The wealthy do something well that the majority of the Middle Class do not do so well… they invest.
Investing is hard, scary, and complex. Many don’t know what to do, nor do many even know where to start.
However, it is an essential part to obtaining massive wealth. If you’re interested in having more money in your life, investing is likely to be a top priority for you (see the power of compound interest here).
So, to help you master this touchy subject, I asked a bunch of experts for some helpful investing advice.
Their responses follow.
J. Massey, Investor, Entrepreneur, Author, Speaker, Cash Flow Diary
The best investment advice I could ever give is to invest in real estate. But first you have to invest in yourself and gain the tools and knowledge that allow you to do so.
The very first thing I suggest to people ALWAYS is to invest in themselves. They don’t have to attend college to get the know-how to be a great real estate investor, but they do need to educate themselves through books, audio courses, video courses, workshops if they have the budget and by joining mentoring and mastermind groups. In short time they can change their lives… and that’s no joke. That’s not pie-in-the-sky thinking.
It’s called taking action. Then taking more action. It’s implementing what they learn at the Speed of Instruction™ and treating deadlines like it’s NOW O’clock. If they wait to implement what they learn, they can easily forget the steps. They can get fearful. Fear can stop them from investing in anything. Their negative inner thoughts can stop them, too. The best way to combat those thoughts and feelings – because that’s all they are; they are not real – is to educate themselves and then get out there and do that thing they learned.
In my world, it’s real estate investing, and why that’s a good space is because everyone always needs a place to live, work, play and lay. No matter what you do in life and in business – and even when we die because we’ll be taking up space somewhere – it’s a sure bet that you are doing it on a piece of real estate that owned by someone if not you and it’s something that brings cash flow to that owner (landlord). Why not BE the owner or landlord? And before anyone says they don’t have the money to do so, they need to learn more about my story. All I can say is they don’t need any.
Scott Stratton, CFP®, CFA, President of Good Life Wealth Management LLC
The best investment advice might also be one of the most challenging to follow and that is to “stick with the plan!” Over the past 15 years, I’ve seen some investors have great success in the market while others lost money and became very frustrated and discouraged. The difference wasn’t necessarily in their ability to choose which investments to buy, but in their willingness to hang on when the going got tough. The folks who sold their funds in 2009 took a big loss and are probably still under water. Those who held on made their money back and probably have a nice profit by now.
The key here is not in the investment selection but in the subsequent decisions and behavior. Having the fortitude to weather a bear market for a couple of years is essential for a long-term investor. I should add one caveat, which is that individual stocks can and do go to zero. Markets do not. And that’s why diversification is a prerequisite for anyone who is investing and not speculating.
Matt Rinkey, Founder and President of Illumination Wealth Management
My grandfather, who was a depression era child built a business over his lifetime sold it for a sizable nest egg when I was a child. Within 5 years, he lost the vast majority of his money during the junk bond craze of the late 1980’s. From that experience, he told me that no matter what amount of money you have (large or small), you always need to have an investment plan and be investing for a clear purpose. He lost sight of that and that cost my grandfather and grandmother dearly which had ripple effects throughout our entire family.
Griffin Dalrymple, CFP®, AIF® Founder and Chief Investment Officer of Opinicus Wealth Management
The best investment advice I’ve ever received was to ignore the crowd and focus on the cash flow.
I heeded that advice from a book as a teenager. My first big investment was at the age of 19, while entering my sophomore year of college. I purchased a beat up duplex, contrary to all friends & family’s advice, with excess scholarship funds and a cash advance from a credit card. I couldn’t ignore the substantial cash flow the property could produce if both sides were rented. In fact, the rental was profitable above all mortgage and maintenance costs if only one side was occupied. The rental property ended up funding my living expenses for the remaining three years of college.
The more you think outside the box, the more your peers will provide their cynical opinion. The best investors are those who are willing to allow their imagination to wonder and take calculated positions against the current.
Anthony Alfidi, CEO of Alfidi Capital
The best investment advice I’ve ever received is “pay yourself first,” and I’ve passed it on to others. Paying yourself first means committing as much of one’s gross income as possible to saving and investing before even thinking about purchasing anything that’s not essential.
It means living well within one’s means for years to attain financial independence as soon as possible. It means cutting out all luxuries early in one’s earning years to prepare for the ultimate luxury of earned wealth later in life. I have followed this advice myself and I achieved financial independence in 2009 at the age of 36.
M. Brendon Marks, Business Development, Hodges Capital Management
The best advice I’ve ever got in the investment business is to dollar cost average, invest a certain amount of your income every month and to invest in companies you understand.
- Real estate can be an amazing wealth-building vehicle.
- Investing in yourself will change your life… “no joke”.
- Fear is not real. The best way to squash fear is action, followed by more action!
- Develop a plan, and stick with it! The difference between investors over the long term are based on the person’s ability to persevere through the challenging times.
- You need to have a purpose for why you’re investing. This will help you keep the eye on the big picture, and avoid major mistakes.
- Ignore the crowd. Often times good investments are ones that the masses would be fearful of.
“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett
- Pay yourself first! It pays the best returns, and brings you much more happiness than ‘things’ will. Live below your means, and you can much more quickly achieve financial independence.
- Dollar cost averaging is simple investing strategy that can be a great long-term solution. (Dollar cost averaging is putting a fixed amount of money into funds/shares on a time schedule, regardless of the share price. This reduces the risk of putting a large amount of money in a stock at the wrong time, and reduces the impact of the volatility on your investments.)
- Invest in what you know. Don’t invest in what you don’t understand.
- Invest in yourself (mentoring, masterminds, training, books, etc.).
- Get a plan! This will limit the fear and emotional decisions that can derail your investment performance.
- Find an investment strategy and vehicle that matches your personality, goals, timeframe and skills.