It makes no difference whether the market is rising or falling if you are a true investor. A true investor performs admirably under any market conditions. In other words, your financial success is determined by you rather than by the market. Often, it is not market conditions that cause investor failure, but rather the failure of the investors themselves.
The difference between success and failure, or wealth and poverty, is entirely determined by your ability as an investor. It denotes the type of investor you are. A wise investor will make millions in the stock market, while an inexperienced investor will lose millions.
What Level of Investor Are You?
The five types of investors are listed below. However, if you are educated, work hard, and earn a good living, you may have traditional money beliefs. As a result, you will spend the rest of your life struggling financially. You will be one of the first two types of investors.
In contrast, if you don’t even have a college degree and are working hard. However, if you have a good financial mindset and think differently about money, you can become wealthy quickly. These are typically fourth and fifth-tier investors.
You pause for a moment to reflect. Decide what level of investor you are and be honest with yourself. You must be completely honest with yourself in order to begin your journey in the right direction.
First-Tier: Novice Investor
If your wealth form’s asset field is empty and there is nothing in it that is generating income from your investment, plus, you have a lot of obligations to meet. Furthermore, if you are deeply in debt, the best investment you can make right now is to get out of debt.
Remember, there’s nothing wrong with being in debt if you’re working to get out of it. The issue will arise when you do nothing to eliminate this debt. You are not the only person on the planet who is in debt. Numerous people become indebted for a variety of reasons. However, if they have the determination to get out of debt, it will undoubtedly take them many years. In this regard, the best education and action is to learn from your mistakes in a variety of ways and to accept responsibility for your mistakes. If you keep making the same mistakes that got you into debt and don’t learn from them, you’ll never be able to break free from the debt cycle and make progress.
You typically have little knowledge of money and investments at this level of investor. At this level, the most important investment is to get out of debt and begin investing in your financial education. Read books, go to lectures, become interested in business and economic news, and seek out coaches and teachers.
Second-Tier: Accumulating Investors
Since childhood, most people have been taught the wrong lesson. They’ve been taught that being financially responsible entails saving and accumulating money. You are a second-tier investor if you save money. As a money-saver, you must exercise extreme caution, especially if you are putting money aside in a bank or in a retirement plan. Those who save and accumulate money are usually the losers. Because saving is frequently a good strategy for people who do not wish to learn anything. Saving money does not require much financial intelligence, and anyone can easily learn how to do so.
Saving money comes with the risk of learning less. And if your savings run out or the value of your money falls, you are left with nothing, not even learning and education.
While savers enjoy earning a profit or interest on their money, real interest rates are typically in line with or below the true rate of inflation. As a result, amassing and saving money is primarily a loser’s game. If you are a saver, we recommend that you take some courses to learn the fundamentals of investing. Check out the stock market or real estate to see if you’re interested. If you are uninterested in anything, try to construct something.
Third-Tier: Amateur Investor
These are comparable to second-tier level investors. They take the risk, but they don’t realize it. They prefer to invest in stocks, bonds, mutual funds, and insurance funds.
Such an investment is preferable. However, these investors have no idea where or how to invest. As a result, they heed the advice of financial advisors who are merely salespeople for financial institutions. Amateur investors are financially uneducated and rely on others to advise them on where to invest their money. They are uninterested in investing in their own education in order to become better investors. They know very little about finances, which means they must rely on the advice of others.
The third level of investment risk is that if the economy fails, the investor will lose everything and learn nothing. Because almost everything an investor owns is a paper asset, and their advisors make decisions for them, they have no idea what went wrong and why.
If you’re ready to advance past the third level, invest in your financial education and begin managing your money. When you are ready to make your own investment decisions rather than relying on an advisor, you will have reached the fourth level of investor, which is a good level for you.
Fourth-Tier: Professional Investor
Few people devote time to money management. However, once you learn how to do it, you can call yourself a professional investor. The key to fourth-level success is to keep learning throughout one’s life. Such investors are looking for great teachers, coaches, and friends who share their values. Being a great teacher or coach does not imply that he or she is a higher-level investor, but rather anyone who can guide you. At this level, your attitude should always be that of a student. Professional investors frequently ask too many questions and seek too many answers. However, they decide things on their own.
Professional investors meet many tax advisors, lawyers, stockbrokers, and real estate agents to take advice from them. They are especially looking for investment advisors who make money instead of working as salespeople.
Employees with high incomes are frequently classified as professional investors. Such investors have complete control over their lives. They may also choose to resign from their position. They understand that their mistakes provide them with an opportunity to learn and grow. Fear of investing does not frighten them but rather challenges them. When you reach the fourth level of investment, you begin to see opportunities that others aren’t seeing. Your fear of failure has significantly decreased, and you are becoming more excited.
Being a fifth-level investor is equivalent to being on top of the world. Such investors can invest anywhere in the world. They have no boundaries in the world. The good news is that becoming a capitalist investor in today’s high-tech technology world is easier than ever.
Capitalist investors travel the world in search of problems and solutions. Investors who are good at problem-solving can profit from their investments indefinitely. They also have a solid academic and financial foundation, as well as the skills required to succeed as investors. They use these skills to solve the problems of others who lack them.
For example, if you are a very big real estate investor, think about the problems of people who become homeless or suffer from problems due to big real estate projects. You can set up a low-cost housing scheme for them while making a good profit.
Fifth-tier investors make a good living by investing, but they also help those who do not have access to such luxuries. They increase their wealth quickly and improve the lives of others by using other people’s money and accelerating it with crowdfunding and other investment incentives. If you’re at this level, keep learning, giving back to society, and moving forward. Remember that true capitalist are generous because a successful capitalist understands that you must give more to society in order to receive more from it.