Sounds like common sense, doesn't it? Know what you're buying before you buy. Yet this common sense seems to go out the window when it comes to investing. People spend more time researching their vacation or buying their stove, fridge, washer, dryer, than making wise choices with their investments. Why is that?
It's how you associate your feelings with your activities. It feels good planning your trip to a tropical paradise. You carefully lay out your plans traveling to and from your destination with a detailed itinerary all mapped out with the places you'll visit. You project yourself into this idyllic future and live the vacation in your mind with all its pleasures. And because it feels so good, you spend a lot of time on this activity.
Now it's time to choose an investment product. You're not feeling so good. There is resistance to this activity because of unfamiliarity and fear of making a wrong decision. So you give your money to the first person who sounds confident and knowledgeable and defer to their expert opinion. But wait a minute. This is so wrong. Thousands of people, dare I say millions, use this as their primary mode of selecting investments. Just look at the run on banks during RSP season. This is not choosing an investment. It's a cattle call.
You are the only person who knows what you need to buy. You need to make the right choices for your plan. The only person who has the most to lose or gain is you. So it's time for a little reframe. Go back to planning for your dream vacation. Feel good? Great. Keep that good feeling and know that you are on this vacation because of the lucrative investments you have made. Picture yourself doing careful research and hear yourself asking the broker clarifying questions, even if you don't know what those questions are right now because you will, are doing it, have done so. So there. The first step is done.
Turn investment research into a fun game. It's sort of like playing the board game Clue where you are the detective and investigating who did it where with what. Associate those pleasurable feelings to your sleuthing journey. You will find along the way that the people who offer investments know best how to make their product as appealing as possible. Of course. They believe their investment is the best. The question is: Is it a perfect match for you? It's a perfect match for someone but not all buys are the right buy.
You need to be a leader and know when to enter an investment and when to exit. Some important questions to consider are: "What is my exit strategy?" "What am I buying?" "Why am I buying?" "How do I know it's a good investment for me?" And back it up with research. Before you purchase any investment, ask yourself how you are getting out of the investment. What are the future ramifications to your taxes, income, lifestyle?
The key is to be proactive and continually learn. Then you sway the odds in your favor. Otherwise, a sad fate awaits those who are reactive, going from crisis to crisis, at the whim of other forces because this is the default position. Wise investors know what they are buying before they buy. They choose investments carefully to support their current and future lifestyle goals. They leave nothing to chance and neither should you. Know what you are buying... before you buy.
It's how you associate your feelings with your activities. It feels good planning your trip to a tropical paradise. You carefully lay out your plans traveling to and from your destination with a detailed itinerary all mapped out with the places you'll visit. You project yourself into this idyllic future and live the vacation in your mind with all its pleasures. And because it feels so good, you spend a lot of time on this activity.
Now it's time to choose an investment product. You're not feeling so good. There is resistance to this activity because of unfamiliarity and fear of making a wrong decision. So you give your money to the first person who sounds confident and knowledgeable and defer to their expert opinion. But wait a minute. This is so wrong. Thousands of people, dare I say millions, use this as their primary mode of selecting investments. Just look at the run on banks during RSP season. This is not choosing an investment. It's a cattle call.
You are the only person who knows what you need to buy. You need to make the right choices for your plan. The only person who has the most to lose or gain is you. So it's time for a little reframe. Go back to planning for your dream vacation. Feel good? Great. Keep that good feeling and know that you are on this vacation because of the lucrative investments you have made. Picture yourself doing careful research and hear yourself asking the broker clarifying questions, even if you don't know what those questions are right now because you will, are doing it, have done so. So there. The first step is done.
Turn investment research into a fun game. It's sort of like playing the board game Clue where you are the detective and investigating who did it where with what. Associate those pleasurable feelings to your sleuthing journey. You will find along the way that the people who offer investments know best how to make their product as appealing as possible. Of course. They believe their investment is the best. The question is: Is it a perfect match for you? It's a perfect match for someone but not all buys are the right buy.
You need to be a leader and know when to enter an investment and when to exit. Some important questions to consider are: "What is my exit strategy?" "What am I buying?" "Why am I buying?" "How do I know it's a good investment for me?" And back it up with research. Before you purchase any investment, ask yourself how you are getting out of the investment. What are the future ramifications to your taxes, income, lifestyle?
The key is to be proactive and continually learn. Then you sway the odds in your favor. Otherwise, a sad fate awaits those who are reactive, going from crisis to crisis, at the whim of other forces because this is the default position. Wise investors know what they are buying before they buy. They choose investments carefully to support their current and future lifestyle goals. They leave nothing to chance and neither should you. Know what you are buying... before you buy.
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