Developing an Investor Mindset in 2023!

Investing can often be daunting without any prior knowledge of the landscape and the right guidance, which can be quite demoralising and deter you from setting up finances to reach your financial goals. For those willing to take their first steps towards investing in the new year but don’t know where to start, this guide will ease you into the process.?

So, what is investing?

Investing is when you place money into financial schemes, shares, real estate, or any commercial venture with the expectation of achieving profit. When done correctly, you can compound your wealth and grow your portfolio by adding your earned interest back into your principal balance.

Every day there are new opportunities for potential investors, but to be a successful investor, you need a little more than just a few ‘Googled suggestions.’ To sustainably invest over a long period of time, you require the right mindset, which is the key determining factor when embarking on your journey toward achieving your financial goals.

Here are a few tips on how to start thinking like an investor:

?Develop knowledge

When investing, it’s important to enhance your knowledge of the market if you want to dip your toes into it. As Warren Buffet says, “the best investment you can make is an investment in yourself. The more you learn, the more you earn.” Quite simply, learn the basics of stock investing not only to build confidence but understand the brevity of the market around you. Start by reading financial newsletters to understand better the functioning of a market, as well as books on investing to help you learn the market and business-related lingo.

This knowledge can be the important difference between success and mediocrity. Reading is an important habit to develop since it not only allows room for enlightenment through exposure to different perspectives and opinions but also exercises the mind. It can be key to developing critical thinking and how your behaviour should be as an investor.

Learn as much as possible about the market you wish to enter. Understand what your goals are for example – Are you interested in forex trading? Stocks? Real estate? If you are investing your money in something, devote enough time to learning the basics and different strategies to avoid wasting your money.

Keep daily tabs

This cannot be stressed enough, but it is essential to keep tabs on daily market news to feed yourself with recent findings and other new information. Good investors are often part of groups or forums and engage with like-minded individuals to interact with, in fruitful discussions about investing. Factual news and stories of investor journeys should be your template to follow.?

Here are some helpful apps for you to keep track of your finances and investments –?

• Mint –Mint is a free app that syncs many kinds of accounts: checking and savings, credit cards, loans, investments and bills. As far as the actual budgeting, Mint tracks your expenses and places them in budget categories. You can personalize these categories, which are unlimited.?
• Stock Rover – With Stock Rover you can access a wealth of data on market stocks and mutual funds as well as connect your investment accounts. Additionally, with Stock Rover you can also evaluate your investment portfolio with its plethora of analytical tools.
• Personal Capital Finance – Over 3 million people use this app to track their investments and finances! Besides the ability to gauge your net worth through your existing investments, this app allows you to create a savings plan and sync all your investments to credit cards and bank accounts and provides you with an option to download all your financial data while tracking key performing investments with easy-to-read graphs and charts.

Savings and budgeting

In the simplest words, a savings plan can help you create liquidity that can be accessed whenever the need occurs. We don’t advise investing until you have enough saved up to sustain yourself through a 3-month financially turbulent period.

Primarily, the most important factor is to be mindful of your income, spending habits, and budgeting practices. You can follow the 50/30/20 budgeting rule, which will enable you to spend 80% of your income on needs and wants, while the rest can be saved and used for investing. Saving is important but you can compound that through investing and have a passive income stream moving you closer to your financial dreams.?

Have a proper plan in place

When investing it’s imperative to lay out a plan for future growth depending on your investment objective, return expectation, and risk-taking ability. It’s important that before you aim to develop an investor’s mindset that you analyze your current finances and have diversification strategies in place to reach your goals and complete your objectives.

For example, if you invest while you’re currently behind on certain high-interest loans, this could spell financial catastrophe. So, the first objective should be gauging the financial responsibilities you have – housing bills, school loans, necessities like food and internet, etc. Secondarily, you can better understand what your monthly/yearly expenditure is and how much you can afford to invest without compromising your financial situation.

Befriend Losses

It’s not uncommon to face losses even if you’re a successful investor. Treat losses as part of the investment process because it’s impossible to win all the time. Conversely, you should have a big investing appetite. Consider your losses as an investment in your future decisions, which will inevitably make up for any errors you might make in the future.

Exude control and embody patience

When you manage your money with patience, you can better control your emotions, subsequently allowing you to be more efficient, regardless of market conditions. Before embarking on your investment journey, re-wire your mind to focus on the long run and be patient.

Remember that training your mind to think like an investor takes some time. It takes a considerable amount of effort to learn how to be a successful investor and is a continual process. So, be confident, keep patient, and stay focused to achieve success.

Drop us a line at [email protected] to learn how you can successfully begin your investment journey.