15 Secrets I Learned from Successful & Happy Investors doing Goal Based Investing
Having interacted with many successful individual investors who have been able to increase their Networth manifold and at the same time are more content in life, I learned following Essential qualities & habits from them. My learnings are as follows:-
1) Chose to focus on the Goals and invest ONLY for the Goals. Goal based investing is a way of life i.e. Creating wealth with goals in mind , and is far superior approach than mindless profit based investing with only money as a goal..
2) Money is a medium and true Goals are Dreams. Money is just a tool to achieve Goal. Ex. Your GOAL is not to accumulate 50 Lac, it’s to give best education to Your child. “Chase Goals ...Money follows...”
3) They hire a competent financial planner. A good financial planner can transform your financial life.
4) Spend maximum time on asset allocation, diversification and don't waste time on market Trends and macroeconomic factors. Immediate events SHOULD NOT be influencing your financial plan for long term GOALS. Market Rewards you GENEROUSLY for NO ACTION and penalizes for REACTIVE Actions. Buy RIGHT and SIT TIGHT.
5) A good investor and his Planner both knows risk profile very well and invests according to risk profile. Any mismatch of investment to Risk profile proves costly.
6) Market throws opportunities both during rising period and during falling period. Lump sum helps during rising period and SIP/ STP the during falling periods.
7) They are always bullish on the long term potential of the market.
8) One cannot be a good investor without being a good learner. A good investor is always open to new ways of investing, new products that offers potential of wealth creation.
9) A good investor can control his emotions very well. THOSE investors who cannot control their emotions are ill suited to benefit from the investment process.
10) It is not the saving but investing, which is going to make us financially independent.
11) They have a purpose clearly defined and they have a higher purpose to achieve.
12) Don’t invest just to retire but to achieve a better life than what is now. THEY are not working for just accumulating more money; they are working for financial independence.
13) A good investor knows the potential of equities in wealth creation. Equity is risky only in short term and fixed income funds are in fact risky in long term if you solely depend on them to achieve goals.
14) It is not the selection of fund, selection of fund house, fund manager, it is the selection of asset allocation that will decide how fast and conveniently you reach your goals.
15) Focus on the things that are Controllable. Focus on Saving ratio, allocation and opportunities.
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