Recently I was reading an article that talked about a book called ¿Cómo piensan los ricos? (How do the rich think?), the book is in Spanish, and among the many interesting things it mentions is the following sentence: "How you behave is more important than what you know "....
That phrase alludes to the importance that emotions have in our lives, in decision making, in practically everything. The detail in this case is that when we refer to investments, when we talk about money, if the predominant emotion is fear, obviously we know that the results will be terrible for our personal finances. When I analyzed what was behind that phrase, I saw it as a great truth.
Most probably, part of the secrets behind all these people who achieve economic success that transcends has to do with an emotional control beyond the usual, that it is not fear that dominates them and makes them make bad decisions, but quite the opposite, that they dominate fear and any negative emotion that may arise, and thus avoid clouding their judgment as far as financial matters are concerned.
This is a great lack that we have in terms of academic training, and if we add to the fact that no school teaches finance, investment or anything like it, neither one learns to control emotions, the results are obvious, a long line of people who live day by day financially, waiting for the next salary to arrive to try to solve expenses and evidently going from one debt to another.
And it is not that I disagree with debts, because well used they can leave us great benefits, however, it is not particularly what I see frequently, in fact, people think a lot to ask for a loan to invest in something, or to start a business, but when it comes to buying televisions, computers, phones, clothes, they practically do not even think about it, that seems totally absurd to me.
But it's not something I can counter, nor do I plan to do so, of course. But, really, just reading that sentence left me with a lot of things to think about, analyze, and make the best of it, because I saw a lot of logic in it really.
Posted Using LeoFinance Beta
That for sure is a lesson we can learn from this and instead of being covered by fear we can use it the other way around. If we are fearful of being broke why not invest and build a financial future to avoid that? For sure this is why many of us are in the crypto world and are quite thriving.
Posted Using LeoFinance Beta
Thank you very much for your comment. I think the main problem is that people think more about losing than winning. And obviously, losing is an option, but we can tip the balance more towards winning if we educate ourselves and if we learn to control our emotions, it's a kind of game, but that's what it's all about. Winning is winning.
Posted Using LeoFinance Beta
Man, I have seen people not even went to school or had any maths knowledge, but today they have riches of their own.
The main thing is balance if you know how to balance then you are a master of achievements. Balance makes your decisions to properly analyze the risk and reward factors.
But, anyway today we are living in a corporate world where your funds are not yours but of banks and governments.
Posted Using LeoFinance Beta
That's right, looking for that balance is the important part, because we can learn to analyze, to see beyond what others do, and you don't necessarily learn that at university, you learn it in life, you learn it by experimenting.
And I've also had the fortune to meet some people who have made a lot of money, have been prosperous, and they didn't have great training, but their decision to want to go beyond was bigger than anything.
Thank you very much for your comment.
Posted Using LeoFinance Beta
I completely agree.There is no school that can help you control your emotions in investing because you are in a protected bubble. Learning to master panic during falls or, conversely, curbing FOMO, are skills you can only learn in the field and you will never be ready for every eventuality. I also read a similar book, I don't know if it's the same author, but it doesn't tell you that many rich people are rich because they found the right people to make their first money. In order to invest you have to have an adequate income or assets, otherwise it's a gamble, and like all gambles it's a bit of skill and a bit of luck.
Posted Using LeoFinance Beta
If it is a project that requires a team, this team must be good, otherwise, it is something that will lead to failure.
If we are going to work individually, perhaps a good mentor will help, but what is very true is that we must consciously work on ourselves.
You mention luck, and I think that, even if you train a lot, the luck factor can be present at some point. Thank you for your valuable comment
I agree with you completely, but I would add that the network, the contacts, outside your team (private investors, business angels, etc.) are also very important, unless you already have a lot of money... Good point of reflection.
I think it takes practice to disassociate your emotions from your financial decisions. I have learnt the hard way not to mix both together, and to work against market sentiment most times, esp when not backed by anything tangible. And you are right, most of these financial skills are not taught in schools. Most of what I have learnt about finance and investment has come from interacting on platforms like leofinance.
"How you behave is more important than what you know "
At the end of the day, it all boils down to what we do and not what we know. I cannot begin to mention how many times I haven't taken my financial advice. I have made several predictions in the past that became a reality but never really implemented them mainly because I let sentiments get in the way. So yes, the statement is true. We need to learn to mirror our knowledge to our actions.
Posted Using LeoFinance Beta
There are people who are great thinkers, and although thinking is necessary, we definitely could not achieve anything if we only keep things in our minds and do not put them into action. And even more so if we do nothing out of fear.
So, acting is necessary.
Thank you very much for commenting.
Learning & earning is a rare commodity available to a select few people..
Posted Using LeoFinance Beta