Which is the single most important trait that characterizes a DIY (do it yourself) investor?
1) I for Individuality
A person who rises above pigheadedness* and understands the steps necessary for wealth creation. However, once the basics are clear (asset allocation is all that is needed!), the person chooses a path defined by personal comfort and expertise.
Once a particular path/style (with a history of performance) is chosen, He/she does not care about what others do, or how others have done it.
It is unfortunate that for most people, volatility in returns is proportional to a vacillating temperament.
*Pigheadedness here refers to an obstinate love for fixed income products (FDs, endowment policies, ULIPS(?!) etc.) without recognizing the associated danger: investment disproportionate to returns.
How does one choose a ‘path defined by personal comfort and expertise?’
2) I for Introspection
Questions to be asked first: Where do I stand today? where do I need to go? What do I need for the journey? What route would work for me? How do I reach my destination with minimal fuss?
Questions to avoid: Which is the best investment? What did others do/buy?
Questions to be asked last: Where should I invest? What do I invest in to save tax?
- Personal Finance Essentials for Young Earners
- How to Conduct a Personal Financial Audit
- How to plan for long-term goals
- How to create your own financial plan
3) I for Inertia
Static (or bad) Inertia: When nothing moves
Someone who has trouble starting must recognize that personal finance is all about action and must act.
Dynamic (or good) Inertia: When it ain’t broke, don’t fix it.
Someone who is up and away towards their financial goals must not stop to worry about short-term market movements. If something is chuffing along nicely, let it.
4) I for Inclination
Perhaps should be number one in this list. Action should be fueled by the drive/inclination to change.
5) I for Information
Less is more: Inclination, Introspection and Dynamic Inertia thrive when the investor can distinguish between knowledge and information. A strong individuality helps in this regard.
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)