What is a successful investor?

Someone recently asked me what I deemed a "successful investor" to which I said that I felt there was no clear cut definition. Success is subjective, and as such, how the investor him/herself defines (and indeed measures) his/her own achievements and consequently success, will vary considerably.

For some it can be totally based on numbers, ie. the number of properties (residential or commerical) owned, the nett value of their portfolio, financial freedom from a paying job, whilst for others it is more their own feelings of self worth, SANF, and so on.

Either way you look at it, there is no right or wrong way to define it. It will mean different things to different people.

As long as you're happy with what you do, and how you do it, then I guess, that makes you SUCCESSFUL. :)
 
I would say that a succesful investor is one which can generate a reasonable rate of return OVER LONG PERIODS OF TIME.
The return doesnt need to be consistently reasonable, but that return needs to be achieved over a long period. This removes the 'speculative' element.
(Note a speculator could still be deemed a succesful investor if he is able to show that over long periods of time his speculative decisions create an investment like return).
 
Either way you look at it, there is no right or wrong way to define it. It will mean different things to different people.

Exactly!!!

The only measure is staring right back at you in the mirror every morning! ;) There can be only one critic and if you begin taking your measure from others, then your existence is merely walking in others shadows, IMO. That is definitely not going to end in happiness, contentment or SANF.....

Success is self defined, self assessed and self achieved. ;)
 
possibly.
Thats why i emphasise long term performance, it tends to weed out the 'lucky' from the skillful.

Look at it from another point of view.
If i come up with a new system of playing roolette. So i go down to the local casino and i win a bucket that night. Was i investing or just 'lucky'.
Surely the system needs to be proved over time.
 
Someone recently asked me what I deemed a "successful investor" to which I said that I felt there was no clear cut definition.

....so did the "someone" walk away a wiser individual having nailed the answer down to their question so precisely ?? :)
 
Surely the succesful investors are those who have one or two shining investment examples to point to, then go on the road selling DVD's, mentoring programs or other such "secrets".
They must be successful. Because they say they are. And they wouldn't lie, would they?
 
Successful Investor

To me this is someone who can 'plan to do something which increases their wealth' when they want to.

A sophisticated investor knows which market to be in OR is prepared to risk money by being in every market and manages risk by % of capital invested.

Still kicking myself for not investing $ when WBC had Term Deposits at 8 % for 5 years. Over 5 years may not have been great if IR rises as expected but would have been great considering amount of work involved to return 8% consistently over 5 years.


Regards
Sheryn
 
What is a successful investor?

Someone who didn't lock their money up in The Pyramid Building Society at 18% two days before it crashed in the early 90s.:D
 
Still kicking myself for not investing $ when WBC had Term Deposits at 8 % for 5 years. Over 5 years may not have been great if IR rises as expected but would have been great considering amount of work involved to return 8% consistently over 5 years.

Do people still do this?
Money in an offset account at todays ruling variable rate would provide a better effective yield than money in a term deposit account at 8% (after tax).
Don't kick yourself. Be glad you won't be kicking yourself in 3 years time when rates go beyond the 8% you "missed out on".
 
I've always thought of success as achieving your goals, whatever they may be. For me, investing is simply a tool. My goal is to have a certain lifestyle, which require income and time, and investing is my way of achieving this. Property has been, in my circumstances and to the limit of my knowledge and experience, the best way of achieving this.

Intrinsic value's definition of achieving certain returns over the long term is more a question of skill. As Monopoly pointed out, what about people who, say, piled into Perth before the boom? They might have been lucky, or they might have thought they 'saw' the boom, or the boom reinforced their beliefs. Regardless, they're successful if they've achieved their goals. If I achieve my goals, I certainly wouldn't care if someone considered me lucky or skilled.
 
possibly.
Thats why i emphasise long term performance, it tends to weed out the 'lucky' from the skillful.

Look at it from another point of view.
If i come up with a new system of playing roolette. So i go down to the local casino and i win a bucket that night. Was i investing or just 'lucky'.
Surely the system needs to be proved over time.

Yes, totally agree.

Proven over time and cycles and whatever the market and/or economy tends to throw in the investor's general direction.

Regards JO
 
Yes, totally agree.

Proven over time and cycles and whatever the market and/or economy tends to throw in the investor's general direction.

Regards JO

So you have to have been an invstor for more than ?? number of years before you could be considered ?
 
I've always thought of success as achieving your goals, whatever they may be. For me, investing is simply a tool. My goal is to have a certain lifestyle, which require income and time, and investing is my way of achieving this. Property has been, in my circumstances and to the limit of my knowledge and experience, the best way of achieving this.

Intrinsic value's definition of achieving certain returns over the long term is more a question of skill. As Monopoly pointed out, what about people who, say, piled into Perth before the boom? They might have been lucky, or they might have thought they 'saw' the boom, or the boom reinforced their beliefs. Regardless, they're successful if they've achieved their goals. If I achieve my goals, I certainly wouldn't care if someone considered me lucky or skilled.

Well put. But the reason i always emphasise the recognition of investing vs speculating are the different risk applications that must be made.

There are very different rules applying to risk vs speculation and its important to have the right frame of mind at the outset.

The reason i emphasise the long term again is due to mental fortitude.
In each bull market there are people whose wealth rise rapidly. The successful investors are the ones who can maintain and increase that wealth over time.

I am not commenting here on personal success, only successful investing. Again they are two different things.
 
Monopoly pointed out, what about people who, say, piled into Perth before the boom? They might have been lucky, or they might have thought they 'saw' the boom, or the boom reinforced their beliefs. Regardless, they're successful if they've achieved their goals. If I achieve my goals, I certainly wouldn't care if someone considered me lucky or skilled.

I do not wish to comment on the Perth property market as i do not know it.
But if the financial goal is reached during a boom (any boom), the key is to ask whether that goal will be maintained after the boom.

This will be a question of personal circumstances and risk.
During the dot.com boom there were many instant millionaires, during the lending and housing boom in the US there were many instant millionaires.

The key risk to being a successful investor during these periods is the ability to hold onto that wealth.

And more importantly not to assume that the rate of increase will continue indefinately.
 
So you have to have been an invstor for more than ?? number of years before you could be considered ?

Honestly i think the answer is yes, because you must be able to opperate in different cycles.
This does not mean that you have to achieve spectatular results in each cycle, only that your investment strategy allows you to move through the different cycles achieving a long term satisfactory rate of return.
 
Intrinsic value's definition of achieving certain returns over the long term is more a question of skill. As Monopoly pointed out, what about people who, say, piled into Perth before the boom? They might have been lucky, or they might have thought they 'saw' the boom, or the boom reinforced their beliefs. Regardless, they're successful if they've achieved their goals. If I achieve my goals, I certainly wouldn't care if someone considered me lucky or skilled.
Absolutely!! Does it really matter whether your success is the result of impeccable skill or sheer luck?? Certainly one would hope that it is the result of using the skills learnt from mistakes made, :cool: but what if...

Your success is the result of some spontaneous stroke of lady-luck, does that mean your success is doomed to be short-lived?? :eek:

IMO success is as much a journey as it is a destination. No point getting there if you're going to be evicted because you don't know how set up house!! :eek: What you do along the way, how you reach that point where you can kick back and say "I've made it" is equally (if not more) important than reaching your goal.

So for me, being a successful investor is about having made enough mistakes to not set me back in what I have achieved so far, but arm me with added knowledge to keep moving forward, doing better in the future until I get to the point where I can say, I've done enough; I'm where I want to be!! :)
 
Absolutely!! Does it really matter whether your success is the result of impeccable skill or sheer luck?? Certainly one would hope that it is the result of using the skills learnt from mistakes made, :cool: but what if...

Your success is the result of some spontaneous stroke of lady-luck, does that mean your success is doomed to be short-lived?? :eek:

IMO success is as much a journey as it is a destination. No point getting there if you're going to be evicted because you don't know how set up house!! :eek: What you do along the way, how you reach that point where you can kick back and say "I've made it" is equally (if not more) important than reaching your goal.

So for me, being a successful investor is about having made enough mistakes to not set me back in what I have achieved so far, but arm me with added knowledge to keep moving forward, doing better in the future until I get to the point where I can say, I've done enough; I'm where I want to be!! :)

Yes thats exactly what i was trying to say. Especially your point about getting there only to be evicted because you dont know how to set up house.
 
Do people still do this?
Money in an offset account at todays ruling variable rate would provide a better effective yield than money in a term deposit account at 8% (after tax).
Don't kick yourself. Be glad you won't be kicking yourself in 3 years time when rates go beyond the 8% you "missed out on".


Rob

It was for SMSF money (set and forget whilst travelling & reduced paperwork). :rolleyes:

Our cash & buffer money is in IP offset accounts.

Sheryn
 
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