Understanding The Emotional Dynamics Of Investing

Investing can be an emotional roller coaster for many people. This holds true whether you are
investing in real estate, gold, the stock market, your own business, or whatever you consider
your investments to be. There are some basic things you can do to make the process less
emotional and in turn, less stressful. Make sure you do not over-extend yourself, be aware of
when your break even points may be, and have a back-up plan if your first plan doesn’t work the
way you thought it would.
Do Not Over-Extend Yourself
There is one main reason that over extending yourself financially for an investment is never a
good idea. It does not allow for any error, change, or learning curve. Most often people rely on
others to participate in some way to make their investments successful. Most businesses need
people to run it, investment properties need tenants, and market investors need professionals to
guide them. If somebody lets you down it will be hard to bounce back if you are over extended.
The Break Even Point
Different investments have different break even points. If you are looking to break even quickly
and start being fully profitable you are likely looking at investments that are not as risky. Higher
risk equals higher reward. Lower risk equals less reward. A combination of both investments is
excellent to have. After you have reached a breakeven point you open up your investments to
valuable other opportunities too.
Have A Plan For The Plan
At first thought that probably sounds ridiculous but it is necessary. One of the most stressful
things that can happen to investors is to not have things go the way they envisioned. Creating
a plan in the first place will allow you to realistically evaluate your expectations and investments.
No solid plan should be all or nothing. That is when the back-up plan comes in to play for
investors. It allows you the flexibility to make adjustments and tweaks when necessary.
The dynamics of investing can be very emotional and stressful if not properly managed. When
you are aware of what is all involved you give yourself the power to avoid those situations or at
least manage them effectively. That will make your investments more exciting, rewarding, and
enjoyable. Those positive factors will only lead to greater success in all that achieve with
investments and life.

April 11, 2017

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