Investing is another vehicle for reaching your I.L.W.E. goals, and for many people, this is the right strategy. Although professional investing is not for everyone, investors and investment opportunities span the gamut. There are proactive investors and passive investors, short-term and long-term investors. Some people invest in ideas, other people, startups, art, collectibles, markets, real estate, cryptocurrencies, and a plethora of other things.
With the variety of investment options available, the important question to ask yourself is this: Do I have a proper strategy and the mindset it takes to be a successful investor? Stock, bond, crypto, and real estate markets fluctuate with the economy and require not only interest, knowledge, and aptitude in these fields but also a high tolerance for risk, especially if you don’t know what you are doing. Many people shy away from investing due to their lack of knowledge and education and the lack of control inherent to many of these opportunities.
For the majority of people, investing is a way to diversify income and build wealth, but they don’t consider it a full-time occupation because the perception of risk feels too great to be reliable. Because of this, most investors are passive and reactive, meaning they have relinquished control to someone else or the market. Ironically, the reason investing feels risky to these same people is because their passive or reactive approach makes them subject to the whims of the economy, the markets, or their financial advisors. Having invested their money, they are hoping for a return. But as James Cameron said, “Hope is not a strategy.”