By: Andy Nyquist
I started tracking my net worth in February 2002, over 10 years ago — I’ve logged it every month since. I now have a net worth chart with 22 real data points in time.
I also have a seven year and running trading/investment diary. But, notice the 3 year gap…
Before I became an active investor, and long before I became an experienced self-taught technician and swing trader, I was a personal finance psycho. Don’t get me wrong I loved the idea of stocks and making money, but I also knew that I had to build the nest and start growing the egg before I could “work” the market and accumulate wealth. In short, I needed to lay the groundwork and get the ball rolling before I could worry about growth stocks, trend lines, and investment performance.
Too many people I talk to and mentor today are lost. They’re confused about their money situation and have all sorts of “omgs” and excuses. Some want an explanation and most want an easy way out… And what’s even more eye-opening is that many of these folks make good money, they just don’t “have” much money.
If I would have just bought Apple (AAPL) or if I could get in on an investment opportunity at the ground floor, all would be well…
Truth is, many of the folks saying this don’t even have the funds to buy Apple stock or make other investments, much less the experience to get in on them at the right price. It’s this “if only” attitude that takes away from their true ability to sit back and evaluate where they are at and make positive changes that can affect their future in a big way. Trust me, I wasn’t rockin’ technical S&P 500 charts 10 years ago…
So why don’t people change? Answer: Many are scared of the consistency it takes to get their household business in order. That’s right, business. And it’s because many aren’t treating it like a business that they’re losing out.
For those of you saying “I don’t think I make enough money,” let me say this: you don’t need to be rich to build and drive wealth. In fact, their are many folks “perceived” to have a lot of money that may be in more financial and psychological trouble than you can imagine. The inability to get it right usually tracks back to a lack of core values, the type that are developed in the nest building stage. Many also become attached to the lifestyle they “want” to live. The more out of whack that is in comparison to your “real” financial situation, the more debt and psychological disorder you accumulate. It’s like a stock chart, but going downward left to right. So, you need to be real. And you need to earn it.Key to Success
So how do you “earn” it?
- Live within your means.
- Understand your monthly cashflow. Find out how much you have after paying for the essentials. And no, designer jeans are not essentials. Especially if you are trying to get ahead.
- Save as much as you can; pay off debt and fill your savings/investing accounts. Be thrifty now, so you can rock the threads and wheels you want later.
- Track your progress, and push yourself. If you want to become a big-time investor, then understand this: you need money to invest. And the more money you accumulate, the more you’ll make when you hit your stride.
Be diligent, set goals, and believe in yourself. Remember that your household is like a business and that you are your business’s most valuable asset… Time to appreciate that asset.