Up until the last decade, the traditional investment game had been an easy one to win for many people. The simple formula for achieving financial success was to spend less than you make and invest the rest. And if you started early enough, any investor could use the “magic of compound interest” to build wealth safely and consistently over time.
In a nutshell, the “magic of compound interest” is simply the process of putting away small amounts of money over a long period of time at conservative interest rates, and then the money automatically grows into a sizable fortune. The “magic” is in how a small amount of money can be mixed with persistence, discipline, and the awareness of simple mathematics to create something much larger than most people realize.
At the foundation of this traditional strategy for wealth was a secure job. A person’s job would allow that person to pay bills, buy a home, receive employer-sponsored health insurance coverage, and save extra money for retirement or investment purposes. In the past, an investor could also find respectable low-risk returns in real estate, stocks, bonds, and saving accounts. Then at age 65, people would begin receiving Social Security/Medicare benefits and cash payouts from their company-sponsored pension and retirement plans. By this time in a person’s life, many people would have also built sizable equity in their homes and assembled a large investment nest-egg with interest and principle to spend throughout their Golden Years.
Once people reached their retirement years, all they had to do was continue living within their means. This was a sound strategy for coming out ahead in terms of personal finances for the rest of one’s life, barring any major unforeseen financial, medical, or legal setbacks.
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“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”
Benjamin Graham
Understand The True Odds Of Winning: People are guaranteed to lose at any game that they don’t fully understand. Consistent winning is reserved for the few who make the disciplined effort to learn, adapt, and grow.
Today’s savvy independent investor must seek out a financial game with fair odds, good payouts, and a dynamic for which he or she can develop a sensible strategy to win. And while the stock market can be likened to a fair game with good payouts, it can be somewhat perplexing to a person trying to understand it in its entirety. You will discover that the Wall Street Craps approach focuses on a small specific segment of the general stock market and, therefore, manages to keep the game simple and easy for average investors to understand, play, and eventually master.
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“To the rash and impetuous stock player, my advice is: Forget Wall Street and take your mad money to Monte Carlo, Saratoga, Nassua, Santa Anita, or Baden-Baden. At least in those … surroundings when you lose, you’ll be able to say you had a great time doing it.”
Peter Lynch ~ Author of One Up On Wall Street
Develop The Character To Win: Successful investing over the long haul is heavily dependent on the investor possessing the higher character traits of patience, discipline, courage, decisiveness, and intelligence.
Today’s stock market investor must avoid the instinctive temptation to follow the destructive emotions of fear and greed, which automatically lead to a personal failure. If you’re seriously lacking in the areas of mental toughness and/or emotional balance, then today’s volatile stock market will be nearly impossible for you to trade successfully over time. Develop your character with the firm understanding that the level of your external success will always rise or fall to match the person that you are on the inside.
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Comment: My previous experience has been in the field of personal development as a trainer for motivational expert Tony Robbins and an instructor for Dale Carnegie & Associates. As a result, I have a strong bias when it comes to linking high character traits with success. While you may see external evidence of wealth that has been attained by unscrupulous people, it is important to realize that your objectives are wealth, success, and happiness – all rolled into one. And if that in mind it should become crystal clear that strong character is the foundation of all of these.
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“Good investment practices can almost be called studies in good character…The greatest investors are often outstanding human beings, insofar as they exemplify the highest achievement in one or more human characteristics like patience, diligence, perceptiveness, and common sense. Because remember: Dealing in money, the investor constantly must avoid his own instinctive temptation toward fear and greed. Fear and greed will ruin your investment returns.”
David and Tom Gardner
A Savvy Investing Take: The starting point of all success is thinking. When your consistent thoughts are mixed with the power of desire, the discipline of focus, and the wisdom of gratitude, they become the inner force that naturally guides you towards the fulfillment of your dreams.
Make sure that your mindset is properly in place with the wisest thoughts of success, wealth, and happiness before you put serious money in any type of investment. That way, you will be able to tell the subtle but critical difference between investment strategies that just sound good and those that actually are.
All of life is a game and investing is no exception. And like in any game, investing will separate the winners from the losers. The difference between the two outcomes is entirely determined by the way investors consistently think, feel, and play the game. Therefore, your goal is not to make the most money that you can in the present. Rather, it is to think, feel, and act at a consistently high level for the remainder of your investing life. When it comes to managing your money and investing intelligently, the quality of your internal process will ultimately determine the quality of your external results.
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“The gambling known as business looks with austere disfavor upon the business known as gambling.”
Ambrose Bierce ~ American writer (1842-1913)
This blog is dedicated to all the men and women who strive to be better investors so they can receive the benefits that come from ultimate financial freedom. And for many, this is something that they know deep inside is rightfully theirs.
May this blog provide you with the simple and powerful ideas to take you there.
I’m sure that your journey through this blog will stir up resistance from within. After all, you’ve been taught traditional methods that have been used by the masses for years. But on some level, you can sense that the investment environment is shifting and it’s time to adjust your approach.
This is a blog about trading and investing — savvy trading to take advantage of timely opportunities and wise investing for growth, income, and security. I’m not the only one to draw attention to this type of financial strategy — but I may be the first to introduce the valuable connection between “playing the market” and “playing casino craps.”
For those of you who are both ready and willing, this blog will reveal the ideas that you have been searching for in order to succeed in today’s hot and cold, high-risk/high-return stock market.
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“This is where we see people who pick up, not only the fact that they’re ready, but they’re really searching for the answer. A person could be searching in all outward appearance. They’re searching for an answer, but they’re not really searching. What they’re doing is searching and coming up against the wrong answer.”
David Neagle
The Hidden Secrets to Think And Grow Rich