While many view patience as "taking things slow", the truth is that patience has nothing to do with speed and everything to do with mindset. Practicing patience as an investor is vital for long term financial health and well being. Here is how we can all be The Patient Investor.
Investant Definition of Patience: "The ability to endure stressful and uncomfortable circumstances with calmness."
Market In Distress
Whether the market is trending up or down, the patient investor will make consistent contributions and trust the process.
It can be difficult to keep calm in turbulent markets - especially when the majority of our wealth is held in securities and instruments directly tied to market performance. This is why our recommended approach to personal finance management - including holding 3 to 6 months of expenses in a high yield savings account (HYSA) - is intended to help alleviate any stress from investments. The patient investor is not worried about short term market movement as they can be confident they are properly positioned for long term financial health.
Read More About The Investant Approach To Personal Finance Management
Set Up For Success
As mentioned earlier, the patient investor is setup with a financial system that promotes long term confidence. While those with strong patience can maintain the calm in any environment, it helps to create an environment with peace in mind. In our day to day lives, this might mean choosing to take the back roads instead of the highway every now and then or staying in on a Friday night. In personal finance, this can be created by having a healthy savings and refraining from keeping all your eggs in one basket.
When you have a healthy savings, it's not worrisome when the car needs to be repaired or the hot water heater needs to be replaced. If you lose your job, you're prepared! The day to day stress of these life events don't weigh over you because your financial system accounts for the bad just as much as it does the good.
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