What are the habits of successful investors? You may think that there are big differences between successful and unsuccessful investors. In the book Atomic Habits, by James Clear, he identifies the small habits that lead to success in life, these habits apply to investors just like anyone else. We all have intentions of doing the right thing, but there is a big gap between intention and action. Only about half of our intentions turn into actions. Join us on this episode to find out what sets successful investors apart from the rest of us.
See the Full Show Notes Here:
Small Habits Make a Lifetime of Difference
- Successful investors bridge the knowledge and action gap. They understand delayed gratification. Successful investors realize that small changes compound over time. The difference between success and failure is that the cost of good habits is in the present and the cost of bad ones is in the future. If you can delay your gratification to the future it will benefit you greatly down the road. This is true for exercise, eating well, saving, and investing.Successful investors don’t let emotions derail their strategy. In fact, successful investors find a way to deal with the boredom when most people don’t because the greatest threat to success is not failure, but boredom.
- Successful investors minimize the valleys of disappointment. These are the times when you don’t feel like you’re going anywhere. It’s a hallmark of any compounding process: the most powerful outcomes are delayed. Most people know that delaying gratification is the wise approach and all of us want the benefits of good habits, but those benefits are seldom top-of-mind at the decisive moment. For successful investors, that’s not the case.
- Successful investors possess the ability to implement their intentions. When one says they are going to do something, it’s not a general idea. The successful investor creates a specific plan with an actionable timeframe.
- Successful investors know how to track their habits. We all know that life is a balancing act. It is hard enough to balance work and family life. If you throw in exercise and fun then investing can quickly take a backseat. Tracking your habits can allow you to recover quicker after a time of difficulty. A good investor can compare their investing with planting a tree. You don’t go out and check on your tree daily to look for growth. Simply set up a system for care and watch it grow over time.
- Successful investors practice self-control. Self-control can be challenging in times of uncertainty. Luckily there are plenty of ways to automate investing. Hiring a professional is another way to help you practice self-control. You don’t have to try and be an expert at everything, put your investments on autopilot or ask for help.
- Successful investors refine and reflect on their strategy. Small changes can greatly improve your success at investing. When you make small changes it makes you more aware of your mistakes and opens paths to improvement. Small improvements now can lead to major improvements in the future.
Are you ready to implement these habits for success?
Making small changes can really make the difference in your life. When you bridge the gap between your intentions and actions you begin to change your habits and start on a path to success. Implementing these strategies can help to make you a better investor and they can be applied to many other areas of your life as well. Listen to this episode of Financial Symmetry to hear how you can create successful habits as an investor and these can bleed over to other areas of your life.
Outline of This Episode
- [1:27] Half of all intentions actually turn into action
- [5:45] Understand delayed gratification
- [7:18] Minimize the valleys of disappointment
- [11:00] Implement intentions
- [13:14] Habit tracking
- [15:20] Controlling your self-control
- [19:11] Refine and reflect
- [21:57] A recap of the 6 habits
Resources & People Mentioned
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