If you haven’t read my previous post, check it out here!
Here we go…
When it comes to investing, no matter the strategy, the end goal is always the same: Your invested money should produce more money. Throughout the years, many strategies have been created and implemented by various investors to achieve these goals, some being more successful than others. All of the big name investors out there will all claim they have the best strategy, and they just might… but I believe strategy is relative. What worked for them might not work for you. (I’m talking about individual investments, not mutual funds, index funds, etc.)
Your mind, skill-set, knowledge and abilities are uniquely your own. No one can replicate the same outcomes as Warren Buffet, Ray Dalio, Donald Trump, or any other successful investor out there. They executed trades and made their investments at a unique time, at a unique price, at a unique volume, in a unique place. We cannot amass the same results as they did because only they seized the opportunity and took the risk at the exact time they did.
However, we may operate off the same or similar principles and philosophies as such investors in hopes of achieving similar outcomes, but we can never fully replicate their success. You should certainly read or listen to what these investors have to say and teach, as it can help your personal development as an investor, but just know, you should not chase after their success. You should create your own.
If you’re just starting out investing, you have to be teachable and always ready to learn. Not only that, but you have to be proactively learning and seeking out education from other people, online, books, speakers, etc. We live in the Information Age, not the Industrial Age. Times are changing and the world does not operate as it once did. There is so much technology that can empower you to achieve your dreams or information floating in cyberspace and hidden in books that can educate you. The point here is, you can invest! You can have your own strategy! And you can be successful at it! There is more opportunity than ever to educate yourself and increase your knowledge, you just have to be willing to learn and willing to do what it takes. Are you ready for that?
Now that my mini pump-up speech is over, here’s what you need to do to move forward:
Set Your Goals:
Obviously the main goal is to have your money work for you and bring in an ROI (Return on Investment). But this is where you need to answer the question, “What is investing to you?” This will greatly depend on what is at your core and why you’re investing.
Here’s what I mean:
1.) Are you investing for retirement? Saving and investing money over your life time for when you’re done working? What people usually buy: Mutual Funds, ETFs, Blue-Chip Stocks, Bonds, etc.
2.) Are you investing to make some money while in school or working another job? Executing buy low, sell high kind of trades? What people usually buy: Stocks with growing potential, undervalued stocks, stocks that have been beaten up a bit, etc.
3.) Are you investing to create a passive income stream? What people usually buy: High-Yield dividend stocks, various ‘income funds’, REITs (Real Estate Investment Trust), BDC (Business Development Company).
4.) Do you want to be a penny stock investor, speculating on the next big stock to spike? What people usually buy: stocks that are priced under $5 with some speculation or optimism of big news or economic factors that could produce a major ‘pop’ in the stock price. (Similar to #2)
5.) Do you want to make a career out of investing? Maybe being a full-time investor yourself or being an investor/advisor to others. What people usually do: study economics and investing or intern/learn from those already in the field. These people may usually tap into all of these categories of investing.
6.) Are you investing simply to learn and get some exposure to what it’s like and maybe get some first-hand experience? What people usually do: these people usually have a genuine interest about investing and start gravitating to one of the categories. No specific purchases
7.) Or do you just not have any clue what you’re doing and want to buy a stock? What people usually do: These types of people also have an interest in investing or they heard from someone that they can make some money off one particular stock. They may have also had an epiphany about a stock and immediately decide to jump in.
Which category do you identify with right now? Vote below and see what other readers are saying!
Whichever answer you chose will greatly affect your strategy and investment decisions, especially when it comes to what you invest in and how much you decide to invest over time. All of these categories have different time commitments and different goals at their core.
I can safely say that I have identified with most of these answers at one period of time. However, now that I’ve set some goals in my life and have thought deeply about what investing meant to me, I have a new long-term strategy.
Develop Your Strategy:
If you’re looking to get started and develop your strategy, you need to decide on your goals. You will need to take inventory and control of your current financial state, life vision, career path, and aspirations to develop your strategy. Investing is how you put your money to work for you. Every dollar is an employee and you need to make sure they’re not doing meaningless work, but rather effective work that will help support where you want to be in years to come.
On the topic of your money working for you, I recently read the book The Richest Man in Babylon by George S. Clason. This book tells an awesome story about the power of investing and really simplifies the core values behind it. I highly recommend reading it as it tells an entertaining yet educating story!
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Stay tuned with me as we continue to discuss various personal finance topics. Please comment and share! Feel free to discuss your investment endeavors and help others embark on theirs in the comments below!
Cheers & God Bless
DISCLAIMER: The opinions, analysis and statements presented in this article and on this site are solely my opinion (based on my own research), not affiliated with any past, present or future employment or business affiliation. This post contains affiliate links of the products that I recommend, which means if you purchase products through the link, I’ll receive a small commission. This helps support the blog and the time and effort put into it. Thank you for the support!!