3 Things Billionaire Investors Do That Other Investors Don't
It is how they stay rich
Not everybody can be a billionaire investor. However, the principles of billionaire investors can help anyone become a better investor. And the first thing to note is that billionaire investors don't invest to make money. Instead, they invest to preserve and grow money.
Many people think that you invest to make money. Yes, it is possible to make a lot of money by investing. It is also possible to lose a lot of money too.
Many who lose money invest with the mind of making money. This is when you get greedy. It is when you invest with the mindset of preserving the value of your money that you actually make money.
Keep that in mind, and consider the 5 things billionaire investors do that others don't:
1. Billionaire Investors Investigate
People don't investigate enough. They think that their money is so small that they don't need any investigation. And the investing world is not like that.
Investigation is not about the money. It is about your commitment to investing. All billionaire investors I know investigate to a fault. They go as far as hiring private investigators.
You don't have to go that far. But you must realize that it is your duty as an investor to investigate. You have the internet. Research the company. Research the founders.
If you will be investing in public companies, you must learn to read balance sheets. If you buy stocks in a company where you don't know their business, you are gambling.
If you don't know their business, how will you know when a new government policy is going to affect them? How will you know when the economic landscape changes? Blind faith is not something that works in investing.
2. Billionaire Investors Defend their Positions
There is a difference between what happened and the market reaction to what happened. And in the stock market, as an example, the market reaction to what happened is more important than what happened.
In the short term, the stock price movements make very little rational sense. But in the long term, it makes rational sense. There is a reason for this.
In the short term, there is a lot of noise. And people try to create fancy narratives for what is happening (in a way that benefits them). Now, this is important because no one talks about a position that doesn't benefit them.
Billionaire investors talk about their position. They defend their position. They don't go into all the details (for obvious reasons). But they try to win people over to their mode of thinking.
If you cannot defend your investing position in an intellectual argument, maybe you are not investing right. When you come out to express your stance, it makes you conscious of what you are doing.
This is a test called - listen to your own BS. If you listen to your own BS and it still sounds BS to you, then you are doing something wrong.
3. Billionaire Investors Protect the Downside
The secret of making a lot of money in investing is not high risk-taking. The investments that make a ton of money are not very high risks. But most people think they have to take higher risks to get a higher reward.
Yes, higher risk means higher reward in most cases. However, billionaire investors approach these things differently. They want to reduce that high risk to the barest minimum.
That is how you stay in business for decades. This is how you remain a billionaire for multiple years. Those who don't know how to protect the downside wake up one morning and they are wiped out.
So, the billionaire investor takes a high risk. Identifies the potential downside. And then goes around to protect those downsides as much as possible. This is such that if the deal goes south, no significant money is lost. In fact, in a lot of cases, zero money is lost.
You would think that billionaire investors are people who don't mind losing money or throwing money away. They are the exact opposite. Many of them have a tight grip over money - they can give an account of every penny.
Don't think that you will start doing this when you have money. If you won't do it today, you will not do it when you have more money. Pay attention to the little details and go as far as you can to protect the downside. This is what makes you a great investor.
Three things billionaire investors do that other investors don't:
2. Defend their positions
3. Protect the downside
Use these principles. And stay rich