One of the most interesting statistics I read about millionaires was from the book The Millionaire Next Door. In it I read that more than half of millionaires never received a single dollar from their families in the form of an inheritance. It goes to show how dedicated and ambitious these people are.
In the stock market, you can become a millionaire. I did and so did many of my students within the Tim Sykes Millionaire Challenge.
But you’ll need to adopt these five millionaire habits first.
1. Do you have the Patience?
Patience is always a virtue in the stock market. Millionaire stock traders don’t get rattled by sudden short-term drops in stock prices. They know that the downturn is only momentary and they have greater profits available on the horizon.
Take Imperial Brands Group PLC as an example. Their stock has dropped almost 800 points from a 2017 high of over 3900. Yet if you look at the forecasts they’re projected to outperform the market and eclipse those highs in 2018. Yet most investors will never realize those profits because they’ve already panicked and sold.
In stock trading you have to be in this for the long haul.
2. Do you have the Dedication?
Investors spend little time trading and the rest of the time researching. They’re adopting both technical analysis and fundamental analysis in their research. They know how quickly the market can change so they never stop educating themselves.
That’s why my students always spend 12-16 hours a day constantly learning. And this dedication has paid off for many of them.
3. Are you Ambitious Enough?
Setting goals is always important. You must be ambitious enough to shoot for the moon. At the same time, that doesn’t mean millionaire stock traders aim for huge gains in single trades. Most wealth is accumulated over a long period of time, with only moderate gains per trade.
Make sure you have goals set, but don’t make stupid decisions on the way there.
4. Are You Learning from Your Mistakes?
This is not necessarily a stock example, but it shows an important lesson. Before 2008 the idea that a barrel of oil would ever drop below $100 was considered foolish. Anyone saying such a thing would be instantly dismissed as a moron. Yet in 2017 here we stand with oil at $55 per barrel. Nothing is a sure thing and many investors learn that the hard way.
The same goes with any stock. But the point here is to learn from your mistakes and adapt. Don’t let your mistakes wipe you out.
Take some time to reflect.
5. What is Your Niche?
Develop your knowledge of a small niche. This is what all the top investors do. They master a single niche by knowing everything about its stocks and the buzz going on around the industry. That instantly gives them an advantage over everyone else.
I recommend finding a niche you enjoy, even if you’re not an expert, and becoming a specialist in it. Read everything you can about it.
Last Word – Making it Happen
Make these five principles your calling card. Develop them over time and never stray from them. I write them on a sticky note above my computer when trading. And you should too.