Sticking to your own game is about understanding your relationship with money. For example, your preference might be high risk high reward.
In this scenario, you might favour single shares. Personally, single shares are not for me: Single shares
After being awful with personal finance, I had to change my ways. I had to force myself to go and learn about money.
That is what I am recommending you do. Get some financial literacy. And this will help you make educated financial decisions. You will be able to put a financial plan in-place for your future.
You can look for the tried and tested approach. The proven approach. In my opinion, long-term buy and hold is the best way to invest. It is the only way that works for me.
I have tried most of the get rich quick schemes and they don’t work. That was when I was a dark cloud and was chasing the pot at the end of the rainbow.
Disclaimer: I am not a Financial advisor and I am 100% not an expert. I have just learned the hard way: Learn the hard way. I have learned what suits me.
Investing coz your mate said …
I have been there and got the t-shirt. I have got a few of these t-shirts. And lost money by gambling on shares or investments I had no clue about.
About 10 years ago I gambled about £8000 on single shares. On companies I didn’t know anything about. I done zero research and it was a painful experience.
My poor investing caused me stress and anxiety. Learn from my mistakes and do some serious research before you gamble. Before you gamble your hard-earned money.
Why did I make mistake after mistake? I listened to my work mate. Or one of the lads down the pub. Lads similar to me who where looking to make quick money.
This happened recently in my local town. Everyone was putting money into the local mine: Betting on the mine
I knew a few people who put tens of thousands into a share they knew little or nothing about.
Many of my work mates had bought in at 20p. Sirius struggled for funding and eventually were taken over by Anglo American. They were bought out for 4p a share and massive amounts of money disappeared.
Don’t let this be you. Don’t invest coz your mate said.
Investing coz of FOMO …
I have got this t-shirt also. I even bought a house because of FOMO.
2 of my friends (twins) bought a house back in 2006. It was off-plan, and they were excited about making money.
Jealousy kicked in and with it, FOMO. As I was leaving the RAF with no job, I made the wise decision of buying a new house off-plan.
I paid £120,000 and would sell for at least £130,000 and make an easy £10,000. That was the plan. It never got valued above £120,000. And 15 years on, is still not valued above £120,000.
This has turned into a good investment as my investing strategy has changed. I am investing for cashflow. I am not selling anytime soon. And any capital appreciation will be a bonus.
In 10 years, the mortgage will be paid off. And tenants will have paid the mortgage off. This is one of the benefits of long-term buy and hold. Even a shitty investment (initially), can turn out to be a good investment.
But don’t invest coz of FOMO. The reasons for buying this house were wrong. And anything but educated.
I have no doubt this will be happening with Crypto assets. I nearly bought 1x BTC (Bitcoin) in August: Almost 1 BTC
As BTC is now around $50,000 for 1 coin, many people will have FOMO kicking in.
Don’t get me wrong, I would love to have got in early and bought 5 or even 10 BTC. But I didn’t as I didn’t know the asset class. I wasn’t willing to gamble.
BTC could well go above $100,000 for 1 coin or go right back down. It is a risky asset class. Don’t just buy because of FOMO.
I know a few people who believe in BTC and other crypto assets. Not only that, they understand it.
If you want to invest in BTC and other crypto assets, do it for the right reasons. Do some research. Don’t gamble because of FOMO.
Long term investor
This is where I am at. I am long-term buy and hold. If you are aware of Simon Zutshi and his excellent book, Property Magic, you will know his 5 golden rules of property investing. Number 4 of his 5 rules is: long-term buy and hold.
Over the last few years, I have been reading many books. Books written by successful investors and business men/women. This long-term buy and hold comes up time and time again.
I tried getting quick easy money. Single shares. Football bets. Lottery. And a few other failed attempts. All gambling with no strategy at all.
Now I am no expert. I am just saying it from experience and what I have learned.
With a little bit of financial literacy. I know what game suits me financially. I am too emotional for single shares. But that doesn’t mean I can’t invest in the stock market.
Index investing is what suits me. Don’t settle for less than 1% in high street banks. Look into index investing: index investing. Many experts feel that 7-8% is achievable if you track the markets.
My preference is long-term buy and hold. It will enable me to benefit from compound interest. I use this strategy with index investing and property.
Don’t worry too much about how I invest. My point is that you should do what is most beneficial to you.
Get some financial literacy.
Do some financial planning.
Suss out what your game is financially – what is your preferred strategy.
And stick to your own game.
P.S. if you are interested in index investing – leave a comment – and I will forward you some free information that will help you to understand the fundamentals …
Book of the week:
The Little book of common sense investing, by John Bogle. The book’s main theme is the positives of indexing (a way of tracking the market with a small slice of many companies). The intelligent investor will reduce the costs of financial intermediaries (the middle men). That is what common sense tells us and is what indexing is all about according to Bogle.
For a hard copy visit the excellent Imagined Things Bookshop: Imagined things.