Monday, January 4, 2016

Do you have the patience to be wealthy? Success takes more than wishing

I’m always amazed at how busy the gym is at the beginning of a new year. I doubt this year will be an exception. The locker room will almost certainly be packed, but by mid February the crowd will be back to normal.

Everybody wants to be fit, healthy and wealthy, but attaining these goals takes a lot of effort and a little luck. As with almost every aspect of life, success doesn’t come just because you wish for it.
Except for rare occasions, you have to work for success and in most cases that means a lot of hard work and sacrifice

For example, you can’t simply wish to become a doctor. It’s an admirable goal to be sure, but it requires countless hours of schoolwork. And that means long nights at the library, exams that need to be passed and, of course, residency at a hospital with long hours and minimal salary.

Many other professions follow a comparable path, but at the end of the day success is not achieved just by wishing for it.

Goal setting is also a huge part of your financial journey through life. You don’t achieve financial independence just by wishing and hoping for it. Again, there are rare occasions when that could happen. You could win a lottery, get lucky at a casino or inherit a fortune from a rich uncle.

But those are not things you can count on. The vast majority of wealth is achieved by saving and investing on a regular basis. You have to follow a well thought out plan and basically stick with it regardless of circumstances.

My experience as an advisor leads me to believe that many investors act a little bit like those people that come to the gym and soon disappear.

Because they didn’t achieve their desired results, they either quit or change direction. I’m not a fitness expert, but I do know it’s difficult to change your physique in a short period of time. You shouldn’t expect financial success to happen overnight either.

In the financial world, many investors become impatient too easily. In the course of a lifetime they might get discouraged and either give up or change strategies far too often. This is an especially important point to keep in mind today.

I can’t tell you not to be disappointed if you look at your year-end values and realize that 2015 was a down year. But I will tell you not to be discouraged. A bump in the road doesn’t necessarily mean you need to change your strategy entirely.

Might some reviews and modifications be in order? Of course. But wholesale changes are often nothing more than an indication of impatience. Patience is a common trait of many successful investors I know. That and a good, firm grasp of your financial goals.

As we begin a New Year, I want to remind everyone that setting goals is important. But just setting them is the easy part. The journey to achieve your goals entails a lot of hard work and commitment.
One of the greatest dangers along the way is becoming impatient during trying times and making wholesale changes to your strategy.

I’ve often said that successful investors need to have an iron stomach. I’m saying it again.

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