7 Habits of Successful Investors

7 Habits of Successful Investors according to me are listed here for you. This may or may not suit you as we all live in our own time and space. Some of the points may be outright outrageous. Some are impractical. Some definitely not my cuppa, you may feel all these. What I am penning here is nothing new, it is old wine in a new bottle from the factory of Trackfinder Financial Services.

Then, if you read them in conjunction with all the points I mentioned, the whole narrative will make some sense. If “Habits Maketh a Man” then “Bad habits and influences can undo a well-to-do man”.

1. Believe in your Time and Ability.
Believing is everything. A deficiency of trust often leads to undervaluing your time and undermining your own ability. Financial goals are tied to time. You need “Time” to create wealth. This very fact gives you peace of mind. This space develops a belief in your ability to crack the code of wealth. No Time No Peace of Mind, No trustable Ability. There Jack and Jill go down the hill.

How can I Develop them?
Time is the key to unlocking everything. Plan all your Short, Medium & Long-term goals according to time. That planning will showcase your ability to understand the time you need. When the draft is ready, talk to an expert in wealth planning. If you want unbiased input, avoid relatives and friends.

2. Learning about Price and Value.
If inquisitiveness helps us learn, then wisdom helps us unlearn. Understanding the price of investment, you are making is as easy as eating Pani Puri. But the value of the same is like the chemical composition of the Rantac tablet.
One of the best poetic and musical explanations of the price and value can be found in the soulful song written and sung by Passenger – “Let Her Go”. I am not any different in missing values by focusing on price. I have learnt it the hard way. Now I take extreme caution in knowing the ‘silently’ inherent value of an investment amidst the ‘noisy’ price action.

How should I go about learning it?
I often apply the tripod method. It is Something in the Darkness, let me do some Trial and Error, and the third one is Skin in the Game. First, I search for something that is not in the limelight but has a potential value at a fair price. Then I decide an amount that I can lose without jeopardising my lifestyle by investing in a vehicle that moves in all three directions – the Bearish Market, the Bull Market and the Sideways Market. This gives me an idea about entry points and its accumulation stages. Once you start your investment, you are in the game. Now you will have more interest to dig deeper to know about the Funds and companies Ethics, EBITDA & Earning Power.

3. Planning Long and Short Term.
“If you don’t know where you are going, you’ll end up someplace else.” ― Yogi Berra said so. The long story of wealth is ‘There are no shortcuts.’ You have to walk the whole distance without flinching. The concept of FIRE – Financial Independence to Retire Early comes from Long- and Short-Term plans with clarity. The crucial part of this strategy is understanding the various rate of returns on amounts invested on a day with different time horizons.
An A-Fund for a short period produces X return and a B-Fund for a long period delivers 2X return. A common mistake is an unplanned financial journey. In this case, when you reach your destination, you will have far fewer resources than you really wanted to have. When you do not plan properly, you are inadvertently pushing your bright future into the darkness.

How do I plan my Financial Goals?
Pen down 3, 6, 12 months probable requirements coming up your way. Emergency Fund to be created at a war footing with ’Zero’ erosion possibilities.
Think and discuss with your beloved family regarding probable events coming up in the next 3, 5, & 10 years and allocate funds with the help of an advisor who understands and explains the risk associated with each basket to you in a laymen language.
Meet your Financial Advisor and use the Portfolio Review Utility in the months of April and October to understand the performance of underlying assets and GAP progress.

4. Having Quality People and an Advisor with you.
My average monthly running is 200km, that is why I want a car with the highest mileage.

Hey, and when did you buy this car? “About 3 years back.”
Why are the seats still covered with plastic? “The upholstery of the seats will get damaged.”

My friends and YouTubers are my wealth managers.
My parents always tell me to trust only Bank FDs and PF.
Intraday trading is what I want to learn to make a fortune from Stock Market.

By any chance, if you are in any of the categories above or closer to them in a any different way, then trust me you need counselling for a better future. Only a few lucky people get to know about Cancer at stages 1 & 2, the rest of them start Chemotherapy at the 3rd stage. A popular myth is I know about myself, my wealth and my happiness. If you do not have quality acquaintances and a wealth advisor, you are most likely to lose all of them in future.

How to get quality people around me?
😂🤣😂 yes that is the funniest thought as an adult, one can have. It is more or less like “How can I meet Elon Musk, Gal Gadot or Warren Buffett?” Prima face this is not possible, but if you are ’worth a cap on your head’ then that too is possible.

I have classified people around me into 3 categories.
1. Acquaintances (95%)
2. Family (4%)
3. Teachers & Mentors (1%).
Once you do this segregation, you need to use your own Pareto Principle matrix. In my case, this is how I stand tall with the help of all the amazing people around me.

At the end of the day, those who give you knowledge and wisdom and the ones who help you walk the distance with strength and still be valuable as a good human being, and those who bring the best professionalism and business acumen in you is all that matters.
Once you do this compartmentalization, you can do a cleansing job to get the crème de la crème list of those people who add something to your life. Change is only constant, remember this. You will have just one wealth manager who will be there for the next 3 generations, I believe.

5. Clarity on Need over Greed.
Greed is Good! How much is too much? That is the question. An overflowing wardrobe, changing electronic gadgets to keep pace with your friends, Investing in Penny Stocks, buying 2nd and 3rd property, and budging to societal pressure leads a fake lifestyle. All these are needs according to you, but they are greed due to the psychological imbalance and poor clarity.
When my friend asked me how I can change my way of thinking, my answer was simple. Never try to be the icing on the cake, be the cake itself, because no one remembers the taste of icing but the cake. Palate speaks the truth.

How do I overcome this greed factor?
To be honest, it is not an easy task. The foundation for this is by creating 90% confidence in your 10% knowledge. Learn to say No to things that are too fancy. Instead of instant gratification, just delay the spending by a week and see what happens. Delayed gratification is the need to win over greed. Change the subject, change it again until you have another opinion in your head. Talk to experts for their opinion on your decision.

6. Asset Allocation and Risk Management.
In my view, both the above financial terminologies are the ones most loosely used and under-practiced. Surprisingly the majority claim that they know what AA&RM is. Some of my investors went on to give me a lecture on their “All weather-proof winning strategy”.
In kilogram terms, rice, atta, chili powder, oil, salt, and water are not stored in equal quantities at home. Parliament is not just Home, Finance, Defence, and Foreign Ministries. Trees and plants bear fruits and flowers not just on one side. Likewise, you will be able to see the Asset Allocation and Risk Management in all places. Wherever you find it is mismanaged, you will find a catastrophe waiting to happen.
I have seen many implosions and explosions happening with investors who did not heed the advice of wealth management.
An imbalance in the broader debt-equity ratio often ends up with higher tax outflow. Fear of capital erosion forces investors to incline towards highly taxable guaranteed products. Most of these investments barely beat inflation and taxes paid by them. The LIC Policies, PF, FD, RD, Real Estate, Postal MIS and Senior Citizen Plans are all in the same basket. They are age-specific investment vehicles, not meant for all. Without expert’s advice, these could become duds in the future.

How will I know what suits me?
1. Spent some time in the kitchen with Mom or your partner to understand the grocery storage.
2. Find out about the Returns on Investments you have made so far and its Tax implication.
3. Ask yourself. Am I adequately protected against medical bills? Who will look after my beloved family in case I am no longer there?
4. Talk to experts and bring their attention to your overall growth and your expectations with time.
Simple steps you take will bring in superlative success in your wealth creation journey.

7. Staying Calm, Composed and Clever.
“Calmness is the Cradle of Power.” J Gilbert Holland. If you think Wealth is Power, then calmness is the womb of them. Mind you, attaining it is not happening in 9 months, it takes 9 years to see the result of your calm demeanor. Our impatience is the root cause of abysmal wealth creation. Stay away from instant gratification.
If the volatility and short-term negative returns shake up your emotions, then you should only do the investment part and stop analysing how the economy and stock markets are functioning. Staying composed is all about making peace with the temporary noise made by the clutters around us. Chant your favorite mantra.
Taking leverage of an opportunity that fell into your lap for a positive outcome is what all we need to be clever. When you are calm and composed, such openings will be very frequent. You need an advisor to hand hold you and take you to the right path.

How do I attain them?
Simple. You need to believe in yourself, your time and your space. Deficiency of trust in everything around can lead to a shattered life. What good it would do if life has no meaning in your own eyes.

After proof reading, Ms. Roma asked me. How are you planning to conclude this?
It is a huge task. I cannot inculcate a set of good habits in someone. Neither can I get rid of a bad habit in a person. Mindful Wealth Creation is an Acquired Trait. It would grow faster if it is aided by tenants of inherited wealth creation and preserving characteristics. Savvy investors have all the above 7 and more in them in the right quantity. If you find one or more is missing in you, that is the moment you need to walk the talk about prosperity with Team Trackfinder.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: