Investing is a tricky subject and sometimes you might find yourself flustered. If you follow these steps you will develop an excellent mindset for investing.

Investing Mindset Steps

1. Trust your own judgment

2. Have a great team

3. Get the real facts

4. Have a game plan

5. Education

Trust your own Judgment

It’s great to listen to everyone and be open to all opinions but I believe the most important opinion when investing is your own. If you can’t trust yourself then who can you really trust? This may be a terrible thing to say but it’s a fact that in this world a lot of the advice from say, professionals or even close associates is going to be bunk. This is not to say you will not also get good advice but always ask yourself, “what is in it for this person?” Does the stock broker or real estate agent really care about your position or are they looking for commission? Their advice may not be right for you but they preach it because they are posed to receive something in return.

In any investment you need to be able to trust your judgment and have confidence. I am by no means a religious person but there is a passage in the Bible I believe in.

-”And the Word became flesh and dwelt among us, full of grace and truth”
(John 1:14-18)

If you decide you are going to become a great investor tell yourself that and chances are you will be. This goes for anything in life; if you wake up every morning, stare in the mirror and think, “I will never get a promotion at work”, or, “I can’t keep doing this…”, chances are you won’t get a promotion nor be able to keep going on the way you do. If you believe in yourself you will become a better investor.

Have a Great Team

Who you choose to surround yourself with really does reflect on you, whether you like it or not. Professionals that understand the assets that you are investing in are a must, but they also must understand the goal you have in mind. Your team is only valuable if you are all on the same page and working towards the same goal, whether this may be investing for capital gains, dividends or even cashflow from properties. Although it is important to have a good broker, agent or accountant, it also pays to surround yourself with positive and intelligent people on your team. Your team can be co-workers, businesses partners, even your family. If you are serious on becoming an investor it is vital that people on your team are not trying to stand in the way of your goals but supporting them.

Get the Hard Facts

When I’m investing in something I’m not throwing darts at a board - that is gambling. I try and gain as much knowledge and “real facts” as I can. This could be corporate reports of the company I am investing in, or the cashflow analysis of a piece of property. Due diligence is key on taking all emotion out of investing. Numbers and economic indicators speak much louder than “what ifs?” and “maybes”. Bypass all the guess work in investing and do your homework. When the average person buys a piece of property they may ask themselves the following questions:

“Does the backyard look nice?”
“How are the neighbors?”
“Do you think the price in the neighborhood might go up?”

As an investor you need to look deeper into every investment and ask more valid questions such as:

“Can i produce positive cashflow from this property?”
“What is the rent roll?”
“What kind of taxes are associated with this property?”
“What are the associated management costs?”
“At what price am I willing to negotiate?”

The more of this information you have, the better picture or idea you can make on how the investment will perform or how you can make the investment perform better.

Have a Game Plan

I don’t personally invest for the sake of investing. Before I pull the trigger on any kind of investment I need a “game plan”. Let’s look at what kinds of questions encompass a “game plan”:

“Do I have an exit plan for this investment?”
“At what Price do I want to sell for profit?”
“Do I want to hold it for cashflow?”
etc.

A lot of investors have an easy time picking great investments but have a hard time exiting them; this ends up eating all their profits. Always leave yourself an escape route when investing. If you always have some sort of “out”, you reduce risk and are more on top of how you want your investment to perform. Again take all emotion out of making your investment plan.

Education

You will never know everything but that does not mean that you can’t learn everything you can. When investing in any sort of asset learn as much as you can about it. The day you stop learning is the day that you begin to die. The more you invest, the better you will be at it and in the process expand your knowledge. Go to seminars, read books, get a qualified investing coach. If you invest your time in anything and don’t try and get better at it you will soon find out that you have been left behind quite quickly.

I think if you follow these steps you will invest with greater success.

Kelly Parks
http://www.wealthforinvestors.com