Common Characteristics of Successful Private InvestorsTanmay Gadre
Many successful investors around the world follow different strategies to generate meaningful returns from their investments. But there are few similarities in things that they do.
Here, we speak of such characteristics commonly seen among private investors that turn them into successful individuals. Following are these habits:
- Future time perspective: We tend to see our experiences through a past, present, or future time perspective. Eg- People with a present-time perspective may want to earn a big salary now and spend it. Whereas, successful investors start investing early. They seek uncertain future gains from the compound interest on their capital. They take a calculated risk today for earning gains in the future. They inculcate the habit of viewing opportunities through a future time perspective.
- Investing for Freedom: Most successful investors can show off their money if they want to. But they instead choose to live a not-so-flashy life. Many investors start small and they earn money the slow way. They patiently build wealth by spending less and investing it over a long duration. They know that having more money than they need will result in freedom. Having more money frees up their time to use it for activities that they want to do.
- Avoid borrowing to invest: Using debt in volatile markets works until the market turns down. It may erase all the gains and the capital with it. One can lose more than one started if one uses borrowed money to invest. Successful investors invest their own money after conducting research and then wait patiently. They know that once invested; they should let the compound interest work for them. This is how they generate meaningful returns on their investments without borrowing money.
- Not team players: Investing requires one to not be part of the herd. Most successful investors are not team players when it comes to investing. They may take help from other people for research or may work with a team for a few activities. But when it comes to taking an investment decision, they understand that it’s to be done individually. There are many variables within investing which differ from person to person. Investment goal, time horizon, sector preferences, etc. This makes it a job to be done on one’s own.
- They enjoy investing: Successful investors can put the money in passive portfolios and use their time for doing something else. But they choose to be active in markets. Some do it because they believe that they can generate good returns using their skills. Some do it because they enjoy it. Many actively traded portfolio investors keep on working despite having more money than they will need.
Some of these characteristics are simply natural to an investor. But other characteristics can be learned over years. Even a novice investor with few months of experience in the market can read, observe and learn to benefit by inculcating these characteristics in oneself.
Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered investment advice or research recommendation. The users should rely on their research and analysis and should consult their investment advisors to determine the merit, risks, and suitability of the information provided.”