The Perils Of Trying To Get Rich Quick

By Phil Wengier

Most people who loose money on the share market simply have not had sufficient experience to make money from it. Experience as I keep harping on is the key to everything.

The second most significant reason is that they do not have the discipline to develop an investment plan (and all the parts of it) and then implement that plan religiously and with discipline. The difference between an experienced and disciplined share investor and one who is not is simple. The money flows to the disciplined and experience investor. The other would be investor is funding the transaction.

Before you can place an order to buy shares, you should force yourself to make a plan, I??™ve written another article that talks extensively about what you should put in these plans. If you don??™t have a plan, don??™t place the order. Once the plan is in place, you practice investing. You see what happens and measure your profit all the time.

??? You see your result if you implement your plans in an undisciplined way

??? You see your result if you implement your plans in a disciplined way

??? You practice building up your discipline

??? You see your result improving

Then when you get to the real market with real money, the discipline habit is entrenched in your share investing repertoire.

Trying to get rich quick

Lots of people we speak to want to get rich quickly. To do this, they think the answer is in leveraged markets such as options, warrants, contracts for difference, futures. I??™ve seen the horror stories of people jumping into these markets boots and all. And what happens? What do you think? They are all losers. Not a single winner amongst them.

A much more sensible approach is first to learn how to trade or invest using a safe vehicle ??“ like blue chip shares and start making money steadily. Then, if that is not making enough money for you, use leverage and other markets to make more.

The harder thing to do is to learn how to make money in financial markets in the first place. Once having learnt this, it is an easier exercise to make more money.

The analogy is to first learn to drive the family wagon (Blue Chips). Then, if you want to drive faster, get into a sports car. Go all the way up to a formula one if you can handle it. But don??™t think that you can start with the formula one.

The other option that I??™ve seen people take is to try and make their fast fortune by buying speculative shares. This is not investing. This is simply speculation. Occasionally someone might get on a winner, but most often the result is the loss of money.

Doing this at your own peril is an understatement you should always have a strong share selection strategy. This is comprehensively covered in our Safe Investing Method?„?

We only advocate and you only invest in quality blue chip shares. But not just any old blue chip share. The shares you select have to be much better performers than the average blue chip and they need to have demonstrated a track record of significant growth before they are worthy of buying.

About the Author

Learn more about Successful Investing or download more information here. Phil Wengier has been successfully investing in financial markets for over 30 years and is the owner of several companies. In particular, Saratoga Pty Ltd has been on the Internet since 1996 helping many who wish to discover how to invest safely and successfully. Feel free to subscribe to my Savvy Investor newsletter here.

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Published at Aug, 03 '06 ; read 655 times;

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