An investing leader is someone who has been making money using their particular investing strategy for a couple of decades. It’s unlikely that such a person will suddenly stop earning money and it might be wise to follow such an investor. This means that they have a sound investing strategy that’s perhaps worth learning.
I am not talking about following someone famous, these individuals play in the billions and though their strategy might be simple, there is no way for you to successfully follow in their footsteps.
Instead, look at your rich uncle, your wealthy real estate buddy, that couple who owns a franchise empire, and that doctor who has been investing in stocks all her life.
The Investing Leader
Generic advice is necessary and I even dish a little out here on this blog. But generic advice is only useful to help fill the pages, it provides little value to an individual.
You will hear generic advice such as condominiums make poor rental income properties because of their high carrying costs with HOA dues or special assessments. Yet there are a good number of very wealthy real estate investors who have a portfolio consisting of mostly condo’s.
Investing Longevity
An investment leader is someone who has been investing for a couple of decades and has done so successfully. The fact that they are still doing it is a good sign that it must have been lucrative in the long-run.
I know a few day traders and options traders but none have been utilizing these strategies long-term. These are individuals who jump in when the economy is really hot and give up when the going gets tough.
It’s uncommon for someone to use a sound investment strategy successfully for 2+ decades and then all of a sudden lose everything.`
Index fund investing, a passive mutual fund investing strategy, is a common strategy which many investors have used for decades with fairly decent returns. Despite this, in 2008 there were a lot of panicked investors who decided to pull their money out because they believed that surely this time, this particular time in the history of index fund investing, must mark the demise of this strategy.
Ask yourself: Has this person been through a bull market in their investing history? Have they been through a market crash?
Investing Leader → Investing Strategy
Ask a really good artist how they are so good at what they do and they will give you a vague reply or try to pin their talent on being left-handed or that they had artistic parents.
Not everyone can tell you exactly why their strategy works or may inadvertently give you the wrong reasons.
Just because this person can’t tell you how they do what they do so well, it is still helpful to follow them or apprentice with them if you want to achieve their level of success. Absorbing their knowledge will help you one way or another.
An investing leader has an investing strategy. That’s a set of rules which they stick to, give or take. It took them years to develop their investing strategy and you’ll save yourself at least that much time by learning from them.
The more successful they are the more consistent they will be. There is a predictability such as when they start selling off their real estate and when they start switching from single family homes to duplexes.
What matters isn’t just what they do but also what they read, whom they talk to, and which resources they use to keep themselves sharp.
Where To Find These Individuals
You might look for the person with the S-class Benz or the mansion up on the hill but you might be disappointed. In my experience the flashy person is rarely the successful investing leader and may have accumulated their wealth either through years of earning a high salary, an inheritance, or a fortunate investment deal.
When you are good at something it’s likely that you will share your talents and secrets with others who are interested as well. This may seem counterintuitive but when you’re great at something then you know that you’ll only get better if you can compare notes with others.
Forums, blogs, podcasts, and investing clubs are great ways to meet these individuals. At the end of this post I’ll list a few forums which are worth visiting.
But be aware of those who are making money sharing their knowledge – if they are making more money from sharing their knowledge than from their investing strategy then you will be on the receiving end of a sales pitch.
How To Approach An Investing Leader
“Hey will you teach me how to invest successfully like you?”
This is like someone coming up to you and asking you how to get into medical school. What’s your answer going to be? Most likely something generic, like: “Take pre-rec’s, take the MCATs, and apply to as many schools as possible.”
Instead if this person is showing up to all the events that you go to and is always listening more than asking questions then you will naturally take an interest in that person.
If you are an investing leader then you will see a little bit of yourself in that person and you will try to help them out any way you can.
Now if that person comes up to you and asks something more relevant and not just a vague question then it will be much easier and more pleasant for you to help them out.
Characteristics Of An Investing Leader
I’ve touched on these points already but I think it’s worth reviewing them in order to recognize the right investing leader and to stay away from those who are pretending.
Pertinent Positives
The following are positive characteristics which likely will define an investing leader:
- they keep their strategy mostly to themselves
- they open up willingly in the right company
- they understand their personal limitations
- they have been doing it for decades
- they are honest about the difficulties of their investing strategy
- in the right circles they are known to be among the best at what they do
- they require a little probing before they open up further
- their investing strategy is fairly consistent regardless of market fluctuations
- they are likely successful at many things in their lives, not just investing
- they have persevered through strong markets and crashing economies
Pertinent Negatives
- they don’t brag about their gains
- they don’t take excess risk to impress others
- they don’t spend lavishly from their investments
- their investments won’t be anything flashy
- they don’t believe their investing strategy is the only viable strategy
- they don’t make money talking about their investing strategy
Choose Your Ideal Investing Strategy
As important as it is to expose children to different experiences, it’s important to expose yourself to various investing strategies and therefore different investing leaders.
Sure, real estate investing is appealing to everyone because there is hardly anyone out there who hasn’t rented or bought and sold a piece of real estate. But the details of such an investing strategy are far from what we see on TV that it’s worth investigating the details before jumping into it.
The only way you can choose what’s right for you is by getting exposed and that means that you’ll have to put yourself out there on forums, investing clubs, and hang with the right people who do that particular kind of investing.
Resources
When you’re first starting out it might be a bit intimidating to go on websites such as Bogleheads or Mr. Money Mustache. These can be abrasive websites because the level of competence is high – the topics which merit discussion are deemed valid by those who are the loudest or claim to have the most money.
That said, your goal is to eventually get on these higher caliber forums and somehow get past the aura of superiority and condescension in order to get the answers you are looking for.
Forums
The problem with forums is that we are social creatures who obtain our cues by watching the facial gestures and body language of others. Forums don’t provide such feedback and therefore it’s easy for anyone to misbehave on such platforms.
There is a ton that you can learn but take everything with a grain of salt. That very rude comment might come from a well-meaning person who is even more sensitive to social cues than you are.
Below are a list of forums which you should browse in order to gain a basic understanding of investing. You’ll know when you are ready to post a question.
I really enjoy the YNAB forum because some of the nicest individuals are on these pages and they are ready to help.
You can’t be an investor if you don’t know how to budget so it makes sense to start on the YNAB Community Forums.
Early Retirement Extreme Forums
This is one of the few sites where I can learn about non-mainstream investing. I’m not referring to rubber futures. Here people are comfortable talking about Certificates of Deposits or bartering as a way of investing.
You’ll also come across a lot of counter arguments for more mainstream investing such as day-trading or index fund investing.
This is a great forums because there are a lot of physicians on this forum or others who think like doctors.
Basic questions aren’t suited for this forum because the answers will at best confuse you and at worst mislead you.
For complicated investing strategies and tax ramifications this is a wonderful resource. Put on your emo-armor because it can get a little heated. Though most attacks are on your lack of knowledge and not your lifestyle.
This is a great site to read about various investing topics but the knowledge-base is very shallow and sarcasm is heavy.
A few forum members are brilliant and worthwhile following. If you want to find you e-investing leader then this is where I would go to stalk someone and read each of their posts and comments.
Bigger Pockets Forum
This might seem more like a niche investing website but many of us have real estate as a healthy portion of our investment portfolio.
There is a lot of generic advice on here but also some brilliant individuals who really understand their investing strategy.
I would recommend stalking your investment leader on here and read whatever comments and posts that they write.
Reddit is a popular online forum for many topics but you can find your niche investing forum on here. The one I linked to is the personal finance forum which also discusses investing.
You can also find forums dedicated to day-trading, real estate, entrepreneurship, etc.
I haven’t spent any time on this forum but would expect it to be quite a good one. I reviewed a few of the topics discussed and it seems fairly intelligent.
The Godfather knows what he’s doing so I expect the WCI forums to be the same high-caliber has his published content.
Here you can ask your questions and a financial adviser will answer them for free.
The questions are fairly diverse and the answers are detailed. This is a rare little gem to post your questions to get started. Who knows, maybe you’ll meet your financial adviser on here.