What Is Investing?
Investing, in its simplest form, is the act of putting your money into companies or assets expecting it to grow. It’s like planting seeds and waiting for them to grow into fruitful trees – which takes years. While that may seem like magic, what the investor is “buying” is a long-term stream of cash flows. But should investing be “fun”? Well, I guess that depends on how you define fun.
Investing Can Be Fun
For some, the thrill of watching their investments grow can be exhilarating – especially when times are good and the market is going up. It’s feels like you’re making money without having to work at it. The idea of watching your nest egg grow while you sip a piña colada on a tropical beach sounds pretty enticing, so the financial media projects this image whenever they can.
Investing Risk Isn’t Always Fun
However, markets aren’t always rosy. While it may seem glamorous to jump into the stock market and get your share, or invest in the latest trendy asset, such as cryptocurrencies, without proper research and analysis, it can quickly turn into a rollercoaster ride of emotions. Those emotions will drive most casual, non-professional investors to buy at the top and sell at the bottom.
That is, by the way, the exact opposite of how money is made. You want to buy things low, when they’re cheap, and sell them at a higher price. Yes, that seems like a simple concept, but it isn’t easy to do. The data shows that most investors buy and sell at exactly the wrong time.
Financial Success Through Investing
So, while investing can certainly have its exciting moments, it’s not all about fun and games. By adopting a relaxed yet responsible attitude towards investing, you can cut down on the impulses to get in and out at the wrong time and increase your chances of achieving financial success and building wealth over time.
Like most things in personal finance, investing is a journey, not a sprint. So buckle up. Brace yourself for all aspects of the ride. Be intentional … and always keep your eyes on the destination – your goals and dreams.
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