Here is a key rule of investing – understand your risk appetite.
Not sure how to do that?
Try the exercise below.
Imagine you’ve invested 1000 into the thing.
Now imagine it has lost value.
How do you feel?
Do you feel like this will give you sleepless nights, or are you still calm?
Now imagine you’ve lost it – how does that make you feel? Can you move on easily, or will it cause you sleepless nights (and regrets) for days, weeks, and months to come?
Now go through the same steps with the amount of money you were considering investing.
If peace of mind is more important to you, then generally you would do better with safer investment approaches.
But if you are someone who is willing to take risks, and will not lose sleep over it even when it goes down or you lose the investment, then riskier strategies will be your thing.
But whatever your risk appetite, never invest more than you can afford to lose. Even if you have nerves of steel and can mentally deal with the riskiest strategies, it’s still not a smart idea to invest money losing which can risk your livelihood.
I learned this the hard way, so learn from my mistakes.
Think about your risk appetite before you invest.
And don’t invest what you can’t afford to lose, especially in riskier investments.
Success nearly always is a numbers game – you have to get through many no’s before you get a yes.
Then it snowballs.
Like it did for Colonel Sanders.
He travelled around the country and was rejected over and over.
Until he got a yes.
And that yes led to KFC, one of the largest food businesses in the world.
This was also the case for Bill Gates.
He pitched his idea to investors over and over and got many rejections.
Until he got a yes.
And that led to the creation of Microsoft, one of the most successful businesses in the world.
Or like it did for J.K. Rowling.
Her manuscript was rejected by publishers over and over.
Until she got a yes.
And that led to the creation of the Harry Potter saga, one of the most successful fiction book and movie franchise in the world.
If you are disheartened by rejections, take comfort in the fact that you are not the only one.
Majority of the incredibly successful people you know of have been where you are.
And the only reason they are where they are now is because they refused to quit.
They kept going despite the numerous no’s.
If it’s worth doing, keep at it.
Because one yes is all you need.
Have you heard of passive income streams? The idea with them is that you create income streams that continue to generate income from work you do once.
It’s a great strategy, one that I applied to my passion for helping people.
I have a few passive streams for helping people.
They continue to help people from one-time work.
This includes my books, blogs and other writings, as well as people I’ve advised, coached and mentored.
I hit upon the idea years back, when I posted reviews based on places I’d travelled to on Tripadvisor.
The reviews I posted there continue to help people even to this day.
I knew about passive income streams, so I wanted to emulate that principle for helping others.
And that’s what my books do.
As well as my blog posts and other writings.
And I will continue to build similar passive helping streams so that people continue to benefit from my work long after I’m gone.
That will be one of my legacies.
One of the ways in which my work will continue to make the world a bit better every day.
One of the ways I want my life to mean something, and matter, and make a positive difference.
How about you – do you have any passive helping streams?
Do you know what the best way to learn is?
It is to teach.
If you want to really learn something, don’t just learn about it, teach someone else. This way you improve your own grasp of the topic, and you help spread knowledge.
Most things in our lives are out of our control.
But one thing that we do have some control over is how we deal with things, i.e. our reactions/emotions.
But even that takes work.
Controlling your emotions doesn’t happen automatically.
It requires knowing and understanding them.
That takes effort and practice.
If you want to get better at controlling and managing your anger, for instance, you need to understand your anger.
You need to really understand your triggers, what helps and what doesn’t.
If you want to master patience, you need to understand what things you find easy to be patient with.
You can learn from them, and emulate in other areas of your life.
If you want to be happier, you need to understand what makes you happy and do more of those.
And so on.
You get the idea.
Trying to be better at managing emotions isn’t easy.
It is possible though, but only when you understand them.
Awareness and understanding are vital.
The only thing in our lives that we can control is our reaction.
But only when we understand them.
Some people have childhood friends who stay friends for the rest of their lives.
It’s a good situation to be in.
Because those are the people who know you the best and usually are people who have been with you through thick and thin.
If you are fortunate enough to have people in your life that you’ve been friends with for as long as you can remember, cherish them.
Because true friends are a blessing.
And should be cherished.
Doing the right thing isn’t always easy.
But that makes it even more important to do them, because choosing easy over right leads you down a road you will regret.
Choosing right always trumps choosing easy, especially in the long term.
Right is what leads you to a better life.
Right is what leads you to live a life you will be proud of.
Right is what leads you to be a person you will be proud to be.
Choosing right over easy makes life better for not just you, but also of the people you care about.
And it improves the world.
Choosing easy might seem tempting right now, but choosing right is what will really matter and make a difference.
Avoid the long term pain – choose right over easy.
Pragmatism is important.
But is not the same as giving up.
The difference can often be a very thin line…
Facing reality is when you stop doing something because you know for certain that continuing on that path is pointless.
Giving up is where you stop doing something not because you’ve exhausted every avenue and there is nothing more to be done.
One leads to progress.
The other does the opposite.
Learn to know the difference.
It used to be a problem, not having enough information.
Even 50 years ago, information on most things weren’t easily available.
But that’s hardly an issue anymore.
The current problem isn’t a lack of information, but rather, having too much of it.
It is great – having whatever information we need and want at our fingertips.
But it also has its drawbacks, the main one being information overload.
This is why it’s important to be selective about the information you take in.
Otherwise, you’ll drown.
Work is only “work” if you don’t absolutely love it.
It’s like this: when you are spending time on a hobby, you are still spending time and effort – in the same way you would when you are working.
The only difference is, the first is something you love to do and do without being paid. The latter you do out of a need to pay bills.
But that is not the only way to do things.
There are ways you can design a career that involves doing things you love.
It is truly a blessing when you can make a living doing something you truly love.
I was watching a documentary the other day about free solo climbing (Free Solo). The climber, Alex, absolutely loved what he did. He could do it without having to worry about money because his passion generated a living for him.
That’s what I’m talking about when I talk about making a living from doing the things you love.
Work is only a chore when you don’t really enjoy what you do.
So if you don’t enjoy what you do now, either find a way to make it something you really enjoy.
Or, find a way to do the things you really love.
How can you make your work into play?