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Understand the Psychology of Wealth
Unlike most people, the investor who is already wealthy does not need to make money. This changes everything from a psychological perspective including mental attitude and in the way money is seen and handled. The wealthy investor never experiences pressure to “make money" in the market.
The book 'Making Real Money - The Psychology of Wealth' helps us understand how we can 'switch on' and adjust our thinking to activate the right approach to wealth.
In the book titled 'The three simple fundamental rules of making real money' (register now and get the book), Trevor Hurst said “The job at hand is to identify with extreme simplicity, in a relaxed and unhurried manner, an entry point for a very low risk investment with maximum profit potential, ... and an exit point later on to take our profit”.
The wealthy investor or trader patiently looks for opportunities that carry little or no risk. That’s one reason why they’re wealthy. They rarely, if ever suffer losses. If bonds are cheap and bond yields are high, they buy bonds. When stocks are down and therefore cheaper and yields are attractive, they buy stocks. When the right real estate deal comes along, they buy.
Wealthy investors and traders are in no hurry. They can always afford to wait for the very best opportunities. If nothing outstanding can be identified, wealthy investors wait. They know what they’re looking for, and will happily wait months or years if necessary.
Sweating bullets...
In contrast, most people feel real pressure to make money fast. As a result, losses, anxiety and frustration are the most common experiences. This leads to more mistakes, more pressure and even more desperate moves. They try too hard, all too often led by the social pressure of the herd mentality which history clearly and consistently proves to be always totally wrong. Very often the “shiny object syndrome” kicks in, meaning they get into every ratbag scheme that comes along, many of which are outright scams.
When a trader or investor is driven primarily by the profit motive, when their primary goal is to make money, they will always lose money. Guaranteed. They’re ignoring Rule 1. (Register & get the book already!)
There is an old adage that says "Those who understand interest earn it, whilst those who don’t understand interest pay it."
Most people are always sweating bullets; how to make all the monthly payments and as a result they’re impatientand in a hurry to make it big. The one thing they don’t make time for is 'all this psychology of wealth mumbo-jumbo'. They don’t see the value of an investment of time to learn. It’s just another cost to them.
Take the time to learn.
The secret to Rule 3 - Understanding the Psychology of Wealth is...
Invest in yourself with further education on financial matters. This need not be expensive and the benefits always far outweigh the costs anyway.
All wealthy traders and investors continually attend courses, engage with mentors, read books and listen to and work with experts. They listen to as many other wealthy and successful people as possible.
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