I’ve ironed clothes while wearing them (early, early in the morning) and received third degree burns. I’ve fed chocolate to already hyperactive toddlers. I’ve lost money on investments. Yep, I’ve made mistakes and being only human (despite my hubby’s insistence that anyone who likes dill pickles on her cheese sandwiches can’t possibly be from earth), I will continue making them.
When I invest, I’m prepared that even with all my brilliant thinking and research, I could lose the money. Or it could take me longer than I expected to get my money back.
So I only invest what I’m willing to lose (not that I want to lose it). If I need the money to buy a new bra next week ‘cause I accidentally washed my last best white bra with the hubby’s grubbies (don’t ask), I’m not going to invest it in the market. If I need the money next year for a down payment on a sweet little hut on some tropical island (dreaming again), I’m not going to buy stocks with it. I might buy government bonds (more secure) or stick it in a money market fund but I wouldn’t buy stocks.
Stocks are a long term play for me.
I also, knowing that I could make mistakes, would prefer to invest in a few different stocks (I like the number ten). When I first started out, this was difficult (didn’t have much money) so I tried to pick safer (i.e. very boring) stocks.
Why would I invest if I know I might lose the money?
Because for every loser stock, there is (hopefully) a winner that more than offsets. “You can’t win all the time” is the creed of the investor. We can lessen the losses (exit plans, research, etc) but they will still occur.
But every time I make an investing mistake, I become a better investor. The losses are like a tuition fee (as long as I learn from the losses) and the return on that tuition is pretty darn good.
Comments (3)
I like that, the losses are like tuition fees. Very good analogy.
Posted by Matt | September 28, 2006 9:04 AM
Posted on September 28, 2006 09:04
It is just like paying tuition. I was just talking to a friend of mine yesterday who is a very successful real estate investor, speciallizing in flipping. She said that the statistics for people in her area of REI are that they lose money 11% of the time. Although she has never lost money (she is very very good, she said the same thing. She paid $15-20K for college that and if people lose money over the course of investing, as long as you learn, it is like paying tuition for your REI education.
Posted by prlinkbiz | September 28, 2006 9:42 AM
Posted on September 28, 2006 09:42
And that money spend on "Life's Classroom" is probably a better dollar for dollar value.
Of course it's hard for many people to learn to 1. Get up 2. Do something and 3. Believe in themselves.
Posted by Berry E | September 29, 2006 4:22 PM
Posted on September 29, 2006 16:22