5 TIPS TO INVESTING YOUR MONEY - 10 YEARS OF RESULTS

Before we begin, I would like to share with you an overarching rule of thumb:

It’s imperative that you learn how to invest so that your money works for YOU

Too many people trade their time for money. A traditional 9-to-5 job or any other combination of hours traded in exchange for money is fine as long as it’s only PART of an overall financial strategy. What’s missing for so many people is the ability to make money while they sleep. This is where a well-structured passive investing strategy can have a major impact on your overall success.

How Do You Define Investing?

Many people think of investing as trading stocks, flipping real estate, and other strategies of “buy low, sell high.” While those strategies can work, it is equally important to focus on fundamentals and passive income.

Here are five tips that helped me over the past decade; now you can benefit:

1. We Can’t Be Good at Everything

Simply put, we can’t be good at everything, which is why it is important to specialize in what you understand.

You can apply this concept to any type of investment. Take real estate as an example. Do you want to invest in multifamily? Self-storage? Office and Retail? Do you want to fix and flip single-family homes?

Find one strategy to focus on and make it your specialty

As a general rule of thumb, I place 80% of my investment capital into what I understand and 20% into “experimental” investments that I’m still in the process of learning and mastering.  

2. Become a Learning Machine

Reading books, listening to podcasts, attending seminars, meeting with other successful investors and simply adding to my knowledge base and personal network has had a tremendous impact over the past 10 years.

Never be satisfied with what you know; your education should not stop after getting a degree or “graduating” from school. Continuing education (self-education) and mentorship can literally cut decades off the learning curve and will help you reach your goals much faster.

3. You Can’t Catch All Opportunities, But You Can Catch a Few

Not every investment you make will be a winner. There will be some that outperform your expectations, some that go as planned, and some that underperform. And yes, you will sometimes miss out on opportunities and occasionally lose money.

Even the best investors (Warren Buffett for example) talks about missing out on investing in Google and Amazon years ago.

When it comes to investing, many people fall prey to FOMO (fear of missing out). There have been investments I wish I had put more money into and some that I wish I had never made, and opportunities that I passed on that ended up being very profitable. Avoid the “shoulda, coulda, woulda” regret mentality. I have certainly been guilty of this way of thinking from time to time, but I found it to be more destructive to my success than anything else.  

4. Don’t Forget the Founding Principals

It’s easy to get so caught up in learning new things that you forget some of the foundational principals that got you to where you are today. Years ago, I received some advice from one of my mentors to “double down on what’s working”.

I invest for passive income (cash flow) primarily in real estate and that strategy has worked well for me. I have occasionally fallen for the “shiny object syndrome” and invested in assets I didn’t understand. I lost money in almost all of them, most of them were not tied to passive income, cash flow or real estate.

Making these mistakes can happen from time to time – I’m guilty of this myself – but don’t lose sight of what has worked for YOU thus far. This reminds me of part of Michael Jordan’s story. Though Jordan was hugely successful in the world of basketball, there was a time in his career that he lost sight of that and tried to transition into a professional baseball career instead...that didn’t pan out so well.

5. Don’t Wait Until Your “Golden Years” to Pursue Your Passions

Most people put off their goals until “retirement”. Time can be your best friend or your worst enemy. According to a fascinating study conducted by the Social Security Administrative office…

If you take 100 Americans and follow them through retirement…

·      1 will be wealthy

·      4 will be financially secure

·      5 will continue working because they have to, not because they want to

·      36 will be dead

·      54 will be dead broke and depending on the social security checks, relatives, friends and charity to maintain a minimum standard of living

If you have a goal, a dream, a passion, go for it now. At least in some form. For example, if your goal is to travel the world, and that’s not possible at the moment, at least go travel SOMEWHERE outside the US, even if it’s only for a couple of weeks. It’s never too early, but “someday” could be too late if you put it off. Don’t wait until your 60’s, 70’s, or 80’s to put your plan into action!

Final Thoughts

Focus on investing in things you enjoy and understand, learn as much as you can about them, double down on the strategies that have brought you success so far and pursue your passions as soon as possible, even if it’s in small doses.

To Your Success

Travis Watts