Wealth creation is an activity that you will have to undertake if you want to have financial stability and independence. It involves a series of well thought out actions which requires a lot of patience, discipline, persistence and strategy.
Out of this patience is one of the most crucial elements that unfortunately most people do not give importance to. They expect that wealth can be built overnight. However, this expectation is far from the reality.
We have seen many people commit major blunders with their investments due to a lack of patience. They become uncomfortable with the pace at which their wealth gets accumulated and take many decisions that ultimately hurt their wealth creation journey.
In this article we will talk about why having patience is very important for creating wealth, the dangers of becoming impatient and the strategies that you can take to stay on course in your wealth creation journey. These strategies will help you to understand how you can be patient and you will be able to apply them to achieve financial success.
What is Patience?
Patience is the human ability to remain calm and composed even when the times or the situations are difficult. Having patience gives you the capacity to withstand delay, disappointment or even frustration without feeling agitated. Patience helps us to communicate better, take informed decisions and also create long lasting relationships.
Patients in Wealth Creation
Many successful investors have mentioned that patience is an essential ingredient for becoming successful in wealth creation. Warren Buffett, one of the most successful investors in history once famously said that “The stock market is a device for transferring money from the impatient to the patient.”
Warren Buffett has repeatedly attributed his success to having patience with respect to his investments. He invested in the shares of Coca Cola in 1988 and still holding on to them. In fact, it constitutes the biggest holding of his company Berkshire Hathaway at present and has yielded tremendous profits for him over the years.
Having patience with your investments will give you the following benefits:
· It will save you from making impulsive decisions whenever the markets go up and down in the short term. This way you will not falling into the trap of buying and selling stocks based on daily or weekly movement in stock prices.
· It will enable you to take informed investment decisions based on research and analysis rather than emotions.
· Wealth creation is all about delayed gratification, which means that you are investing today to reach profits sometime in the future. The more you can wait the better will be your returns. Having patience will get you used to this concept of delayed gratification, and you will be able to expect better returns.
Strategies for Practicing Patience in Wealth Creation
Having patience is important in wealth creation but unfortunately it does not come naturally to most people. If you are one of them then there are some strategies that will help you to develop patience:
- Have a long-term perspective: When you invest you should focus on your long-term goals rather than short term returns. Hence you must set realistic financial goals and develop a plan to achieve them over time. Focusing on the long term we will help you avoid making impulsive decisions based on the short-term market movement.
- First research and then decide: Before deciding to invest in any asset you need to do a thorough research to understand the future outlook of the asset. Consider the risks and benefits of each investment decision and then understand whether it aligns with your long-term financial goals or not. This approach will help you avoid impulsive decisions and save you from incurring unnecessary losses.
- Stay away from the attraction of short-term profits: Investors or traders without any patience often fall prey to rumors and hypes in the market. They get tips about which stocks are going to perform well in the future, make investments and then incur unnecessary losses. Those with patience understand that this is extremely dangerous and stay away from the greed of meeting quick profits.
- Diversify your portfolio: You need to decide on an asset allocation before you make even your first investment. If you are already having a portfolio, then ensure that the money is spread across different asset classes. Each asset class has its own characteristic and price movements and will give you returns at different points of time if you are patient.
- Educate yourself continuously: To build wealth you need to continuously study the markets and enhance your investment skills. Learn to control your emotions and know how to face adversities. Continuous education can give you a broader perspective of the investment scenario and make you more patient and resolute.
- Seek professional advice: Professional investment advisors have years of experience in handling the portfolio of clients and they also have the required qualifications needed to guide you through your wealth creation journey. They can give you good advice regarding what to buy, went to buy and also when to sell your investments based on your long-term investment goals and risk appetite. They can also help you to stay grounded when you feel impatient by giving you the correct advice. We strongly recommend that you get in touch with a financial advisor to help you achieve financial success.
Some Final Words
As you can see, being impulsive or impatient with your investments can have serious consequences on your financial health. Instead of creating wealth you may actually end up eroding it. Hence you need to develop patience when it comes to investing and focus on your long-term goals instead of the short term. So be patient, keep your emotions at away, and watch your wealth grow steadily.
Happy Investing!
This article is for education purpose only. Kindly consult with your financial advisor before doing any kind of investment.
