We’re almost halfway through 2019… and many of us have given up on the self-improvement goals we made at the start of the year.
But there’s one goal you can still achieve this year: Making yourself richer. Here are five (near) mid-year investment resolutions that will still make you wealthier through the last half of the year.
Resolution 1: Learn to love money
If you want to be richer, you need to like money. If you think having a lot of money makes you selfish or greedy, then you’ll probably never become rich. The less you like money, the less money you will likely have.
An aversion to money – whether conscious or unconscious – will stop you from getting rich. The biggest hurdle to becoming wealthy is that voice in your head saying money is bad.
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Ask yourself the following questions, to find out what you really think of money:
- Is money the “root of all evil?”
- Does making money take too much time and effort?
- If I want money too badly, will other people think I’m shallow?
- Is it bad to think money can buy happiness?
If you answer “yes” to any of these questions, your notions about money could be stopping you from getting rich. Wealthy people don’t think twice about money. They like it. They wouldn’t be rich if they didn’t.
So stop and consider your feelings about money. Getting more of it will be a lot easier, if you believe that “money is good.”
Resolution 2: Learn more about investing
There are a lot of ways your brain prevents you from being a successful investor.
A large number of books describe investment pitfalls, or cognitive biases, that can affect investment decisions.
These self-inflicted investment pitfalls include the status quo bias (feeling that “this time it’s different”), the confirmation bias (only paying attention to information that supports your viewpoint) and the Dunning-Kruger Effect(overestimating your knowledge). Bad and expensive investment decisions can stem from these cognitive biases.
Education is the best way to avoid these investment pitfalls.
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Resolution 3: Learn from other investors’ mistakes
Experience is a great teacher. But as an investor, learning the hard way can turn out to be a very expensive lesson. (I’ve certainly done my fair share of learning, as I wrote here, when I lost US$50 million of other people’s money.) Instead of learning from your own mistakes, look to generally successful investors who’ve made some mistakes already, and learn from them.
One legendary investor, who has made his share of mistakes, is Jim Rogers. He’s a guy worth paying attention to if you want to learn something about investing. Jim is a friend of Stansberry Pacific Research, and we’ve had the privilege of speaking with him a few times over the past few years. In our discussions, he’s shared invaluable investment insight.
We talked about the one thing you need to be successful… how to find investing opportunities… and how to protect yourself from the MAJOR threat to global markets.
Resolution 4: Sit down with your financial advisor
I firmly believe that most people can take care of their own investments and do not need a financial advisor. But if you have a financial advisor, you should schedule a meeting to ask a few questions. Most importantly, you should learn how they earn their money, if you don’t know already.
Specifically, figure out whether your financial advisor gets paid through commission, a flat annual fee, or charges an annual percentage based on the value of the assets she or he manages.
Then you need to weigh the fees you’ve paid in the past year against the services that you’ve received. Do you think your financial advisor’s services are worth the amount of money charged? If not, it’s time to re-evaluate the relationship.
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Resolution 5: Take stock of your winners and losers
Despite a cloud of gloom and uncertainty hanging over global markets, many of the world’s major stock markets have moved up. This means you might have some investments that have done well, too.
Now is a good time to evaluate your high performers. You might want to sell or trim your winners, if you see big returns or they’ve reached your target price. You should also ditch your winners if the fundamentals of the company have changed and the big gains are done. This will secure profits and give you cash to play with.
It’s also a good time to sell losers. This will help you dodge the return-killing demon of the value trap and avoid losing money to opportunity cost. And selling these poor performing investments frees up some cash for more promising opportunities.
Following these five resolutions will help you make better, more informed investment decisions. And possibly help you keep more of your money.