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7 Winning Life Tips from Top Financial Alchemists

by Evelyn on March 1, 2011

Financial alchemists are those with the ability to make gold of their investments. They appear to have the Midas touch. And we all clamor to learn their winning strategies. What I have not been aware of previously is that it is equally – if not more important – to find out about the way they think, their beliefs and behavior.

Learn the Art of Financial Alchemy
(Comic illustrator: Min, my 8-year old girl)

Successful financial alchemists have a lot in common, in terms of mindset, that we can also learn from. Knowing what these are can help us beat any financial market – whether they are trending upwards or downwards!

Allow me to share about my experience from the early years of my working life. It’s embarrassing just thinking about it. Well, I have previously spent a fair amount of money, time and effort into learning how to read equity charts, options trading and portfolio management. I even got a CFA (Chartered Financial Analyst) after studying for three years as my part time post-degree studies. CFA is a sought-after professional qualification in the investment field. Hey, I was booksmart! In the meantime and in the real world, I lost a lot of money (in five figures) from making some of the worst investment mistakes that anyone can think of. Luckily, I was trading with excess money that I had from my job and did not get into the situation of having to sell my possessions!

I have since learned how to tread more prudently. Have been burnt badly over and over again, I finally realized that it will help not to be rash or greedy but to take stock of my learning experience. More recently, I decided to take a closer look at what financial alchemists like Warren Buffett, John Bogle, Benjamin Graham and Peter Lynch can share about their values, thinking and behavior. I realized that they were no different from the everyday life tips that more of us can do with.

Learn The Art of Financial Alchemy

1. Emotional Mastery. It is obvious that making gold is only possible through mastering emotions. Their gains are often made because they are able to pick out opportunities where others have missed. They buy when no one is buying and sell when everyone else is buying. They are market leaders rather than followers.

“Individuals who cannot master their emotions are ill-suited to profit from the investment process.” – Benjamin Graham

“There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.”- Peter Lynch

The thing is to acquire the ability to manage your emotions such as fears and worries before putting your capital down. It may mean refraining from chasing the market with signs of overheating. You do not allow greed to cloud your clarity. Nor fear of running prices to take over your senses. You will be a more cool-headed investor if you are in better management of your emotions. I recall receiving the tip that when emotions goes up, intelligence normally comes down and vice versa from an investment expert.

2. Devise Your Own Strategy. Financial alchemists often share the secret of not going with the crowd. Their advice is to develop your own beliefs, strategies and system. Those who follow the herd without discernment are like sheep waiting to be slaughtered. They follow a litany of advice without being clear about their objectives. They tend to change their investment beliefs along with the market’s prevailing bias.

“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.” – Warren Buffett

“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” – Warren Buffet

If you are clear about the basis of your strategy, then you are less likely to be swayed by what others say. Hence, get clear and stay firm!

3. Practice Patience. Wise investors are usually very patient. They buy investments that are not popular or when there is a lot of fear in the market. They are contrarians. It is known that financial alchemists would sit out long periods of inactivity when they cannot find anything to invest. They knew how to prospect for gold. Their daily activities consist of being on the lookout for the right opportunity.

“Time is your friend; impulse is your enemy.” – John C Bogle

4. Practice Detachment. Financial alchemists are also adept at the art of losing. They practice detachment to their stocks if the market turns against them. They do not let their emotions get to them and are prepared to cut losses in an environment of falling prices. They do not hold on for longer than necessary to a losing position. They understand that to win, one must learn to lose.

“Operations for profit should be based not on optimism but on arithmetic.” – Benjamin Graham

I learned earlier on that when it comes to greed, nothing of good sense takes precedence. I have chased stocks based on empty rumors, misread the market and stayed on in a transaction longer than I should because of my inability to let go. False hope was what I hung on to. I would have reduced my losses if I wasn’t so attached to my “darling” stocks.

5. Use Imagination. It is important to use your imagination even though your current situation appears bleak. At appropriate turns, financial alchemists are able to conjure optimistic pictures of growth rather than get sucked into downright depression by listening to prevailing market news about the declining economy.

“If you do not see great riches in your imagination, you will never see them in your bank balance.” – Napoleon Hill.

6. Invest in Real Asset. According to Robert Kiyosaki, author to the best-seller “Rich Dad Poor Dad”, you create the most wealth when you invest in real assets. Real assets are those with fundamentals. They have value which appreciates over time even while there are temporary fluctuations. They produce income. Real assets also have a ready market.

Well, if you think about it carefully, you are your own real asset. The best investment that you can ever make is in yourself. You are the golden opportunity. Financial alchemists would also tell you the same thing.

“If a man empties his purse into his own head, no man can ever take it away from him. An investment in knowledge always pays the best interest.” – Benjamin Franklin

7. Spend Time Getting to Know Your Asset. Many of us hope to make quick money. We dream of hitting it rich with the right stock. The truth is that most speculators who do not spend time studying their financial instrument will end up with more losses than wins. Investments based on fundamentals in the long run usually outperform those with a lot of hype but no substance. My brother, a stockbroker, offers me the same advice every time I am tempted to “make a killing” through trading on penny stocks.

“Spend at least as much time researching a stock as you would choosing a refrigerator.” – Peter Lynch

This tip brings me to the point of knowing yourself well, since you are the real asset. Develop self awareness. Spend time getting to know your strengths, values, stress points and so on. In the process, develop a vision for yourself.


Make Gold of Yourself

I have come a long way since the days when I would punt the market. From having taken stock, I have managed to save myself from making more bad investment decisions. Then again, it’s not about making money quick anymore. It’s about taking wise decisions that would allow me a full life. By having the right mindset, values, beliefs and behavior, I hope to manifest an outstanding life for myself.

To make gold out of ourselves or life, then it is important to be tuned into abundance consciousness. In the process, we gain the ability to tap into a stream of ideas that can potentially become gold.

As a real asset, you do not just grow by intellectual knowledge. You become more valuable over time by assimilating truths. Any future value computation on self is likely to yield a positive result. Hence, start today! Make an investment in the right direction – transmuting into the gold of who you are. Need more tips? Download my book, Abundance Alchemy: Journey of Gold!

Abundance always,

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{ 9 comments… read them below or add one }

The Vizier March 2, 2011 at 12:40 am

Hi Evelyn,

When we look at the success of others, we usually do not see beyond the superficial. It can be difficult to perceive the hard work, values, mindset and beliefs that have contributed to the success. To practice the form without the substance is not true mastery.

Speaking of mastery, emotional mastery is a vital skill in life. But this can be especially so when it comes to investments. With so much at stake, it can be easy for our emotions to cloud our judgments. But if you enjoyed Chow Yun Fat’s God of Gamblers as much as I did, you will know that the ability to remain detached will allow you to be a financial alchemist, in investments of course. ;)

The concept of time is interesting. When we think we have less time, we are more prone to hasty and ill-advised decisions. But if we sit in for the long haul, we can make more objective decisions. To have patience, we really need to have long term goals. Being easily distracted by short term goals will never lead to financial mastery.

Thank you for sharing this article! :)

Irving the Vizier

[Reply]

Evelyn Reply:

Hello Irving,

I haven’t watched God of Gamblers. But yes, when it comes to money, many of us find that we are unable to stay detached. Other than learning on emotional mastery, I now use my intuition and other skills to help me make a better investment assessment. I’ve been better able to make wiser choices.

I don’t do long term goal setting in the traditional sense. I use visioning that incorporates a sense of higher purpose and spiritual direction. You’ve made a great point about being less distracted when we think longer term. I’m already less distracted for sure :-)

Thanks for sharing your thoughts,
Evelyn

[Reply]

Rob March 2, 2011 at 9:39 am

I recently was given assignments to write about 2 very different investments. Both clients share a conviction that we are headed for a financial meltdown. This may or may not come to pass, but the assignments led me to think about the mindset of fear. They also made me think about Ralph Waldo Emerson’s essay, Self Reliance. I read it again after 40 years and it was amazingly timely. Highly recommended. Just google it and you can read the original or versions in contemporary English. I recommend the original.

Then I got your newsletter. I really liked these words:

“By having the right mindset, values, beliefs and behavior, I hope to manifest an outstanding life for myself. ”

The only thing I take issue with is the “hope” part. It seems to me that those who cultivate those qualities are already manifesting outstanding lives for themselves, whatever may come to pass.

Thank you for a very interesting blog.

[Reply]

Evelyn Reply:

Hello Rob,

Self Reliance poem by Ralph Waldo Emerson sounds familiar. It will be great to re-read the poem. Thanks for the reminder!

It’s true that I have manifested a beautiful life for myself. At the time of writing this article, I used the word “hope” as I was reflecting about my journey and looking forward. Most certainly, my intention is to continue to grow through an unfolding revealing of my true self and in the process, touch more lives. And vice versa.

“If you light a lamp for someone else it will also brighten your path.” ~Buddha

Love, light and peace,
Evelyn

[Reply]

Justin March 2, 2011 at 1:04 pm

I agree that keeping your emotions out of investing is a smart strategy. Managing your emotions is as important as managing your money. I found your blog through twitter. I am looking for other like- minded people to connect with. Thanks….

[Reply]

Evelyn Reply:

Hello Justin,

Welcome to my site. It’s great that you’ve realized it too: that managing emotions is important for managing money. Many of us tend to neglect emotional mastery, however.

Looking forward to build a greater connection,
Evelyn

[Reply]

Angela Artemis/Powered by Intuition March 3, 2011 at 11:38 pm

Hi Evelyn,
This was a fantastic post. I have a background in financial planning and finance and I completely endorse your approach! You definitely need to invest on a level that’s comfortable for you and you must know your asset, for sure! Thank you for sharing your sage advice with us.

[Reply]

Evelyn Reply:

Hi Angela,

We’ve certainly got a long in common. And we are now using our intuitive abilities to make better financial decisions!

To more empowered living,
Evelyn

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Stacy March 4, 2011 at 1:39 pm

Hi Evelyn,

Thank you for this thought provoking article, I have not thought too much about investing. It makes a lot of sense that the truly successful are buying when everyone else is selling and vice verca because in other areas of life it is said that successful people look around and do what everyone else isn’t doing.

I like to practice the art of visualizing, it is something that is still a fairly new practice for me. I have found that it is very motivating and it helps to move my mind into the right direction. I made an affirmation video and vision board recently (posted them on my blog as part of Steven Aitchison’s Mind Alchemy course) and I am continually inspired by them as I revisit them.

Blessings,
Stacy

[Reply]

Evelyn Reply:

Hello Stacy,

Well, thinking about investing is important because we need to find ways to grow our money. It’s great that you’ve started on visualizing. You’d realize that it is a wonderful tool for bringing your dreams forward. Hope to see your video and board in a while!

Abundance always,
Evelyn

[Reply]

Chris Edgar March 5, 2011 at 2:48 am

Hi Evelyn, I like this look at how being able to sit with emotions, as opposed to reacting to them in automatic and sometimes self-destructive ways, can have practical benefits in our working lives — I get the sense that people tend to separate their emotional lives from their work, as if the two didn’t influence each other, and I think letting go of that belief has “real world” advantages.

[Reply]

Evelyn Reply:

You know, Chris, you’ve made a great point about how funny it is that many tend not to realize how inter-connected their emotional and work lives are. It’s as if they wear a different mask to work. However, what is suppressed can actually work against them in the work arena.

Thanks for sharing,
Evelyn

[Reply]

Pamela March 7, 2011 at 9:11 am

Hi Evelyn,
Great Article. I agree that detachment is key. We really need to trust that abundance can come from many sources and not to be attached to any one thing or way to achieve it. Sometimes it makes sense to cut our losses and move on to something new. Lots of great tips here.

[Reply]

Evelyn Reply:

Thank you for your feedback, Pamela!

With love,
Evelyn

[Reply]

Ileana March 12, 2011 at 2:47 pm

Thank you Evelyn for yout thoughts. Delighted there were such positive responses. I have a question. Your professional background seems to be in finances and you started this process of investing and awareness early – so you have time to be wise and patient and let things mature. My moment of awakening came much later, in my mid life, out of dire need i dare say. My emotions and awareness are in a much better place now than they were a year ago, but financial education, theoretical and practical, takes time, after which results to come need time as well. What is your advise for late bloomers?

Many thanks, Ligia

[Reply]

Evelyn Reply:

Hello Ileana,

I beg to differ. It would be a limiting belief to think that I have the advantage of starting early. While the length of time spent may be helpful in the accumulation of knowledge, it does not necessarily make a person wise. Wisdom is having clear insight. So I’d like to encourage you. You might be starting later than me or a lot of people, but with the benefit of clarity, bigger perspective and greater focus, it is possible that you make better headway. The thing is to start and not let the thought of age daunt you.

I don’t claim to know everything. In fact, I find that there is so much I’d like to learn and grow. As far as I can remember, I have been into continuous learning. The best advice I can have for anyone is to get started and don’t be afraid to ask. I experienced greater progress when I started asking more questions. I also like to ask the right people; meaning that I’d pay for the coach or mentor who can teach me what I need to know. If time is a factor, then learn from those who’s made a ton of mistakes and who’s able to recommend the better way forward.

Hope the above helps :-)
Evelyn

[Reply]

Ileana March 12, 2011 at 4:33 pm

Thank you, it helps. And I wasn’t being contrary, just looking for your thoughts :) Ileana

[Reply]

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