THE 7 HABITS OF A SUCCESSFUL INVESTOR (Secrets Banned in 19 Countries)

 The Secret Guide to Habits Of A Successful Investor

Successful investors didn't become that way overnight. Success takes a lot of things, including building these essential daily habits. 

That saying about change being the only constant in life never felt truer than during pandemic times. Just as we changed our behavior to help guard against the spread of Covid-19, we can take steps to protect our financial lives from future turmoil.

For most people being successful as an investor means reaching their financial goals. They fail to categorize their investments or their financial goals on and short term and long term basis. This mindset is what differentiates a regular investor from the most successful investors around the world. You need not be a financial expert to invest your money in a meaningful manner.

Numerous studies have shown that individual investors who think logically rather than acting emotionally or invest on a long term basis rather than meeting unnecessary short term goals have always shown a belief in their decision making and a commitment towards their regular and timely contributions. Therefore, to succeed as an investor, you may need to change your financial habits.

Even as technology and apps are changing how we invest, there's no substitute for learning fundamental habits that can positively influence your earnings in the long run.

In this article, we've laid down 7 indispensable financial habits that have been witnessed amongst the most successful investors over the years. 

Let's get started:

 #1. Have an investment plan

Whether it's about family function or retirement, successful investors always have a blueprint to accomplish their financial goals. This plan clearly defines their goals and practical, measurable steps to achieve them. It is regularly reviewed and re-assessed as per the changing market situations. Professional guidance with regard to the same helps you in researching better and allocating your funds in an ideal mix of assets-stocks, bonds and cash savings. Using different models, you can calculate your average rate of return and adjust your investments accordingly as per your portfolio's performance. As per the study, most successful investors start with a long term vision, leaving appropriate space for short term goals that follows.

#2. Save early and automatically

It might sound crazy, but if you want to be a good investor, you need to start investing. As with anything, learning how to invest money takes some practice and the best practice comes from doing the actual thing. That isn't to say you should start investing without a plan, but it's typically a lot easier to get better at something if you're actively doing it. It's never too late to start the habit of saving. You can get started right now by using some of the best investment platforms online. Each platform is different, but they all make it easier to invest and keep track of your money from anywhere. As long as you have an internet connection, you can review your portfolio straight from your phone or any other gadget. 

#3. Stick to the plan

It is human nature to move towards security. Whenever the value of an investment falls, ideally the investors tend to take their money out of the markets. A study shows that the best investors around the world don't do the same. Instead, they rebalance their portfolio and maintain an allocation to different stocks accordingly. The study revealed that people who stayed informed and followed their plan saw their investments grow by approximately 147%. Had they taken out their money during the financial crisis, they would have suffered losses. Don't get anxious when the stock market drops. Rather deal with the same calmly and stick to your long term investment plan to achieve your goals.

#4. Set an asset allocation and diversify

Part of what can make it tough to build an emergency fund is lifestyle creep. As we hopefully earn more, we often ratchet up spending without thinking about it. We upgrade phones or cars and take nicer vacations rather than increasing our 401(k) or IRA contributions. Financial planners came to a conclusion that most of their clients who are just over 50 and struggling to get to retirement are in such a bind in part because they let spending rise with their income. They had great careers, but never really got ahead in their saving, so they always felt like they were just getting by. Saving a lot for retirement can be near impossible with a family to support, of course. It is advisable that parents whose children have moved out should use the cash flow they had been spending on tuition and other expenses into their retirement accounts to try and catch up.

#5. Spend less than you earn

With many people expecting future stock market returns to be muted, it will be more important than ever to keep an eye on the fees charged for your various accounts and investments. Fees have come down for many investment products in recent years, particularly in index funds and exchange traded funds, but one area where investors may forget to keep an eye on fees is in their workplace retirement savings plans. Plans usually offer both actively managed and passive funds and the expense ratios on passive index funds are usually much lower than those on actively managed portfolios focused on the same style of investing. For most people, keeping investments simple, in passive, low cost index funds, is the most cost effective strategy.

#6. Realistic expectation

Savvy investors are well informed about the market conditions, thereby keeping their expectations realistic. Never invest in a business you cannot understand. Most successful investors are not experts with every stock that they hold. They educate themselves about the financial conditions, helping them to make informed decisions as per their expectations. At the same time, it becomes equally important for an investor to take calculated risks. Most people, even after having realistic expectations fail to avail the benefits of the stock market because they are not able to measure their risk appetite properly. Remember, risk and returns go hand in hand. In the expectations of brighter returns, do not end up taking a lot of risks.

#7. Staying the course

Thinking long term pairs well with staying the course. As you focus on long term goals, you don't want to deviate too much from the plan you've set for yourself. Successful investors are in it for the long haul, which means they have to be consistent in their habits. If they know something works, they won't adjust their investments because they're having a bad day, week or month. They stay the course and believe in their plan, research and goals that led them where they are. With this in mind, you should regularly take a step back and make sure you're staying true to your goals by evaluating your actions. This may involve more research and learning, but it's better than idly sitting by and watching an investment stagnate or disappear because you didn't notice it was no longer building toward your stated goal. Yes, you may have to change your tactics now and then, especially if something major has shifted the market, but as long as you stay the course toward your goals, it's okay to make some strategic changes.

Bottom line, It's easy to start investing, but it's hard to instill in yourself the habits needed to become a successful investor. It's never too late to start though. The sooner you start investing and working on these habits the quicker you'll start down the path of reaching your financial goals.

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Written by: Antony Moturi

DJ | Social Media Specialist | Online Marketer | Content Creator | Sound Engineer