The most important question to ask when considering any investment opportunity is, “How much money can I lose?” Being a successful investor requires patience and caution. Since I am not naturally wired with these faculties, I have to make a conscious effort to pause and ask myself these risk management questions:
Asking these questions gives me time to contemplate risk management tactics and helps get my emotions out of the way. Once I take care of the potential risk, then I can focus on the fun part—making money!
Most people who are new to investing are focused on the potential upside, chasing the latest hot opportunity. They are not inclined to think about what would happen if the best-case scenario doesn’t happen (and it rarely does). Every person has a different risk tolerance, but investors who employ prudent risk management strategies usually enjoy steady wealth growth and experience much less worry and stress.
Trading does not equate to investing. There are a lot of day-traders—people who trade in-and-out within few days by taking advantage of short-term market fluctuations. Very few short-term or day traders have acquired great wealth.
Investing, on the other hand, has a much longer time horizon and most asset classes—stocks, real estate, commodities—appreciate over a longer period of time. This is one more reason to research your investment choices very thoroughly and apply simple risk management approaches.
Furthermore, there are times when sitting tight/doing nothing is the best solution—don’t feel pressured to always buy or sell. It’s not the frequency of investing but rather the quality of your decisions over time that adds up to great wealth. Learn when to act and when to wait.
Read more on this topic next week.
To Your Health, Wealth and Happiness,
Millen has a way of opening up conversations that not only make you feel safe to talk about money, but her questions have been so profound that they have made immediate shifts in my mindset and my circumstances have changed almost immediately too, including more money showing up, but more importantly, more and more opportunities. I have found new and inspired direction, and am feeling a lot more peaceful and excited about life in general. Millen offers so much value and a solid advice! She is a big picture thinker and it is infectious! Thank you, Millen, from the bottom of my heart and the top of my soul.
Millen Livis is a gift to humanity. Millen is very generous with her time and energy, sharing her vast life experiences and strengths, empowering me to become a better human being. Millen has impacted my life spiritually, emotionally, physically and financially, by her encouragement and clarity. I have not said, “Thank you!” enough.
Millen brings together an interesting mix of feminine wisdom, clear logic, assertiveness and humility in all of her interactions. With her warmth, intelligence, diverse experience and passion for ‘Dare to be the best you could be’ message, she inspires other women to reach for the goals they set for themselves.
Using laser like energy, Millen gives her full attention to your issue and stays with it until a satisfactory resolution or conclusion is reached. Open minded, yet direct and honest, Millen balances objectivity with compassion. It is a joy to work with her!
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