Good habits make us more productive and effective.
When investing, it’s also advisable to inculcate healthy habits to ensure we enjoy a great long-term return.
Here are another four good habits taken from the best-selling book “The Winning Investment Habits of Warren Buffett and George Soros” by Mark Tier.
You can refer to the first four parts of this series here, here, here and here.
The successful investor is adept at keeping his ideas to himself and seldom tells anyone what he or she plans to buy.
There are practical reasons for doing so.
If you intend to invest a substantial sum in a company whose shares are thinly traded, letting others in on the idea may invite competition that will push the price of the shares up.
It’s also important to remain emotionally unaffected by what others think.
Some investment ideas and decisions may not involve well-known or popular companies.
Inexperienced investors may persuade you to reconsider your decision as these names are relatively unheard of.
By having confidence in your picks, you can safely ignore what others think and proceed to buy with conviction.
Successful investors learn to delegate trivial tasks to others so that they can focus on what they do best — investing and allocation of capital to the best ideas.
Remember that delegation means we are giving up control.
For instance, when we park money in a bank account, we implicitly trust that the bank can take care of our money.
However, the investor should always take responsibility for the consequences of this delegation.
If the bank fails, or if a wrong person has been trusted with the delegation, then the investor should admit this mistake and shift the delegation to someone more capable and trustworthy.
Successful investors live far below their means.
This lifestyle enables them to always have the capital to deploy into great investment ideas.
One of the most successful investors of our time, Warren Buffett, still lives in the same house he bought decades ago!
Being frugal and living simply allows you to accumulate valuable capital, which you can then deploy into great companies to kick-start the process of compounding.
The successful investor does not invest solely for money, but also stimulation and self-fulfilment.
If your sole purpose in investing is to make money, this goal may lead to reckless decisions as money ends up dominating your thoughts.
I have always encouraged the enjoyment and appreciation of the investment process.
Rather than seeing investing as a way to make money, you should also treat it as an intellectual exercise.
Not only can we learn more about the world around us (through reading and reflection), but we can also appreciate how businesses build up their brands, products and services.
Disclaimer: Royston Yang does not own any of the companies mentioned.
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