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What if I told you that the best investing advice may have already been shared with the world? Would you lean in, suddenly interested to know what this advice is and why you haven’t heard it before? Would it put your mind to rest, knowing that there is a solution to a seemingly unpredictable way to build wealth? In the next several episodes, we are going to share investing wisdom from several of the industry legends. Most of these quotes are not new, in fact, they have been repeated over and over by many people, and have helped guide many investors. Today, you join their ranks. If you heed this advice, you are standing on the shoulders of many wise men and women who have used investing to build wealth. Here’s to your success, we think you’re Worth It!

Be fearful when others are greedy, and be greedy when others are fearful

Those words from Warren Buffett highlight a shift from our usual thinking and offer a challenge to anyone who is disciplined enough to follow them. In the investing world, there is often a “herd” mentality that leads investors to make hasty decisions, based only on how everyone around them is reacting to a stock market rise or fall. Warren counteracts that herd mentality with one simple statement. In essence, he is saying investors should be aware of what is happening around them and make clear decisions, regardless of the hysteria or hype.

Mastering your emotions is a critical part of investing

Warren Buffett has the keen ability to keep his emotions in check when he is investing or communicating investing strategies to clients and his employees. While a great way to build wealth, investing can also be a very emotional undertaking, and rightly so. Anytime you invest 60-90% of your wealth in anything, it’s going to create some anxiety about the security of that wealth. The key to long-term investing, as demonstrated by Mr. Buffett, is to minimize the level of emotion, as far as your money is concerned.

Work with an advisor, find a strategy and stick with it

You may not be your own best counsel, but you can convince yourself that a decision is good or bad better than anyone. This may present a problem when planning a long-term investment strategy. The good news is, there are financial advisors and financial planners who can help you understand all the nuances and help you find a strategy that works for you. They are your support system, your coach and your cheerleader for all of your investment goals. Working with an advisor can help remove some of the fear and uncertainty associated with your investment, allowing you to focus on more important things, like life goals, passions, and family.

Set an amount, then set it aside, repeat

Dustin R. Granger, CERTIFIED FINANCIAL PLANNER™ says dollar-cost averaging is a great way to start investing without a high level of emotion. For example, let’s say you want to increase your investment portfolio over the course of one year. You have researched a few stocks and plan to invest. Instead of waiting until you have, say $1000 dollars and investing all at once, dollar-cost averaging means that you would set a dollar amount each month, then only purchase that amount. If the stock you are purchasing is $10, a one-time purchase of $1000 would buy you 100 shares. If you set your monthly purchase amount to $100, then automate it, you don’t have to think about adjusting your investment drastically, regardless of what the market is doing. You invest $100, every month, like clockwork. During the course of that year, the share price may go down, meaning that $100 has more purchasing power. Other months the share price may rise, reducing your purchasing power. This is how dollar-cost averaging works. It is a great way to consistently invest without the emotion.

Outline of This Episode
  • [5:00] “Be fearful when others are greedy, and be greedy when others are fearful”
  • [6:30] The market is determined by expectations
  • [9:15] The only sale in the world where everyone ditches their merchandise
  • [12:30] Mastering your emotions is a critical part of investing
  • [15:30] Work with your advisor, find a strategy and stick with it
  • [17:30] How you can use a a foundation investment alongside a “mad money account”
  • [18:15] What is Dollar cost averaging?
  • [20:00] Toujours Worth software is ready for you tech savvy, DIY investors
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