It makes perfect sense to say that most investors spend the larger portion of their time and energy brainstorming investment opportunities and possible returns. But since there is more to them than investment success, let us look at the various habits of investors.
A handful of investors have Lady Luck on their side, enough to be successful, perhaps because they were born with silver spoons. Be as that may, a significant majority of them need to rely on hard work and consistency, hence the birth of successful investor habits.
There is no fortuitousness in the reality that some investors discover the triumph while others find it hard to reach their goals. To take a step into the shoes of a fruitful and successful investor or know the best way to inspire investments, one needs to start by thinking and acting like them. So, let’s talk about their habits, understand them, and know which best approach to use.
They’re Super Savers
A great deal of attention is paid to how much their investments earn. But the most important factors for these guys – the ones that determine their financial future – is how much and how often they save. Investors do not like splurging money in the name of living the high life and keeping up with reputations.
Rather than spending money on irrelevant things, they save them all up for one significant Series A round with some innovation-driven startup. That is why when you want to become an investor, they ask you to double down on your savings and think critically about investment opportunities.
The very best of them find ways to add to their savings automatically. Nowadays, it is a simple process via payroll deductions and regular scheduled online transfers.
Living On Less
It may sound like some hoax, but investors, especially the most successful ones, assume the minimalist lifestyle. They habitually delay gratification in order to live (way) below their means.
Well, the essence of such a lifestyle is to save money. Looking to become an investor? If you are aware from personal experience that you have what it takes to live on less when you need to, that means you have been able to lay an important piece of foundation to become a source of finance for early-stage companies.
Some of the many successful investors indulge themselves in demonstrating their capacity to live on less than they have to and still be content. These are among the number of people who stand a better chance at enjoying retirement, since they have deliberately been able to sever the emotional connection between how much money they spend and their levels of happiness. Not to try to paint a picture of the guy living in a treehouse or on a hammock, but investors are significantly economical.
Diversification Like It’s A Lifeline
Take it from us – if you want to be a successful investor, you need to learn not to put all your eggs in one basket. For a good number of regular persons and newbie investors, low-cost index funds and exchange-traded funds do make a lot of sense. They catch nearly all the fancies because they are broad-based and can provide instant diversity across a variety of sectors.
What’s more, if include the so-called bond funds, you can look to get some asset allocation. As gradually as you brush up on more facts and mediums, you can add other investments from other asset classes – well, that’s what most avid investors do.
They consider the geographic diversity of the investments, among other factors, importantly based on what they want to accomplish with their hard-earned money.
They’re Avid Researchers
How else will they be sure that an investment is viable? As you may already know, investors do not just bet their money on companies with no competition or the ones that just impress much with their pitches. Investors are an abandonment of studies, observations, and mongers of analysis that is available literally everywhere.
Before the pump funds into a business, they take time to experience the product or service and study the market. The better the understanding they have about the business, the more confident they feel to channel in an investment.
Fortunate investors have an accurate motive behind every stock buy or sell decision. And, this is not because they heard about from a TV analyst or a self-acclaimed expert in the subway pushing the stock as a good buy.
You may think that (nearly) all reported investments in the African startup ecosystem is finalized based on an impulse or vagary, not knowing that a closed deal is what follows months of talks and in-depth research. You will agree with us that no one wants to put money into something that will crumble in two weeks after.
The Donkey Years Matter
Investors are very patient people, and think long-term when it comes to investments. Well, humans make terrible decisions when they become emotional and get involved in short-term thinking. When it comes to investing, these concerned persons tend to be more patient and have their eyes set on the long-term.
For investors, this involves holding their horses for months and years – even a decade – and not just for hours or weeks. All the accomplished investors need to exercise patience to see their investments win. Upon leading or participating in rounds after making business calculations, they are ready to wait for as long as it takes for their plans to materialize.