Ideas on how to become rich - Financial Management - what the rich do in a down market, part 6

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Part 6

Hello and welcome. Here is part 6 from Sally Klaus' ideas on finance and financial management - what the rich do in a down market.


Use numbers to calm your mind and calm yourself

Investment success is attainable, but not guaranteed, no matter how well conceived the asset allocation plan. The odds of achieving wisdom and success can be enhanced and improved upon through practical thought and reflection. Along the way to achieving your investment goals, you need to pay attention to certain investment guidelines and principles intended to shape and sharpen your efforts.

Knowing yourself and coming to terms with such knowledge represent difficult but highly worthwhile investment goals. Warren Buffett has repeatedly advised investors to find and develop their own circle of competence and stay within it. Knowing yourself is also an ongoing process where you learn to discern the 5 physical senses and train your mind to process enormous amounts of information and filter all down to what is essential. Asset markets may change, technology may change, but the usual human response has tended to remain similar through the ages. If something does not feel right, let it pass. It is not wise to allocate assets and invest based purely on instinct and yet it is equally unwise to ignore your gut instincts when doing so.

Remember, it is not a real financial mistake if you really learn from it.


Don’t smother your own, personal, financial dreams

Being unaware of the financial risks you are taking is one of the quickest ways to find yourself on the road to financial perdition.

Never take comfort in crowds – if everyone is making investment losses, you may feel good that all are suffering together, but it is not the right thing to do. Do not follow others blindly because it is your money, your investments, your life. It is all about your dreams and not about others.

Chasing financial performance alone is not sufficient to determine whether that asset is good or bad. Sometimes we give up a good asset and later regret it because it is not performing. That wrong decision could cost lives and money.

Not using the correct investment advisor is another step to investment ruin. Learn to trust someone who is an investment expert and then ask around for good investment advice so that you can learn on the way to success.

Do not let emotions rule your financial decisions. Fear and greed are the two greatest emotions that lead to ruin in an investor’s life.

End of the sixth part of this “financial ideas” series

More financial advice, financial education, and money ideas to come in the next post. Special thanks and acknowledgements to Sally Klaus for her invaluable contributions and ideas on financial education. Thanks for reading and cheers!

Ideas on how to become rich!