Seven Habits of an Intelligent Investor

Investing is an art. An art that requires enormous patience, meticulous research, financial skills, and little common sense to achieve mastery. Though these investing skills are hard to achieve, it is not impossible. Everybody has a dream to achieve financial freedom – to possess enough savings, investments, and liquid cash to live their life on their own terms. Unfortunately, only a few can achieve it. 

Most people spend most of their lives shouldering the burden of increasing debt, busting emergency funds, reckless spending habits, and a number of other reasons that obstruct them from achieving their financial goals. In addition, a hurricane, earthquake, or a pandemic, can add fuel to the fire of financial instability in everyone’s lives. Today, the dire need to inculcate financial education and skills in every person is highly significant more than ever before. 

Let’s take a look at the seven habits that differentiates a successful investor from the rest of us. These 7 habits along with keeping you on the right path to become a successful financial wizard, also helps you to achieve financial freedom everyone longs for. 

1. A Definite Financial Lifestyle Plan 

Every successful investor leads a goal oriented financial lifestyle. He or she is very specific about their financial trajectory – be it the size of their bank account, setting up investment pools, and age levels they set for themselves for each investment achievement. They write down their specific financial goals, also known as financial goal sheets, and hone their skills to achieve them within the stipulated timelines. If you write down your goals – both financial and life goals – chances are higher that you can achieve it within a shorter time span.  

Along with establishing financial milestones in accordance with his or her age levels, a successful investor also meticulously maintains a budget and moreover, sticks to it. Budgeting is the foundation of a disciplined financial lifestyle. It guarantees the generation of savings, payment of bills, and better tracking of investments. It also acts as a disciplinary routine that keeps you focused on your financial goals and ward off any temptation to drift away.

2. Big NO to Wine and Women

“Avoid Liquor, Ladies, and Leverage”, warns Charlie Munger, an American billionaire investor, and a philanthropist. Alcohol, drugs, lust, and other addictions can put a deep hole in your pocket. These addictive ventures are powerful enough to distort your normal thinking patterns and steal you away from a financially disciplined life. Most of the successful investors keep overindulgence in wine, and women at bay. They focus all their energies on building up their wealth and achieving financial freedom. Leverage means funds borrowed at a higher interest rate or the money you can’t afford to lose. Investing with leveraged funds also brings heavy damage to your financial wellbeing.  

3. Priority to Fitness 

A successful investor knows that a healthy body is the temple of a healthy mind. Similar to the proper maintenance of your investment pools, your body also requires healthy maintenance. A successful investor always follows a strict, regular fitness routine and a nutritious diet to keep both their physical and mental health on track.  

Investment in good health can save you from frequent visits to the physician. Regular exercise and healthier diets can prevent or eliminate various health issues that come along with changes in lifestyle. Ailments like obesity and diabetes can increase the premium payments on your health insurance. Poor health can also force you to retire early with lower monthly income.

4. Frugal Lifestyle 

Frugality doesn’t mean misery or poor standard of living. Every successful investor possesses a frugal mindset: they think before they spend. They also take greater caution to live below their means. An intelligent investor knows that spending more than they earn leads to debts and living below their means can build up savings and leave them with more money to invest. Most of the successful investors you see today mastered a frugal lifestyle by developing a habit of living below their means before they rose to affluence.

Budgeting helps to develop a minimalist lifestyle to greater lengths. A disciplined budgeting can help every investor to make little financial adjustments that can help them to distinguish between the things they really need and the things they simply ‘want’ to satisfy their temptation to spend money. 

5. Strive for Mastery 

Investing is an art that requires constant practice. Without investing you can never grow your money. Every successful investor knows this truth and works hard to hone their investing skills day in and day out. Though the magic of compounding will help every knowledgeable investor to grow their savings exponentially over time, they would spend endless time on research and wait with patience to let their investments achieve meaningful growth. 

Never embark on your investment journey thinking that you can be a legendary stock picker like Warren Buffer or Charlie Munger in a matter of months or years. They had their own share of drawdown periods. They had their own share of spending endless hours studying their investments. Tons of patience and perseverance had gone into the investment success they are enjoying now.

6. A Deep Love for Information and Knowledge 

In today's Information Age, only an investor with genuine information and deeper knowledge thrives in the game of investing. Amid endless flow of information and data, sticking to a single investment strategy or an obsolete investment plan can bring ruin to every investment portfolio. A successful investor is aware of this, and he or she relentlessly updates their knowledge regarding the newer investment avenues, amendments in tax laws, or changing interest rates. 

A successful investor never fails to keep up with frequently flowing financial news and latest developments in the investment arenas like the stock market. He or she never hesitates to adjust their portfolio accordingly. In reality, lesser knowledgeable investors turn as cash cows for highly knowledgeable and sophisticated investors in every investment sphere that exists on our planet. A well updated information and knowledge base can guard every investor from falling prey to other highly sophisticated investors equipped with better updated information and knowledge.

7. Always Go For A Professional Financial Guidance 

An intelligent investor never shies away from taking professional financial guidance from a financial advisory firm or a financial advisor. They also take up courses on investments to hone their investing skills and never hesitate to clear their doubts from reliable sources. 

You can also open an online brokerage account or sign up with a financial advisory firm that opens doors towards new age investment avenues like Lease Investing. All these platforms ease your learning process, help you to create a manageable portfolio, and automate weekly or monthly contributions towards your investment pools.