www.wealthwithin.com.au
Continuing his money management series, Dale Gillham helps budding investors to learn from the mistakes of other traders, and create a structured plan for their investments – which means more money in the bank!
One of the reasons why many people don’t succeed in the share market is because there is so much information out there. For this reason it is no wonder that many investors don’t really know what is useful to them and what is not. With this in mind, anyone with little or no experience is likely to struggle to create a structured low risk approach to investing or trading that can be used with any confidence.
In this article, I would like to share why people fail and how you can start to create a structured plan for your investments, but before I do, there is something I need to share with you that everyone needs know. That is, 90 percent of traders/investors fail to succeed in generating the wealth they desire from the market.
Why is it that 90 percent fail when we have so much information at our fingertips, and how can you avoid becoming a statistic? The solution is really quite simple. Learn from the mistakes of other people rather than reinventing the wheel, and in doing so your path to success will be a lot shorter. To achieve success like the remaining 10 percent, you need to do what they do, and not follow in the footsteps of the other 90 percent of traders/investors. So how do you find out what they do?
You may be surprised to hear that to achieve this all one needs to do is take a look at many of the books and courses available and don’t do most of it, as this is where the 90 percent learn. Or you could find one person from the 10 percent and learn from them. So there you have it! Although this is an over simplistic view on the matter, there is a fair amount of truth in what I have just shared. In essence, I am saying that it is better to be a leader and not a follower, or you will end up with what everyone else has.
So why do 90 percent fail?
Lack of knowledge is the single biggest reason why most fail. People cheat themselves out of a good education because of a poverty mentality, or by convincing themselves that they can do it after reading a few books. In reality, this is the long hard and costly road that even some of most intelligent people have gone down.
Other reasons why they fail:
They are sucked in with expensive marketing strategies. “No knowledge, No experience and No time. No Problem, we will help you get rich quickly.” Yeah right!
They tend to complicate the process, because experts in the financial services industry often make investing in the share market seem complex and only for those who are wise and highly educated. In my opinion, this is not the case.
They take short cuts. It is a two to five year experience and I can honestly say that there is no substitute for effort and there are no short cuts to becoming a professional and competent investor/trader.
The 90 percent who fail are made up of three groups. The first are those who are blissfully ignorant to the fact that they actually need an education. The second group know they need an education, but do not want to commit the resources of time and money into obtaining the right education. Lastly, those who overestimate what they know (mainly men), and therefore mistakenly believe they already possess the knowledge. From experience, this last group is the largest and most dangerous of the three. Where do you fit in?
By comparison, those with the right knowledge understand the importance of having a plan, how to analyse a share, why they are buying or selling, and how to manage the process.
How do you become successful? The equation is really quite simple:
Knowledge + Experience + Effort = Success
I have never found a consistently profitable investor/trader who told me that they got there through luck. All followed three simple steps
1. Acquire the knowledge
2. Gain experience in the market
3. Make an effort
Next month, I will show you how to construct a trading plan to help you invest or trade in shares. The old saying, ‘knowledge is power’ is never more true than for building wealth in the share market. True to this, our team have created hundreds of free podcasts full of knowledge to help investors and traders. To find out more, visit the Wealth Within website at www.wealthwithin.com.au/education/trading-room/talking-wealth/
Dale Gillham is the director and founder of Wealth Within, an Australian-based company specialising in independent investment advice and share market education. He is also author of the book ‘How to Beat the Managed Funds by 20%’ and regularly holds seminars around Australia. Dale can be contacted at info@wealthwithin.com.au or you can visit the website www.wealthwithin.com.au
