Common Traits of Successful Investors

How do some dentists build healthy retirement nest eggs, while others never have enough set aside to enjoy the lifestyle they would like after retirement? There are no `pat` answers, but the following are some common traits that successful investors share:

Sep 1st, 1996

Dick Hale

Editor/Publisher

dickh@pennwell.com

How do some dentists build healthy retirement nest eggs, while others never have enough set aside to enjoy the lifestyle they would like after retirement? There are no `pat` answers, but the following are some common traits that successful investors share:

They start early. The longer period of time utilized to accumulate funds, the less money that is needed to set aside to achieve goals. The magic of compound interest really multiplies for savings set aside early. Also, for those who invest in stocks and mutual funds, the longer funds are held, the less likely that short-term market downturns will have a long-term detrimental effect.

They pay themselves first. Successful investors set aside investment funds first, not waiting to see if there is money left at the end of a pay period for savings. Consistent, small savings will grow to a tidy sum.

They set realistic goals, based on current income levels. Unrealistic goals lead to disappointment when they cannot be fulfilled.

They have a long-term plan. Successful investors set a long-term goal and implement a plan that lets them get there. Solid, long-term investments will reward the prudent investor.

They diversify their investments. They allocate dollars into stocks, bonds, real estate and then choose different investments within each category.

They are aware of tax factors. Most realize that tax-deferred pension plans and IRAs provide added returns. These funds can be invested conservatively and still achieve a rate of return that will top most taxable investment avenues.

They ignore investment fads. They know that when everyone is jumping on the bandwagon, the end is in sight.

They monitor their investments. Wise investors study up-to-date information and act appropriately on that information to make changes when necessary.

Investors who are patient, logical and disciplined will achieve well-thought-out investment goals. Review your investment plan. Follow the tips of successful investors and you won`t have to join that large percentage of dentists who, when ready to retire, do not have the nest egg that allows them to live the lifestyle of their choice.

More in Investments