Today's Daily Blog
Risk comes from not knowing what you’re doing. – Warren Buffett
Wise words from one of the most well known and successful investors in the world.
Sure, businesses can be risky and so too can investments.
But, you can minimise your risk substantially by understanding what you are doing.
Going in blindly to a business not knowing anything about your market, your competitors and your suppliers is not understanding what you are doing. That’s taking a big risk.
Investing in something because you heard someone mention a stock, currency or crypto without doing your own research or knowing how those markets work isn’t understanding what you are doing. That’s taking a big risk too.
You need to know what you are doing. Educate yourself, get help, pay someone or do whatever you have to in order to understand what it is that you want to do.
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Everybody wants long-term wealth, but few plan for it correctly.
The time to plan for it isn’t once you have it.
The best time to plan for it is before you get it.
Because how you structure your wealth plays a big role in your future wealth management and asset protection.
It can become a costly exercise when you try to start structuring your wealth once you already have assets or cash in the bank and want to transfer it into trusts or other business structures.
In some cases, if you’ve already purchased assets it can be hard or not even possible to then transfer them into a trust or structure for long-term benefits.
You don’t have to spend money on accountants and lawyers straight away, that’s better for once you’re ready to start putting things in place. You can, however, educate yourself and better understand what your options are and get an idea of how you would like things structured.
Putting the time in beforehand to plan for wealth means you can reap the benefits of your wealth long-term without paying unnecessary fees, stamp duty, taxes, and other financial fees.
I read a lot of books. And I have multiple books on the go at the same time on different topics.
People will sometimes ask how I can read so much. I don’t have any secret to this question. What works for me is pretty simple though.
I just read what I’m interested in at the time.
If I’m wanting to learn something new, I get good books on the topic and get stuck into reading.
The key for me though is making sure I try to find the right books in the first place. I don’t just get any book. I’ll read through reviews on Amazon or Goodreads and make sure that the book already has decent reviews from other people.
Once I have the books, I start reading. I’ll get a rough idea of the book by flicking through it and going through the contents and then I start.
By reading on a topic that I’m interested in at the time, it makes it easier to read because I’m thinking about what I’m reading and what I’m wanting to do at the same time. It’s like I’m putting what I learn straight into practice.
If I come across a book that I’m not vibing, I put it aside. I’ll come back to it and try another time. If after that I still can’t read it, I don’t bother trying again. This just happens with some books.
And, the reason I have multiple books on the go at the same time is to mix things up so I can choose what I feel like reading depending on the time I have to read, what time of day it is, my mood or what I’m wanting to focus on that day.
You don’t go into a tournament expecting to win after the first round or day.
What you do in that first round matters. It helps to set you up and put you in a good position.
But it doesn’t win you the tournament.
You could easily flop after a successful first round. Just like you could comeback after a poor performance in the first round.
What wins you the tournament is what happens over the duration of all the rounds.
You have to be focused on the tournament, not just a single round.
The 2021 Masters Tournament for golf is on at the moment and I’ve been watching some of the players talk leading up to the event.
Rory McIlroy was talking about how we went to visit the injured Tiger Woods at his family home recently. In Tiger’s family room there is a trophy cabinet of this 15 major titles that he’s won. Rory asked Tiger where all the other (non-major) trophies were. Tiger’s response shows just how focused he is…
‘I don’t know.’
‘Yeah, my mom has some and a few are in the office and a few are wherever….’
Tigers’ only focus is on the top. The major tournaments.
They are what matter to him. They are what he trains for. They are what he focuses on.
All the other tournaments he has won would be a huge accomplishment for any golfer. But for Tiger, they are just part of getting to the top.
He doesn’t allow the non-major wins to distract him and to cloud his focus of what he is aiming for.
There are going to be days when you get stuck.
You don’t know what to work on, you procrastinate, you can’t find your focus, or things just aren’t working out how they were meant too.
Rather than let those days go to waste, use the day to do other things…
Build an asset.
Review your goals.
The more assets you have, the more exposure you get.
The more exposure you get, the more income potential you have.
In investing terms, this is having more properties, more stocks, more active trades, more collectibles etc.
In business terms, this is having more products, more businesses, more offerings etc.