Investing Mistakes

Do you make these mistakes in the stock market?

Don't worry, you're not alone - most investors are making these mistakes (and for the longest time, I did, too).

But the good news is you don't have to keep making them . . .

Investing Mistake #1 - They Don't Understand What Investing Really Is

Investing is ownership, plain and simple.

In the framework of the stock market, when you invest you become part owner of a real actual business with real actual customers buying real actual products and services.

If you "invest" in mutual funds or index funds, you're not actually investing - how can you be an investor if you don't even know what you own?

Here's an ugly/liberating truth (depending on what side of the equation you find yourself) - you either own, or you are owned.

We're not talking literal slavery here. What you own - or are owned by - aren't other people, but the economic system itself.

The secret to financial freedom is to figure out how to acquire more and more ownership of income-producing parts of that system.

Investing Mistake #2 - They Don't Realize the Profound Power of Owning Quality Businesses

If you were going to start your own business, or buy an existing private business, wouldn't you want it to be the best business possible?

Of course you would - because you know your livelihood and lifestyle (and your family's long term security) would depend on it.

It's no different in the stock market.

If I can own dominant, high quality, world class businesses that consistently grow their earnings and increase their dividends (i.e. passive owner's salary) every year like clockwork, why would I settle for anything less?

Investing Mistake #3 - They Assume Financial Professionals Know What They're Talking About

This one drives me crazy.

It's probably the most important lesson I've ever learned in my life.

And I'm not just talking about investing here - I'm talking about all aspects of your life.

Don't assume that so-called experts in any field - investing, legal, religious, parenting, whatever - know a whole lot more than you do.

Make them prove it to you in some way before you just passively assume they know best.

And even if they do "prove it" you still shouldn't just passively accept everything they say - make sure it truly resonates with you.

The great German playwright, poet, and philosopher Goethe said it best: "As soon as you learn to trust yourself, you will know how to live."

Soooo many times I have deferred to the judgment of others in positions of authority because I simply assumed that their job title alone qualified them as "experts" - and then later regretted it.

Investing Mistake #4 - They Don't Realize That Conservative Trading + Conservative Investing Can Dramatically Add Up

Ultimately, this goes back to the old "either-or" mentality.

And this is probably the second most important lesson I've learned in my lifetime.

When you assume that something must be one or the other, then you have effectively allowed other people to define your reality.

The more areas of your life that you can replace "either-or" with "both-and" - the more successful and fulfilling your life will become.

Investing Enlightenment

How this specifically relates to building real wealth and an ever-increasing income stream in the stock market is the realization that you can indeed combine the best attributes of trading with the strongest qualities of investing.

And here's the big takeaway - when you combine conservative option trading with conservative investing (i.e. owning the best businesses in the world) it's not addition we're talking about - it's multiplication.

Value Investing + Option Trading - when done right - isn't just A + B.

It's A times B.

It's not just short term returns and long term results. It's consistent, short-term returns that exponentially increase long term results.

How To Invest Instead

I can't tell you what investing or trading approach is best for you, but I can share with you the approach that's been the best one for me.

Value investing with options has profoundly changed my own life.

It rescued me from my dead-end cubicle career where I was stuck in a job that I hated for the last 6 1/2 years out of the 7 that I was there (but, too my credit, had always been too stubborn to quit).

Value investing with options - as I advocate, teach, and devote myself to it - is about acquiring as many shares as possible in the highest quality businesses you can identify at the (thanks to customized low-risk option trades) lowest prices possible.

(Think discounted, heavily discounted, and free.)

Do you HAVE to own stock?

While I certainly recommend it - you should not underestimate the power of capital appreciation - it's not literally required.

But, yes, you are free to use the principles of Leveraged Investing to customize your own high-yield, low risk option income operations.

The first step, of course, is to learn those principles and strategies yourself - and the sooner the better.

Each day you're not value investing with options is another day you're not trading or investing with an advantage.

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