One of the things I have experienced in my life is growing and selling a business. Perhaps I will write about the business another day. It was a great adventure! But nonetheless, after selling the business, I suddenly had the fortunate responsibility of what I would do with the proceeds.
As somebody who was brought up in quite a spendthrift family - whereby nobody ever saved a dime and everybody lived paycheck-to-paycheck - my decision to invest wasn't very popular with those around me, but it worked out to be an amazing decision and I feel I have learnt a great deal about money, finance, economics and politics as a result. It has also changed the way I look at life and others in general, and I am a much more patient, considerate, thoughtful person. It is no coincidence that these are also some of the qualities that make you a better investor.
And there is no doubt in my mind that I would probably have missed the Bitcoin and crypto train entirely had it not been for my interest in economics... brought about by the responsibility of investing! It has been an educational journey with great rewards for those following it. But there was one thing I learnt about investing very quickly that applies to everybody:
You will make mistakes
Sometimes learning the hard way is learning the best way. When you lose money it stings! Like many of Earth's creatures we tend to avoid getting stung by the same bee twice. But sometimes everything is stinging! All the markets are going down. We can lose money no matter how careful we are. Even in cash. When you are at a loss, many voices will tell you to sell, GET OUT! RUN FOR THE HILLS! But in my experience selling at a loss is often the worst thing you can do! My own answer...
You must diversify
Everybody knows the saying "Don't keep all your eggs in one basket", right? There are a great many vehicles for your money that will see you achieve a return on your investment. Learning and understand new vehicles for your money is the best investment of your time, even if some of them fail. You only get better at spotting them, at understanding them, at estimating their value and likelihood of success. And you learn something else...
Trust your instincts
They're not always right, like when you were absolutely sure as hell that girl or guy had the hots for you and...yeah Ouch! But sometimes your instincts present you with a momentary euphoric flash of everything you've ever learnt and understood. All of a sudden something just "makes sense", and more often than not - you will be right - to some degree. Instincts are a great gift and you should learn to trust them when investing. That being said...
Don't go in head first
Timing is everything, and you're going to get it wrong. No, really... I mean this. The chances are you're going to get the timing wrong nearly every single time. Don't fight it. Embrace it. I prefer to see an investment decision as a commitment to enter gradually. Perhaps at intervals over a month or 3 months or a year. The biggest danger in buying is feeling you are late to the game and entering at the top of the market, with all guns blazing. Your balance goes down and your blood pressure goes up! Your ability to make a clear decision reduces and you sell everything, just before the market goes back up! D'oh! By taking a more relaxed approach to investing, we avoid this wild swing of emotions which is one of most investors downfalls.
Do some research
Sometimes it can be attractive to see a market explode upwards and want to jump onboard. You can almost certainly bet that others have their eyes on that movement too. It's too tempting. But your best weapon is your understanding and knowledge of why it is moving, compared to everybody else. Sometimes even a little bit of research can go a long way - it is not about knowing everything in-depth, just enough to give you the edge. Just a bit more than most. Armed with information, you can then make a decision about whether a market will continue higher. Only when you've made this decision should you be willing to join the party. Following a trend blindly falls into the realms of trading or perhaps just gambling, not investing.
Ideas are all around us
Some of the best investing decisions you can make are those that affect you and those around you directly. If they make a positive difference to your life, then they make the same difference to other people too. That is contageous. Bitcoin is a great example of this success formula, but outside of crypto, there are many day-to-day activities that will give you useful information on companies. You might have invested in Google when realised yourself and everybody else was using it to search, or Amazon when everybody was buying their products through them. You might go shopping and know all the coolest places to shop, or where everybody goes to eat or buys their takeaway nowadays. Are you up-to-date on games and technology? Who is selling the stuff that is catching on? Can you invest in them? Your own life is your best advantage. Use what you know, your own experiences, talk to your friends and family, your colleagues and employers. There are ideas everywhere. Use what you know. It is your best advantage.
I hope this is useful to someone, perhaps I will write further into detail if you like it. I'd be happy to hear your experiences.