How To Be An Investor With High Profit Potential So You Accumulate The Wealth You Need In The Time You Have
NOTE: This page is part of the Start Investing Guide. To go through the Guide in order, go here: Start Investing Guide
On its face, the definition of “investor” is pretty straightforward:
An investor is a person who commits money to an endeavor
with the expectation of profit.
I get it, investors use their money to make more money… and I’m all for it. As a matter of fact, investing is a key part of my plan to secure my financial future. But understanding the definition of investor does not really explain how to be an investor.
So, that is what I want to go over here: How to be an investor.
As with everything else on this site, this is not going to be “generic” information about how to be an investor. The information I’ll go over here is more geared to how to be an investor in the way I am personally doing it.
I recommend reading this page all the way through, and then using the Table Of Contents to visit specific sections and explore related information later.
Let’s get started…
Prioritize Your Future &
Don’t Eat The Marshmallow
The first step in how to be an investor is to prioritize your future financial well-being.
Investing is about thinking about the future compared to immediate gratification. As an investor, you’ll need to make sacrifices and take action now so your future self can enjoy the benefits later.
This reminds me of The Marshmallow Test. Have you heard about this?
You give a kid a marshmallow and tell them if they can wait 15 minutes without eating it… they will get a second marshmallow. Then you leave the room and see what happens.
Some kids wait and get a second marshmallow, and others eat the first one and don’t get a second one. Here is a video about what that may mean:
So, what does the marshmallow test have to do with how to be an investor?
Well, it has to do with immediate gratification versus delayed gratification.
If you want to be an investor, you need to prioritize your future financial health compared to the immediate gratification of spending the money immediately.
And this can be challenging. If you are getting a late start, you already know how difficult prioritizing making your future self happy is compared to being happy right now.
But if you want to enjoy lifelong financial security you are going to have to put your money to work to make more money. And if you are going to invest, you need to sacrifice now to benefit later.
The good news is, investing can achieve way more than just one more marshmallow.
Focus On Making Extra Money First
To be an investor you need to allocate money with the intention of making more money. But before you can allocate money… you need extra money in the first place.
How many people understand they should be investing… but don’t have the money to get started? If you spend all the money you make each month, or worse, spend more, you’ll never have any money left over to be an investor.
So people might be able to find this extra money to invest just by budgeting correctly. If you can find a way to live BELOW your means, you’ll have extra money. And you can use this extra money to invest.
Other people are not going to be so lucky. They need to do something more to increase their income so they have money left over.
If you’ve gone over my Wealth Plan, you know I believe the best option for generating EXTRA money you can use for investing is to start your own money making online business.
Even if you’ve never thought of starting an online business, you might find it a lot easier than you thought. After all, I’m sharing all my hard earned knowledge with you to make things way easier than they were for me.
Whichever road you decide to take, focus on living your life in a way where you have extra money left over… then become an investor to put that extra money to work.
Broaden Your Definition Of Investor
When a lot of people think of investors, they think of people that are wealthy already. If you are one of these people, you are going to have to broaden your definition of investor.
Remember, investors put their money into something with the expectation of generating a profit.
Technically, if you put money into a savings account, you are an investor. You are putting your money into a savings account and getting interest on your investment. (The interest you get with a savings account is pathetically small, but still, the idea is your money generates more money).
ANY time you put money into something with the intention of making more money you are an investor. You don’t need to buy an entire office building or full fund a start-up business to be an investor.
Just keep this in mind… investing is not just for the rich. Investing is for anyone who wants to accelerate their wealth accumulation by putting their money to work to make more money.
The 2 Biggest Reasons To Become An Investor
If you have been going through this Start Investing Course in order, you should already know the 2 biggest reasons to become an investor. So, this should serve as a review.
Reason 1: Beat Inflation
In the lesson on The Difference Between Saving And Investing we went over why investing is better than saving for reaching your long term financial goals.
When you are thinking about the future, it is not only about saving money now so you can use it in the future. But you need to beat inflation as well.
If you don’t beat inflation, your money loses value over time. Therefore, when you access your money in the future to use it… your money has less buying power than when you saved it.
So, the first big reason to invest is to beat inflation so your money maintains its value.
Reason 2: Accelerate Wealth Accumulation With Compound Interest
In the lesson on Compound Interest I showed you how compound interest can dramatically increase your wealth over time. I also showed you how to maximize the power of compound interest.
Compound interest is the investor’s best friend.
Therefore, the second big reason to invest is to take advantage of compound interest so you can have MORE money in the future.
If you can beat inflation AND produce gains you not only have money that doesn’t lose its value… but you’ll have more of it. And if you want to have a secure financial future, the more money you have in the future the better.
How To Be An Investor With Little Money
A lot of people that only have a little money to invest resist becoming an investor. They think, “It is such little money, what’s the point?”
And I get it.
Most of the investment opportunities out there get such an incredibly low rate of return, it hardly seems worth it.
If you are getting a late start, these low rates of return mean the little money you invest now won’t grow very big very fast. Even compound interest needs time to kick in.
And if you are getting a late start to begin with, you have a situation where you have both little money and little time.
But the silver lining is there is still something you can do to make up for little money and little time.
Firstly, you can get started investing with the little money you have, and then add to your account on a consistent basis into the future. (We went over how much this can supercharge your overall profits here: Compound Interest)
Secondly, you can look to invest in a way where you get rates of return that are greater than other investment opportunities.
Higher rates of return means your money grows faster, giving you the potential to accumulate the wealth you need in the time you have.
Take a look at just one of my accounts that started with only a small investment of $2,000…
My $2,000 investment grew to $57,893 in just 5 years. Compare that to the same $2,000 investment in the S&P 500 (the common benchmark for investors). Big difference, right?
You are definitely not going to get these types of returns putting your money into a savings account.
How To Be An Investor With High Profit Potential
I got a late start and didn’t have a lot of money to invest… so I focused on getting a higher rate of return compared to other investment opportunities.
You see, most investors use 6%-8% average annual return as their goal. And if you have 30-40 years, this can really add up.
But did you notice something?
I have the potential to accumulate more money in 5 years than I would have been able to generate in 40.
So, how to be an investor with extraordinary profit potential you ask?
And I know what you might be thinking. “Oh no, I don’t want to do that.”
That’s the exact reaction I got from my wife and god-children when I told them I was going to teach them to do what I do. Think rolling eyes, stamping feet and heavy sighs.
So, how did I turn them around and get them excited about becoming an investor in the Forex market?
First, I showed them how profitable it can be:
This chart shows the profit potential of the above account compared to a $2,000 investment in each of these stock powerhouses: S&P 500, Apple, Google, Netflix and Amazon.
Yes, you are seeing that right. More profits trading Forex over 5 years with 5 times LESS investment.
Second, I showed them how easy it is:
- I only trade 1 minute a day 5 times a week.
- My strategy is 100% rules based, so there is no guesswork.
Once they found out they could trade Forex without spending years learning about the markets or spending hours in front of the computer, they were interested.
And once they saw the tremendous profit potential for such little effort… they were hooked.
And you can learn the exact simple trading strategy I taught them…
Are you starting to see how you can be an investor with high profit potential so you can accumulate wealth faster and reach your financial goals in the time you have?
How To Be An Investor That Builds
The Wealth You Need In The Time You Have
Let’s wrap up how to be an investor…
If you want to be an investor with high profit potential so you can build the wealth you need in the time you have, just follow these 6 steps:
- Focus on making your future self happy
- Start making extra money
- Define yourself as an investor
- Start with the money you have as soon as possible
- Get extraordinary returns and beat other investment opportunities
- Stick with it until you achieve lifelong financial security
You see. This page was not some “generic” information on how to be an investor. I’ve literally explained what I am doing as an investor to secure my financial future.
My future self will be smiling. Will yours?
To Your Wealth,