Wednesday, November 23, 2011

Investing Like the Rich

How often do we see articles on how to invest the way rich people invest? For yet another example, see this Wall Street Journal article. The not so subtle implication is that you can become rich yourself if you act the way rich people act. Unfortunately, this can be like trying to become a surgeon by wandering around in scrubs.

No doubt some rich people made their money by investing well. However, the people I know who are wealthy made their money in business, and they don't know any more than the rest of us about successful investing. One tried day trading with disastrous results, a few lost their money to a small-time advisor who skipped the country, and several just pay little attention to investing after handing their money over to a high-fee advisor.

Imitating the actions of successful people may or may not be a good idea depending on particular actions you are imitating. To know what traits to imitate requires deeper understanding. Learn more and think for yourself.

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