, they also learn to improve themselves. They read topics on leadership, how-tos, self-help, biographies, lifehacks and also follow current events.

    Here’re some recommendations for you: 25 Best Self Improvement Books to Read No Matter How Old You Are

    2. Establish Multiple Sources of Income

    Another success habit I noticed about successful people is that they don’t depend on a single income source. Every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.

    They are passive income addicts. They earn interests from loans, rental income from real estate, royalties from intellectual properties, dividends from investments. They also launch a side business or run a website or sell information products.

    How income is made either passively or actively is what separates the successful from the wannabes. They are always learning ways to build multiple streams of income.

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    3. Live on a Stipulated Monthly Budget

    An average millionaire does not believe in luck and jackpot. They take the time to understand cash flow-income and expenses. Based on this, they establish a monthly budget and religiously stick to it.

    The essence of the budget is to minimize unnecessary expenses. This will help you gain complete control of your financial life. Budgeting helps you to avoid overspending to achieve your financial goals. Here’re some tips to help you stuck to your budget: 32 Hacks for Sticking to Your Budget

    4. Manage and Maximize Money

    The most significant education for a millionaire is financial intelligence. Nobody attains financial freedom without gaining financial intelligence. This is the more reason millionaire, regardless of their income, keep their knowledge about tax strategies updated.

    They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax.

    Do you know that about 60 companies paid $0 legally in the 2018 tax year? Some of these companies that ‘avoided'(note: not evaded) federal income tax include Chevron, Amazon, Halliburton, General Motors, Delta. Their US income was totaled at $79 billion with an effective tax rate of -5%.

    What’s the deal? They got a tax refund.

    How do they accomplish these?

    An ITEP report indicated that they have the culture of throwing huge sums at tax experts who assist them in discovering creative, as well as convoluted means of paying little tax as much as possible.[2]

    5. Avoid Debt

    Another habit that separates the millionaires from the rest of the world is how they manage debt.

    They don’t live an extravagant lifestyle; instead, they only buy what they need and can pay for. They do not book hotels and flights by using their credit cards to pay for them.

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    They are conscious of the interest rates even when they use credits cards or take loans. If possible, they try to pay with cash because of its zero percent interest rate.

    6. Set Daily Goals

    It does not matter if they are setting up a business, a career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly goals to generate momentum in achieving their long-term goals.

    Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.

    Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars rather than hundreds of dollars.

    7. Don’t Act Rich

    The goal is not to act rich but to be productive. Interestingly, Thomas Stanley buttressed in his book that for the most prestige brands of cars, about 86% percent are toys of the non-millionaires. While most believe that people with huge fortunes tend to drive exotic cars, in reality the largest consumers of pricey cars are aspiring millionaires.[3]

    According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. Instead, they buy Hondas, Toyotas, and Fords like the rest of the world. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years as it would cost money. Millionaires invest in assets that appreciate.[4]

    8. Own or Buy Businesses

    In Robert Kiyosaki’s cashflow quadrant, he divided how you earn income into four quadrants. The E and the S quadrants take the left position while the B and the I are on the right side. According to Robert, it is possible to be on all quadrants, but the millionaires are not.[5]

    • E stands for employee – they work for others
    • S stands for self-employed – they work for themselves
    • B stands for a Business owner- employees work for them (500 or more employees)
    • I stand for Investors – Money work for them like Warren Buffet.

    Your goal is to move from the left quadrant to the right quadrants where you own big businesses or make money work for you.

    It is possible to become financially successful by pursuing what you love. For instance, if you love writing, aspire to be the best seller. Wealth and passion work together.

    Check out How to Start a Small Business with Little to No Money for tips.

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    9. Avoid Get-Rich-Quick Scheme

    A millionaire holds patience as an essential virtue. It takes patience to become successful, not only in finance but in every aspect of life. While it is possible to become financially successful at an early age, most millionaires hit it at age 50. They live a moderate life, invest in their future and retire rich.

    Bonus: How to Develop the Millionaire Success Habits?

    Having learned these habits, the next question is,

    How can I develop the Millionaire Success habits?

    Here are six values you will need to develop:

    Establish Your Life Vision

    You need to be clear about what you want in life to set yourself for a life of success. Your vision has to go beyond becoming a millionaire to understanding why you want to become one. Any great entrepreneur you will ever find has a clear vision and an established mission.

    Understanding why you are doing what you do will drive you to become the kind of successful person you want to be.

    Make Your Passion a Profession

    When your passion becomes your profession, work becomes pleasurable. Loving what you do enables money to flow to you and through you.

    So what’s going to be? Wake up every morning by speaking positive words into your work, love what you do, and focus on the work that brings you joy.

    Take a look at this article and learn how to make it happen: 5 Steps To Turn Your Passion Into A Career

    Focus on Solution

    Focusing on the solution means establishing the problem that you or your business address. This will help you focus on the solutions when others are faced with challenges.

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    A millionaire has a mindset that is fixed on the solution. He or she knows there’s a way out, and that every problem is an opportunity in disguise.

    Improve your problem solving skills with these tips: 6 Effective Ways to Enhance Your Problem Solving Skills

    Develop Your Leadership Skills

    Leadership skills are an asset that is indispensable if you want to develop a millionaire success habit. The more you hone your leadership skills, the more you will attract leaders who share your values.

    Be Growth-Focused

    Millionaire entrepreneurs prioritize self-improvement. Here’s how to achieve it:

    • Get a coach. Coaching will impact your life, and you will achieve peak performance in life and business when you have a life coach.
    • Be coachable. It is not enough to have a coach; you must be coachable. Sometimes, you need feedback and counsel to reposition your life and business. A coach has the wisdom and experience to counsel you from a higher perspective. The more you receive feedback and work on yourself, the more you become better at what you do and who you are.

    Flip Your Thought Pattern From Acting To Being

    It is not enough to have a millionaire success habit, you must also become a person of positive influence. This is how you can become significant. Bill Gates is not only rich; he is changing lives in Africa and different parts of the world.

    If you want to become successful, you must first be and think like a successful person. This is how resources you need can flow into your life.

    Here’s a final thought from me:

    It is not enough to do something to have something; success is about being someone who possesses what is needed to take positive and inspired actions.

    More Success Habits

    Featured photo credit: Austin Distel via unsplash.com

    Reference

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