How To Be A Successful Investor
The 6 Behaviours To Cultivate To Have Your Wealthy Life
Behaviour counts for 80% of all life's successes.
The way we live our life; the way we invest; the way we interact with our money and our assets; and the way we consume – all determine whether we get to savour and experience the true joy of life or whether we struggle and suffer.
There are six key “Ways of Being” that we need to master to be a successful investor and experience the gifts that come from having assets working hard for us.
Watch this video now to dive into these 6 principles.
Wealthy Way of Being 1: Embrace Boring Is Beautiful
“Ann – you're someone who epitomises the living full and fast. Delighting in the adrenaline filled aspects of being alive. Adventure, curiocity, wonder and exploration. Why are YOU talking about “boring is beautiful”?
Make your life a wild, crazy adventure but keep your investing and money stuff boring!
Your wealthy money flow and growing asset base are the core building blocks of your ability to live your life fully. You do not want these to be flighty and wild.
Instead of chasing the latest 'get-rich-quick' scheme, trying to catch the next “hot thing” wave, keep it simple and consistent.
Build your assets by implementing a proven strategy that you follow consistently.
Invest in a straightforward portfolio of index trackers and make regular, consistent contributions to it.
Create a healthy wealthy money flow by implementing Wealth Pie that stabilises how your money flows through your life and ensures you have enough for now while you are catering for your mid term and long term financial wellbeing.
Wealthy Way of Being 2: Convert Cash to Assets
Successful people transform cash generated from their employment, trading and business activities into assets. Rather than getting caught up in chasing higher returns or constantly reinvesting in a business, the focus is on turning profits into secure and diversified investments. Think about it – if your business is generating cash but you never convert it into assets, you're missing out on long-term wealth creation. Don't fall into the trap of reinvesting every penny back into your business. Instead, allocate a portion of your cash flow to investments that will secure your financial future.
I am in a Mastermind with people who have extraordinary cash generating businesses but they have almost no profit because they just spend it all. First problem is they focus on the wrong metrics - the focus on the vanity metric of revenue and not profit and cashflow. The second problem is they have not cultivated the disciplined behaviour of taking money out of that business.
They say things like… “I'm investing in myself. I'm reinvesting in my business.” But that is just a devastating marketing line they have swallowed. They get cocky and believe their business will always throw off piles of cash and that just making more money is the path to freedom. But just making more and then spending it to make more is a crazy spin cycle of never enough that ensures they can never be free.
Instead celebrate the fact that you are able to bring money into your life - no matter how - be it through having a job or building a successful cash generating business - and cultivate the discipline to take a chunk of that cash and invest it in your borning is beautify freedom machine - a.k.a your investment portfolio.
Wealthy Way of Being 3: Diversify
Diversifying investments across various asset classes, geographic regions, different market sectors and currencies is crucial to managing risk. This principle acknowledges that unpredictable market changes can impact different sectors differently, making it essential to spread risk and maintain a stable financial base.
This is the proverbial - DO NOT HAVE ALL YOUR EGGS IN ONE BASKET.
Wealthy Way of Being 4: Create A Margin for Error
Life isn't fair. Life will not always be smooth sailing, and neither will your journey to financial freedom be.
Create a margin for error, a financial safety net that cushions us during turbulent times. Think of this as the shock absorbers on your sexy life vehicle.
Read this article on “Why You Must have An Emergency Fund”
Imagine having three months' worth of your basic living expenses stashed away - ready to support you is needed. It's a smart buffer that can be a lifesaver in moments of financial uncertainty.
A margin for error doesn't mean hoarding a huge pile of cash; it's about finding the right balance between security and growth.
Many people are so fearful about “what might happen” that they have way too much “sloppy” cash milling around and insurances all over the place - and not enough money working hard for them in the form of assets - the only thing that will actually give them long term safety.
And you also don't want to be walking on a financial knife edge. There's so many people that every cent they have is invested because they want all of their money working for them that when something comes along they have to rob their assets or worse - go into debt.
This is what happened to one of Warren Buffett’s Partners. Warren Buffett - co-founder of Berkshire Hathaway with Charlie Munger - is considered one of the most successful investors of all time, because of consistency and by being in the market for a long time. There was a third partner in Berkshire Hathaway when they first started out, and by all accounts he was equally smart and a great investor, but he was in a rush!
He wanted it quicker and so he took risks.
He took on huge margin accounts. What that means is that he borrowed money to invest even more. He was so confident in his abilities and that he knew what he was doing that he left himself no margin for error. In one of the big downturns in the nineties he had what is called a margin call. This is when the lender of the margin account calls back the loan. All he could do was sell all his Berkshire Hathaway shares to cover his debt. Warren Buffett bought him out at 40 cents a share and that was the end of his relationship with Berkshire Hathaway and significant wealth. If he had just been a little less arrogant, in little less of a rush, and had given himself a buffer to ride out that storm he would have had all he dreamed of and more… and that brings us to the next Way of being… stay humble.
Wealthy Way of Being 5: Stay Humble
Less hubris, more humility.
This has been one of the most profound lessons I have learned along my way to freedom and it is one of the most important behaviours I continue to cultivate and which I believe has enabled me to stay free.
Read this article to remind yourself why you have already “Won the Lottery”
It is so easy to get sucked into our own stories. When we start having a bit of success in investing, in business, in our career - in whatever pursuits we have - it is easy to believe it’s all because of US. Our smarts, our hard work, our perseverance.
We have drunk the kool-aid and believed … “If it is to be, it’s up to me”. Which is true. We have to initiate, take massive action, take full responsibility for our results and our lives… AND acknowledge that with all that – luck / serendipity / chance - whatever you want to call it - will play a huge part too.
Recognizing that luck plays a significant role in all our success prevents overconfidence and excessive risk-taking. We maintain a balanced perspective that acknowledges external factors beyond our control can and will influence the outcomes we get.
This also helps us stay grounded, real and grateful.
Wealthy Way of Being 6: Enough
Come back home to yourself regularly. Check in with your truth of what is truly your wealthy life to be lived and what your unique enough is. Keep walking along the beautiful path of your own enoughness, delighting in the fact that you get to do you.
Ask yourself - “Am I living my 'right-sized' life? The life that delights me. The life that aligns with my goals and values, or am I caught up in the never-ending pursuit of 'more'?
Enough is knowing we are already enough. It's about finding contentment with what we have while still working toward our financial goals.
Enough is about aligning your lifestyle with your definition of "enough." It's about avoiding the sirens of MORE driven by fear and greed.
Get clear on what a wealthy life is for you. Notice where you've been pulled away from yourself by fear and greed and choose to come back to your enough.
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Cultivate these wealthy ways of being and your wealthy life will expand and grow.
Big love
Ann
