6 Investing Habits That Will Change Your Life, These are my 6 daily Investing habits
NUMBER ONE: INVESTING ASAP
Following this one is EASILY the most impactful in terms of how much wealth you can accumulate throughout your lifetime. When you’re young, one of the BIGGEST advantages you have when it comes to investing is really simple…it’s just TIME. Not only can you ride out any short term fluctuations in the market, but you can take full advantage of what’s called COMPOUND INTEREST. Every year that goes by without investing, is a year you won’t be seeing iNSANE growth 30 or 40 years from now.
NUMBER TWO: DON’T TIME THE MARKET
This is the SIMPLEST, most FACTUAL piece of advice you’ll EVER hear when it comes to investing…but it also happens to be the most difficult for people to actually follow.
And another study shows that generally speaking, the more trades you make, and the more you try to time the market, the lower your overall return becomes.
On the other hand…research has also shown that since 1926, a 20-year holding period of the stock market has never ONCE produced a negative result…
So without overloading you with facts and studies, all I’m going to say is this: The buy and hold investment strategy tends to not only be the safest, but also the most profitable for the majority of people. In fact, just buying in the market IMMEDIATELY – regardless of where its priced – has outperformed trying to time the market 71% of the time…
NUMBER THREE: DON’T INVEST IN THINGS YOU DON’T UNDERSTAND
I’d MUCH rather you just NOT invest at all than put your money into something you don’t fully understand. Especially in this market, where literally EVERYTHING is going up…it’s so simple to get disillusioned that investing is really easy, and get yourself accustomed to ALWAYS making money. But that doesn’t always happen. You need to understand that investing is going to be cyclical, investments will LOSE for years in a row…and you need to understand and know that going in.
FOURTH: DON’T INVEST MONEY YOU NEED IN THE SHORT TERM
When you invest money, there’s ALWAYS a chance that the value of that investment will go down in the near future. Investing should always be seen as a LONG TERM strategy. You generally can’t predict where the markets will be a few months or a few years from now – but, you CAN look back historically – and see that over a period of 10 or 20 years, your chances of coming out ahead profitable are pretty good. So, for that reason…investing any money that you’ll need within the short term is NOT a good idea, and could cost you a LOT if things end up getting worse.
Investing Habits That Will Change Your Life
FIFTH: INVEST CONSISTENTLY
Investing is just a way of life. All you need to do this is to AUTOMATE you’re investing as much as you can. Just set up automatic withdrawals into a broad index fund without even thinking about it – out of sight, out of mind. You don’t need to be actively involved with it all the time, but just consciously remember it’s there – and that’s it.
SIXTH: THINK INDEPENDENTLY
This is the hardest thing to do from everything I’ve mentioned, but it’s also the one that will make you the most money if you get good at it. And what I mean by this is that you MUST trust your own thoughts and research, and NOT be swayed by someone else who says otherwise, or disagrees with you.
So, it’s really from those 6 habits that I’ve formed my ENTIRE investing career…in fact, I can’t think of a single investment I’ve made without considering each and every one of these points I’ve just discussed. Just follow this, stick with it…smash the like button…and you’ll be set.