What are the habits that investors must develop?
We may know many stories of people becoming very rich and poor in the market in the past. Now our main goal is to find how come only a few people grow rich and most of them become poor. If we clearly analyze those people who made their wealth through the stock market, we can see a common thread connecting all the people. All these ultra-rich people share a common habit which made them rich. Believe me, if we can copy those habits from them and follow in the investing journey we can to become as them. Interestingly, these habits are very simple habits but are very hard to develop.
Managing Money Is All About Developing Habits
Habits are a powerful force which we can have in order to achieve the things we want. Likewise, there are certain habits that investors must follow in order to achieve financial goals.
- Savings
There is no substitute for saving money. We cannot think of investing if we don’t have money and that’s why savings is important. We have to save our money and then invest those savings in markets. Savings are also useful during the emergency period.
- Strictly no borrowings
Taking more leverage is a huge drawback for investors. if we analyze those people who went bankrupt or went broke in the market, we can clearly see that the sole reason for their failure is by taking excessive leverage.
Real life story
There lived a lady for 106 years. She worked all day and night till she died. She was earning a modest salary by washing utensils in many houses. She lived happily all her life.
This story gets interesting when her children found that, she has saved Rs 10 crores in her bank account. Many raised their eyebrows and even questioned how she did it? When their children enquired about everything, they found that the old lady has been saving money for the last 70 years and there was not even one loan taken in her name.
Yes, we now got the secret sauce. Savings and no borrowings can make you rich even beyond you can think.
By developing strong savings and no borrowing mental habits, we can reach far beyond our imagination in both life and investing journey.
Many people think that, borrowing a small amount of money may not be a big problem, but remember one thing, if have savings habit and saved some money, you not need to borrow even small amount.
These habits may seem to be simple, but once we develop those habits and apply in our day to day life the reward that we get would be highly liberating.