8 Rules of Investing

Over the years I watched some really smart investors build their wealth by investing in property. The rules that they apply is key to their success and being able to spot mistakes is key in learning from them.

This is a set of rules have come to mean a lot when I’m working through my decision making process. I find that they also let me see what was at fault when my failures have happened.

Rule One: Always preserve your capital. Risk your return, but in the worst case you should always be in a position to recoup your initial investment.

Rule Two: A good Investment needs to outgrow inflation. “Use good research to locate high growth investments”.

Rule Three: Minimise investing into assets that go into negative growth during the market cycle. This applies to shares and some real estate too

Rule Four: Avoid having to trade and paying the associated costs.

Rule Five: Buy when others are selling, sell when others are buying and you will always come out on top.

Rule Six: Target growth areas for long-term capital growth in your property portfolio.

Rule Seven: “Time is your most important asset” Make long-term investments and disregard the bumps in the road along the way.

Rule Eight: Use leverage and don’t pay off principal during the growth phase.

This is just my simple list, please add your own.

• This topic was modified 10 years ago by  Modernity Investing.