Five habits of the very best investors

Most investors spend most of their time and energy thinking about what they can get from their investments. That makes perfect sense.

But there’s more than that to investment success.

A few investors are lucky enough to be successful primarily because they were born into wealth and abundance. But the vast majority of us have to rely on hard work and … what else?

If you can put your finger on that elusive “what else” factor that leads to success, you can change your life — and your family’s life — for the better.

As I researched my 2011 book Financial Fitness Forever , I posed exactly that question in a series of extended interviews with nine seasoned investment advisers I respect and admire.

One thing that emerged was deceptively simple. Aristotle said it this way: “We are what we repeatedly do. Excellence comes not from our actions but from our habits.”

Again and again these advisers identified key habits that seemed ingrained in the most successful people they had worked with. Their “secrets of success” turned out to be neither secret nor mysterious.

If I had to boil it down to one sentence, it would be this: The perfect investor is someone who plans for the future and is patient and deliberate in carrying out those plans.

Three words say it best: Planning, perspective and patience.

Or just two words: Good habits.

Habits govern our behavior in the background and let us move through life without having to think about the same decisions again and again.

Here are five habits that can help you be a better investor:

1. Setting goals

Successful investors know where they are going and set goals for getting there. Without clear, measurable goals, investors tend to dabble and hope something works.

Once goals are set, investment choices take on new meaning — like having a road map and a destination.

2. Create a plan — and stick to it

Successful investors make concrete plans and follow them. They revisit those plans periodically as circumstances and needs change. I recommend making this review a once-a-year habit.

3. Save regularly

Every adviser I interviewed agreed: regular saving is essential. You can’t invest money unless you have it, and you won’t have it unless you save it.

The best investors automate their savings through payroll deductions or scheduled transfers. If you want to be among them, put this habit on autopilot.

4. Live on less

Successful investors delay gratification and live below their means. This not only makes saving possible, it lays important groundwork for a successful retirement.

Many of the most successful investors take pride in proving they can live on less and still be happy — a mindset that pays dividends in retirement.

5. Stay in the game

Successful investors expect setbacks and stay invested anyway. Losses are inevitable; panic is optional.

The best investors habitually stay the course despite temporary declines. This resilience is a powerful — and learnable — trait.

Doing all this isn’t easy. If you want to be outstandingly successful, you must do what most people don’t.

The good news is that your habits are within your control.

One final piece of advice: Don’t expect perfection — from yourself or from the world. What matters most is doing your best and continually putting yourself back in the game.

That’s a habit worth nurturing.

Richard Buck contributed to this article.