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7 Steps to Become a Successful Investor


The steps to becoming a successful investor take more than a day. You need to learn the pros and cons of finances and understand your personality before you can become a successful investor.

To become a successful investor, you have to be patient because there are times that you make mistakes and fall into errors.

In this post, we will tell you 7 tips to become a successful investor. We will also tell you what to watch out for in your journey as an investor.

1. Starting as an investor

As they say, Rome is not built in a day, so is investing. To become a successful investor, you need to understand that investing is a process, it doesn’t happen once.

You need to brace yourself up for the long journey you are going. Start by knowing where your investment journey will end and map out your investment journey appropriately.

For instance, if you are thinking of retiring in 30 years and you are 45, you need to ask yourself some questions. “How much do I need to make this possible?

How do I make this happen?” When you provide answers to these questions, you will be able to make plans that are proportional to your investment goals.

2. Understand what works in the investment market

To become a successful investor, you need to read books and take some courses on investment which helps you to know current financial ideas.

People who developed theories like portfolio optimization, market efficiency were recognized for a good course.

You need to understand that investing combines both science(basics of finances) and art(qualitative factors).  Never neglect the scientific aspect of investment.

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Don’t worry if you are not too good at science, you can read books on investment. An example of these books is Stock For The Long Run authored by Jeremy Siegel.

This book explains complex financial ideas in simple ways making them easy to understand.

You will be able to map out what works for you when you understand how the market works. For instance, Warren Buffet is a very successful investor.

His investment rule is simple and summarized in this popular quote. “Never invest in a business you cannot understand.” This quote contributed to his success as an investor.

3. Know your investment strategy

Nobody knows and understands you and your situation the way you do. Hence, you are in the best position to do your investment. All you just need is a guide to put you through.

Recognize your personal traits that can help you or prevent you from being a successful investor. When these traits have been identified,  know how to manage them.

Tom Bailard, Ron Kaiser, and Larry Biehl who are fund managers came up with a helpful behavioural model that is useful for investors to know and understand who they are. The model divides investors based on two personality traits.

  1. Mode of action (cautious or impulsive)
  2. Confidence level (Optimistic or nervous)

Tom Bailard, Ron Kaiser, and Larry Biehl categorized investors into five groups based on the personality traits mentioned above.

Guardian: A guardian preserves wealth and is reluctant to take risk.

Celebrity: A celebrity jumps on  latest investment fads.

Individualist: An individualist is cautious and optimistic. He likes to take the ‘do it yourself’ approach.

Adventurer: An adventurer is unpredictable, entrepreneurial, and determined.

Straight arrow: A straight arrow shares the traits of all of the above.

Little wonder that an individualist or someone analytical and confident is prone to achieve the best investments results.

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However, if you recognize that your traits look like an adventurer, you can still be a successful investor if you change your strategy wisely.

In summary, no matter what group you are in, you should manage your resources wisely and strategically.

4. Recognize your friends and enemies

Be careful of fake friends who pretend to be for you. These kinds of people are unethical investment gurus whose core values may be different from yours.

As an investor, you should not forget that your competitors are large financial firms that are more resourceful. They also have access to information faster than you do.

Know that you are your potential worst enemy. You may be destroying or obstructing your own success depending on your strategies, personality, and circumstances.

A guardian that is jumping on the latest investment trends and seeking short-term gains is only working against their personality type.

As a guardian, because you love to preserve wealth and you are reluctant to take risks, you will be highly affected by huge losses that can come from high-risk investments.

Be truthful to yourself, recognize and manage factors that prevent you from being a successful investor or make you uncomfortable.

5. Recognize the right investing path

The investment path you choose should be determined by your personality, resources, and the level of knowledge you have. Most investors use one of the strategies below.

  1. Never put all your eggs in one basket.
  2. Put all your eggs in one basket but put an eye on your basket.

You can combine these strategies strategically.

Most successful investors learn in the process of investing in various low-risk investments. Successful investors gain more knowledge with time. They become more knowledgeable to take active decisions.

6. Stay in it for long

It may not sound interesting when you are asked to stick with the long term strategy. However, your chances of becoming a successful investor are high when you stay focused without allowing your feelings or fake friends to make you do otherwise.

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7. Be open to learning

It is not easy to predict the market but one sure thing is that the market is flexible. It is a gradual process to learn how to be a successful investor.

A successful investor has to stay on track for the long term. There are also times that you make mistakes. Acknowledge your mistakes early and learn from them.

There is no trick to being a successful investor, just know the pros and cons to it. You have learnt in this post 7 tips to become a successful investor. Make sure you put into work the things you have learnt in this article.

Share your comments about what you have learnt today in the comment section. Also, share this post with your friends so that they can know the tips to become a successful investor just as you have learnt.



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