The opportunity to invest in the 21st Century world is everywhere—Instagram posts about making millions on investment option strategies, or TV commercials about opening a stock trading account, where does an individual start?
How do you become a successful investor? Successful athletes profess the ‘10,000 hour rule’ of repeating good habits to develop muscle memory. Good habits help entrepreneurs become successful, keep doctors accountable, and also bring success to investors. These five habits can change the way you look at saving and help build your wealth for your future endeavors:
1. Set goals, understand where you want to be.
Goal setting is a major attribute in becoming successful, but also in measuring your success in saving and investing. Working towards a goal of buying that vacation property on the lake, or starting your own small business will keep you focused on the long-term rather than getting unnecessarily caught up in the noise and ups and downs of the financial markets.
2. Create a plan.
Having a plan is the best way to reach your financial goals. A financial plan, jointly developed with your trusted Investment Advisor, is used as a roadmap laying out the financial plans of your life while giving you the information needed to reach goals along the way. When your plan becomes outdated, or unexpected life changes come into play, make sure to update your plan, keeping you on track for your long-term goals.
3. Save and pay yourself first.
Saving and “paying yourself first” is the main way an individual will build wealth. Warren Buffett said “do not save what is left after spending, but spend what is left after saving.” The easiest way to set this up is a direct deposit into an investment account from your paycheck. Being more conscious about spending, building a portfolio and saving your money to work for you will build wealth.
4. Stay invested.
A long-term outlook on saving and investing should be used when looking to create wealth. Saving 5 percent a year throughout a 20-year career will result in a profitable investment portfolio, Successful management of that plan will result in obtaining your financial goals. Trying to ‘shoot the lights out’ with investments looking to double or triple your money quickly is a risky and unprofitable investment strategy that can leave you with much less than you started with.
5. Seek help when needed.
The 21st Century is a world of information and technology saturation, which at times can be overwhelming and confusing. If you do need help, there are many professional financial advisors willing to help. This could include alternative points of view on the financial markets from an economist, tax strategy planning with accountants, or portfolio management if you don’t have the time or expertise in managing your money.
Investing to obtain your financial goals should be a continuous priority. Successful saving strategies and building wealth will provide comfort and help you reach your future goals. Building these good habits will help build a base to become a successful investor.Opinions expressed here by Contributors are their own.