Five Traits of Successful Wealth Builders
Published on November 9, 2012
In a recent article for Forbes, by Nancy L. Anderson, CFP, the top five traits for successful wealth builders were revealed. Interestingly, these are five traits that we can all learn and use to help build our financial portfolios.
- Healthy Skepticism: “Skeptics have a “prove it” attitude so they require research behind any recommendations and then thoroughly vet any investment strategy. This helps them avoid improper investments in the first place and to stay committed to their strategy once they set it up. Since they have explored the downsides and anticipated the challenges, they aren’t surprised and don’t panic and sell at the wrong times. In order to emulate a skeptic, thoroughly explore the pros and cons of any financial decision. Ask what the other guy is getting out of it. Review several alternatives and negotiate fees where possible and review all the things that could possibly go wrong. In other words, pick up every rock and look under it.”
- Status and Self Worth not dependent on material things: “People who don’t depend on material things for their status are able to save significantly more. Focusing on material things for status can be very expensive.”
- Patience: “Investors who choose an investment strategy and have the patience to stick to it are often rewarded, whereas investors who panic sell at the wrong time and lose money. To develop the trait of patience in investing, consider writing down the purpose of each investment (such as long term growth) and your strategy (buy and hold) including possible downsides, then reviewing your notes before making any changes on any investment.”
- Humility: “Investors who are willing to get outside counsel are rewarded. Investors who get help are richer by almost 2% a year and are exposed to less risk than those who don’t use help according to a recent Hewitt Associates and Financial Engines study of 400,000 401(k) participants. Bottom line—get a second opinion on your financial decisions in financial planning, investing, tax, and estate planning. It could make you money and save your family from many future headaches.”
- Risk Taking: “Successful investors don’t shy away from risk to meet their goals; they understand it and use strategies to mitigate it. Risk is inherent in every investment and even a conservative investment such as a certificate of deposit at the bank has risk. Our diversified investor would need to make sure they never put themselves in a position to lose everything but instead spread their risk exposure to gain higher overall returns. Successful wealth builders use strategies to help them build wealth while mitigating risk—not backing away from it altogether. Work with a financial planner who specializes in investing and discuss the different types of risk your strategy is vulnerable to.”
As you can see, being a successful wealth builder doesn’t involve a special set of skills or a thorough understanding of investment strategies and knowledge. Rather, all you need is to put a few character traits into action. With the right execution, success may be right around the corner for you.
To read the article in full and gain more insight into how to perfect these traits, click here.Back to Blog