Qualities of a Successful Investor
When people think of the qualities of a successful investor, there is a very specific mental image that comes to mind. We can blame pop culture or even the stereotype’s predominance in the real world, but the list of qualities that people think of consist of:
- Already wealthy before becoming an investor
- At least 60 years of age
- Male
As an investor myself, I have gone ahead and looked at the people that I meet on a daily basis and there is some basis to the stereotype. When it comes to a successful investor, the ones that I meet regularly tend to possess most or all of the qualities listed above.
The Good News About Qualities of a Successful Investor
Hold it, don’t abandon your dreams of financial freedom and wealth just yet. Even if you don’t possess any of the above qualities, you will be glad to know that I still met a lot of brilliant and successful investors that don’t fit the mold. And I’ve met them in enough amounts to conclude that there is nothing about pre-existing wealth, age, or gender that serves as a hindrance when it comes to being an investor. It helps if we analyze the stereotypical qualities of a successful investor.
They Have Pre-Existing Wealth
You might be surprised to know that statistically speaking, only less than half of successful investors started out with pre-existing wealth. And even less makemore than $125,000 per year. The rest weren’t made men when they started, and a huge chunk of them make $75,000 or less per year.
Why does the truth look so different from the stereotype?
It’s because people are forgetting the fact that you don’t have to go at it alone. Many investors who aren’t wealthy got their start by partnering with friends or colleagues. They may not have money, but a grand here and there among friends could accumulate into a substantial enough sum to give them a kickstart when it comes to acquiring investments.
Successful Investors are Predominantly Male
Around 75 percent of investors in the US are male. The rest are female. While this statistic upholds the stereotype, it also distracts people from one interesting fact. While only a quarter of investors are female, more than 85 percent of consumer decisions and 91 percent of home-purchasing decisions are made by women.
There is a crucial disconnect here that people tend to gloss over.
Women rule the consumer market with an iron fist. This means they have an insight into the buying process and are therefore better qualified to invest than men. Why then, do so few women become succesful investors? The answer is easy: they are risk averse.
The key takeaway here is that gender is not limiting women from finding success as an investor. It’s their self-exclusion and unwillingness to take on unnecessary risks. The lesson is not exclusive to women as well. Anybody who is scared of investing should ask themselves – what is preventing me? Why am I so scared of investing? One will find that the answers are sometimes silly and not really a big hindrance to success.
At the end of the day, it may feel like the title of the article is a bait and switch. But the truth is that it’s a very important lesson that one has to learn. The title is a trick question – there are no specific qualities of a successful investor that automatically decide who will become a successful investor. If you are interested in wealth accumulation, all you need to do is take the first step and learn.