A thought becomes action, and action repeated over time becomes a habit. Successful investors are really ordinary people who think a little differently. They just have different financial habits. Here are seven such habits, that can help you too to be a savvy investor.
#1. Save First
Unlike most, a successful investor knows the importance of saving first.
Instead of following
Income – expenses = savings,
the successful investor follows the equation of
Income – savings= expenses.
This means beginning with Saving First.
Set aside the amount you want to save first and then spend the remaining on expenses. Decide how much you want to save in advance, and then plan your expenses accordingly.
#2. Invest automatically
Life can easily get in the best of your good intentions of making. Thus, the second good habit is to automate . The best way to ensure happen automatically is to go through the route by setting an ECS for auto-debit from your savings bank account for a fixed amount, on a fixed date every month.
#3. Live Below Your Means
If successful investors would have spent every Rupee they earned, they wouldn’t have the money to set aside for financial goals.
To be a successful investor, you must spend less than you earn on an on-going basis. Spending too much, will more than likely make one accumulate debt, instead of wealth.
Smart investors have specific financial goals and invest intentionally. With specific goals, coming up with an investing strategy becomes easy, and effective.
#4. Invest regularly
Successful investors know how to NAV or market conditions. In fact, SIP enforces the discipline to invest each month, hence ensuring that you regularly and not try to time the market. Little by little, you will be able to generate wealth, over time.regularly. The best approach is via ), wherein you can a fixed sum regularly regardless of the
#5. Set aside an emergency fund
Like unexpected guests, emergencies too can come unannounced. It could something as trivial as a washing machine refusing to work, to something as serious as a sickness. Successful investors are always financially prepared for emergencies. They avoid debt for such situations. Keep six months of monthly expenses in a Liquid , to get better than savings back returns and ensure that your remains separate.
#6. Invest in a portfolio for each financial goal
Smart investors have specific financial goals and invest intentionally. With specific goals, coming up with an strategy becomes easy, and effective. Take for instance, a smart investor knows that buying a house after 8 years, as a financial goal will need a different strategy, as compared to coming up with college education fee for his son in a couple of years. While the former will be in equity focused MFs, the latter will be in debt focused instruments and MFs.
#7. Do not get swayed by extreme news to let emotions rule:
Hyper-successful investor Warren Buffett said many a times, “Be fearful when others are greedy, and greedy when others are fearful”. Fears of slow-down and recession make many investors let emotions swap their.
Successful investors never let news get the better of their emotions. They know that times like these are perhaps the best times to remain invested patiently for the long term, and to tide over the lull. They know historically, growth slowdowns reverse and corporate growth picks up.
Follow these habits to attain the samesuccess many others have to create their wealth.