All investors are thrilled by the idea of becoming rich beyond their dreams. My dream included owning a cattle ranch in central southern Florida. I was almost there when the economic crash of 2008 raised its very ugly head. But dreams are worth having and it is even better when they become reality. If you are a business owner, you know the vagaries of the economy and how downturns and collapses wreak havoc with your current dreams. Managers and professionals are somewhat insulated to the wild swings of business ownerships but all of us in the workforce have our dreams. How to turn our dreams into reality is the goal.
Investing using compounding interest what Einstein supposedly called, “The eighth wonder of the modern world” and when the investor is encouraged to avoid using the capital portion of any investment and to reapply the dividends back into the growing principal. Let’s begin with the basic principles of successful investing.
If you are MBA you have earned the right to skip this step.
For the rest of us reading about investing is critical. Thanks to the internet you can view, read, and research various and even obscure techniques for achieving great wealth depending on your individual investing interests. Read Jesse Livermore’s classic book on his life as a famous Wall Street investor, Reminiscences of a Stock Operator. It will start you on your way toward mastery and is interesting reading.
If you have a family member who is in the investment business or is a business owner and successful, they are the first step, your first adolescent professors. Ask them for advice and books to read, go to work for them, be nice to them and you will be rewarded. But most of us without this advantageous step to investing greatness must rely on authors we believe are effective in their approaches to investing. Most are friendly and comfortable and happy to communicate with investors. I have directly communicated with three writers that are experts in the field of investing, Richard Krivo and Lance Beggs are two that meet my requirements for no nonsense, accurate concepts and the ability to present material to an educated audience. But be aware there are many snake oil salesmen in the field of investment advice.
During my time as a stock broker in Florida, there was nothing so entertaining as examining a company’s movement on a chart. With today’s internet, there are multiple stock services available, many for free. Alexander Elder, Lance Beggs, and Richard Krivo are worth investigating for chart training and will put you on the right track toward realizing an investing dream.
Those who trade based solely on the charts are using technical analysis and any wise investor must know the basics: support and resistance, double tops and bottoms, triangle and range patterns, trends etc.
Risk and Reward
This is a juicy category and risk will appeal to the more adventurous of us. Are you competitive? Do you like to win? If you answered yes, you will want to use more risk in your investing. With greater risk comes greater reward. Oil and gas investing is an exciting play for the investor with a wish for winning and unlimited gains. But Limited Partnerships can be risky while the rewards can be astonishing. One such limited partnership entered by a grandfather of a family member secured a block of New York City in the financial district. The upside of this investment was that after 100 years the skyscrapers built on this entire block reverted to the members of the limited partnership. Game set and match for the lucky family members.
Is there anything more exciting than checking on the position of one of your investments and finding that you have made a bundle while you were asleep or away on vacation. Jesse Livermore lived at a time when his individual investments could move the market but his greatest success came when the market collapsed in 1929. There is a sense of risk and reward in all investing and it is advisable to have some investments that are very risky to provide you with a sense of courage, challenge, and financial reward for your efforts.