compassion

Do You Have These Key Character Traits for Investing Success?

Toni Husbands — Fri, 22 Jun 2018 08:30:23 +0000

Warren Buffett, the Oracle of Omaha, summed up the key to investing success like this: "Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

Let's say you and I have ordinary intelligence and want to improve our investing chops. What are the traits that make for a great investor?

Compassion

Hollywood is awash with stories of money men who live by this mantra: "Greed is good." The Gordon Gekko character is burned into our collective memories for life. From The Boiler Room to The Wolf of Wall Street, we get it — the industry is full of sharks.

It turns out, sharkiness may work against you in the world of finance.

A study published by the Society for Personality and Social Psychology looked at the behavior of hedge fund managers over a decade. Managers with psychopathic, narcissistic, or Machiavellian personalities underperformed their peers by 1 percent annually. Over time, their ruthless approach to decision making added up to notable losses.

By avoiding aggressive instincts and underhanded tendencies, we can focus on developing the positive, compassionate traits that have helped billionaire investors like Warren Buffett and George Soros achieve amazing results. This means leaving the shady, cunning type of investor to Hollywood. (See also: The 5 Best Pieces of Financial Wisdom From Warren Buffett)

Optimism

Some people avoid investing altogether because they believe they'll never succeed at it. That mentality can become a self-fulfilling prophecy. Make no mistake; if you never take the plunge into investing, you're guaranteed to never see any returns.

Believing that you have the ability to be successful at investing and building wealth is the frame of mind you should always strive for. Whether you endeavor to develop the skills and DIY your approach to investing, or seek the services of a qualified money manager, believing in your ability to make sound financial decisions will help you move forward.

Optimism can be hard to sustain, but immersing yourself in a world of productive investment information has never been easier. Connect with groups through Facebook, browse personal finance websites, and follow the advice of investors with a track record of long-term success. Seeing your glass as half-full is great for the bottom line. (See also: 6 Confidence-Inspiring Facts About the Stock Market)

Patience

Successful billionaires like Warren Buffett take a long-term approach to investing. "Our favorite holding period is forever," he's quoted as saying. Patience will help you avoid reacting rashly to groupthink surrounding market fluctuations or hyperbolic headlines predicting the end of life as we know it. You may have done some research and found that the stock market's average annual return is 7 percent when you look at any 10-year period. This information feeds your optimism, and therefore you're willing to be patient. And your patience will help you keep a long-term perspective.

Goal-orientation

Since investing success requires a long-term perspective, goal-oriented people tend to have a leg up in this arena. Staying focused on the end goal helps you avoid distractions. Deciding whether you're investing for retirement, to purchase a house, or to save for a child's college fund will determine your best course of action. Setting interim goals, like completing an investing for beginners class or interviewing three financial planners, keeps goal-oriented people on the path to desired results.

Levelheadedness

Do you keep a cool head when everyone around you is in meltdown mode? Do you immediately default to the next steps required in the midst of a crisis? Your levelheaded temperament may easily be the most important personality predictor of success with investing, not your intellect. That is according to Mr. Warren Buffett.

Panic in the markets can be contagious; especially when our hard-earned cash is at stake. Your ability to remain calm in the face of short-term fluctuations will lead to better decisions and opportunities that investors who follow the crowd may overlook. (See also: 6 Investment Truths to Remember When the Stock Market Is Down)

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Get Out There! The Power of Vulnerability

Nora Dunn — Thu, 20 Jan 2011 14:00:13 +0000

Guess what? I’m not perfect. I get scared. I worry about my future. I want people to like me. I am afraid of loving somebody who doesn’t love me back. And I can’t stand the idea of people talking behind my back or accusing me of things I haven’t done.

These are a few of my vulnerabilities, out there for the world to see. And I’m willing to bet I’m not the only person who has these fears. We live in a vulnerable world, dealing daily with situations in which we are exposing our vulnerabilities (to ourselves if to nobody else).

When you feel vulnerable, or you’re searching for meaning in life, what do you do? Many of us "have a couple of beers and a banana-nut muffin" to dull the pain, suggests Brene Brown, a researcher-storyteller who gave one of the most powerful 20-minute TED talks I’ve ever seen.

But the unseen consequence of the numbing effect of those beers (or food, or drugs, or even medication) is the dulling of not only the pain, but the pleasure you could be experiencing in life.

Brown spent years studying the concept of vulnerability and how people who live whole-heartedly accept — and even celebrate — their vulnerabilities.

I highly encourage you to watch the video:

Among other things, Brown discusses the concepts of courage, compassion, and connection, and how they are embodied by the whole-hearted people she studied. Since watching the video, I have decided that I want to be one of those whole-hearted people.

So I’m exposing my own vulnerabilities to the people I care about. I’m re-examining what I’m doing, why I’m doing it, and how I want things to change (if at all). I’m not afraid to talk about some of my innermost fears and, conversely, to share my victories.

And if I feel vulnerable, I don’t reach for a glass of wine (at least not right away and not for the wrong reasons!); instead I ask myself what I’m feeling and what I can do about it.

In doing so, I’ve deepened some friendships inexplicably, and in turn had the honor of seeing a few vulnerabilities of others exposed — and nurtured.

I’ve accepted the fact that life is messy, and that leaning into feelings of discomfort leads to growth.

I’m willing to risk getting hurt to experience the joy of falling in love.

I’ll invest in a relationship (romantic or otherwise) without any knowledge of the outcome, despite the appearance of the odds being stacked against me.

And already, in exposing — and accepting — these often-hidden and painful moments, I’ve also glimpsed the euphoria that life is supposed to be all about. I am so blessed to be a vulnerable person.

Are you inspired? Ready to take the next step? Check out these 100 Ways to Change Your Life, set your intention with some vision boards, and see what happens!

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Let things go

Philip Brewer — Tue, 05 Feb 2008 20:54:26 +0000

Two of the unhappiest people I ever knew lived in the apartment below mine when I lived for two years in Salt Lake City. They acted as on-site managers--collected rent checks in exchange for a break on their own rent. I didn't have any real visibility into their financial situation; they seemed to be getting by, but at a pretty low standard of living. Like many unhappy people, though, they had a well-worn story of woe. They told it to me the very first time we met.

There's nothing wrong with a story of woe. We all have one. Most of us have more than one. But their story wasn't about their current problems. Their story was that some two decades earlier, they had sold a few acres of land in central Florida, land that later became part of Walt Disney World. They figured they'd probably been cheated, or at best were terrible unlucky.

That experience seemed to have colored their whole life. Every day was a day that they could have been--would have been, if not for bad people and bad luck--rich.

I've known other people like that. They viewed everything through the prism of something gone wrong. In some cases, the bad thing was a real trauma--a crippling accident, growing up without a parent, the loss of a lover or sibling or child--but often, as in the case with my neighbors, it seemed to be less than that. All that had really happened to them was that an opportunity for great good fortune had come close, but had missed them. It was like standing next to the guy who bought the winning lottery ticket. But in their eyes, not being super-lucky was somehow the same as having been very unlucky.

My experience is that you can't really be happy until you can let these things go.

In many cases the people in question may be clinically depressed and need to get proper medical attention, after which issues like these that seem to cloud their lives will just clear up on their own. If that's your situation, by all means, get the care you need. Great strides have been made in treating depression in the past twenty years or so, in the form of modern antidepressants and various kinds of therapy.

Looking in from the outside, though, it seems that a lot of these cases aren't that. They're just people getting stuck on what might have been and finding it hard to accept that things are as they are.

When this isn't a medical issue, I think there's a spiritual component to getting past such things--what you're looking for here is grace, and offering forgiveness to those around you is going to help as much as anything. Personally, I find that Buddhist practice is of help here. The way not to live in the past is to practice mindfulness--put your attention on where you are now. The first step to forgiving others is to feel compassion for them. Rather than feeling bitter over missed opportunities and past ill-use, chose to feel gratitude for the opportunities that weren't missed and the times that people and fate treated you kindly.

Those are the tools that I use when I need to let things go.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

When poor folks have better crap than you

Philip Brewer — Tue, 20 Nov 2007 13:26:24 +0000

Every notice how upset people get, when someone poorer than them has better crap? I'm talking about the guy agonizing over whether to spring for a 32-inch flat screen who finds out that his poorer neighbor has come home with a 42-inch one. It's bad enough trying to keep up with the Jones; when you have trouble keeping up with the guy living on the wrong side of the tracks, it's a source of constant aggravation.

I think this is a really natural emotion, but it's also a harmful one. I've seen it from more than one side.

I wrote a post a while back arguing that the fact that many families now have two people in the workforce was because standards of living had risen; if you were willing to live at a 1950s standard of living, you could still get by with a single income. (I also pointed out that there's a name for that--it's called "living in poverty.")

A lot of people didn't like that post. Some people disputed it on factual grounds, doing a back-of-envelope budget for a poor person to show that it was impossible (but without considering the sort of extreme solutions that were common in the 1950s, such as moving in with your wife's parents; most didn't even consider carpooling). Other people seemed to think that I was trying to claim that poverty wasn't poverty (even though I'd used that very word).

Other people did like the post, but some of them liked it in the unsavory way that I'm talking about--suggesting that living in poverty isn't so bad, as long a you've got good crap.

(On that topic, I saw a great cartoon recently, where a rich guy disputes the poverty of a poor guy, pointing out all the stuff he's got. In 1800: "You can't be poor! You've got a shirt!" In 1975: "You can't be poor! You've got a TV!" In 1990: "You can't be poor! You've got a VCR!" Let me just say, as I've said before, living in poverty is bad, even if the poor person spends as much as a frugal person.)

Still, I've felt that ire myself. I'm somewhat prone to be in that situation, because of where I live.

My apartment complex has an odd mix of tenants. Rents are at the lower end of the range for the area, so there are a good number of working-class folks along with graduate students, senior citizens, single folks, couples, new families, and so on. The place has quite a cosmopolitan air, actually, due to the number of foreigners who live here. It's a milieu that I rather like--I get to mix with a lot of different kinds of people. A good number of my neighbors have modest incomes, which is yet another aspect of the diversity that I enjoy.

There are also other upsides to this. One is is that it gives me a valuable perspective, as far as the "keeping up with the Joneses" thing goes. If you live or work where the Joneses make as much as (or more than) you, it's easy for that perspective to work against you. For example, whenever my former employer was hiring in a hot job market, new software engineers would start showing up with expensive new cars for which a signing bonus had provided the down payment. Looking at the parking lot quite easily gave one a skewed notion of what was normal. Living here helped me avoid that.

Still, inevitably, some neighbors have better crap than me. Some of them may not be poorer than me. Maybe, as I used to be, they are well-paid professionals who chose to live here because it suits them. Maybe they're students from affluent families willing to subsidize their lifestyle. Maybe they're just young singles who can comfortably afford nice crap because they have no debts and no one else to support.

In many cases, though, they're people who are making poor decisions about their spending--and that's aggravating to watch. It makes me feel bad for them, and it also makes me feel bad for myself, because I don't have everything I want.

Both these feelings are pernicious. One of the reasons I write for Wise Bread is to deal with the first. (Far better for me to advocate for living within your means here, where there's an interested audience, than to buttonhole my neighbors and criticize their lifestyle choices.) One of the reasons I read Wise Bread is to deal with the second. (It helps to be part of a supportive community of people trying to avoid the harmful effects of our consumer culture.)

I think this is one of those situations where a Buddhist attitude provides the best results. When people around you make unwise choices the appropriate emotion to feel is compassion, not ire. When you find yourself wishing for better crap the appropriate emotion to feel is gratitude for the crap you've got, not envy for someone else's.

It's not always easy to choose how to feel about things. It takes practice, and it takes paying attention to what you're doing and how you're feeling. But it's practice that worth doing. And what you're doing and how you're feeling are worth paying attention to.

And, if you simply must have more and better crap, check out Myscha's post: Stash Your Cash: How to Have Cool Crap for Less Money.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: