What’s the Secret to Investing?
Ah, secrets. Possibly the most intriguing word in the English language. Especially with investing.
I mean, if we all knew the secret to investing, we’d be richer than Warren Buffet, am I right?
Jokes aside, the “secret” is often disappointing.
True investing success boils down to hard work and patience, or what I like to call discipline.
What do I mean? Let’s take a look at three types of discipline I work to develop with my clients:
- The Discipline of Planning
Before you even think about investing, you have to plan. Do your homework.
What do you hope to accomplish? What do you dream about? What is most likely to happen? How long until you need this money? Are you prepared to weather out good and bad years?
Without a plan, it’s near impossible to reach your goals. Developing discipline is thinking about the future.
- The Discipline of Commitment
You have to ask yourself, “Am I in this for the long haul?”
It’s easy to be swayed by our friends and family. Are you ready to commit to your plan even when it’s difficult?
I like to think of farmers in this situation. They keep sowing and cultivating their dirt to prepare for the eventual harvest of their hard work.
They don’t listen to their neighbors who are disgruntled and walk away from their work. Instead, wise farmers stick to their crops and earn yields even when others gave up long ago.
Thinking strategically can help curb your emotions.
- The Discipline of Adapting
How will you hold up to the pressures that life throws your way?
Successful investors do not react to temporary situations on the flip of a coin. Rather, they periodically evaluate their strategy, seek out prudent consultation, and make adjustments when circumstances have truly changed.
These tend to be big changes like retirement, age, health, inheritance, marriage/family, etc.
Discipline means adapting to these changes.
There you have it. The secret is out. To find success with investing, discipline has to be your priority.
I strongly encourage each of you to seek out a Fiduciary Advisor. They can help keep you on track and develop discipline in your finances.