9 Parenting Mindsets You Can Apply On Investing
If you have to worry all the time, you’re doing something wrong.
Parenting and investing in assets both focus a lot on supporting growth and carefully laying the foundation for a better future. Both require planning, decisive action, and sometimes good nerves.
Here are 9 things I learned from being a parent which comes in very handy when it’s about finding success with investments.
1. Set Up Rules And Stick With Them
One of the most important and fundamental things in raising a child is to define clear rules and to pay close attention to them. One key here is consistency.
When investing in an asset, it’s equally important to set up goals and to establish clear structures on how you want to accomplish them. Always know what to do in which situation. This includes not immediately dropping a plan if things don’t turn out the way you intended.
2. Control Your Emotions
“Dear, our son just puked all over his bed.”
“Children, which of you poured honey on the dog?”
“You told your teacher she is a WHAT?”
What can I say? Having children is not always easy. Things just happen.
It’s similar to investments. Sometimes things don’t go the way you want them to. In such situations, it is important to keep a cool head and analyze the situation and find a solution.
3. Be Flexible
Above I wrote about establishing rules and how important it is to adhere to them. But anyone who deals with children knows that unpredictable situations can easily arise. Sometimes an innocent question is enough to throw you off course. In such cases, it often makes no sense to stubbornly adhere to certain rules. Instead, you have to react spontaneously to new developments.
The same applies to investments. As important as it is to have a plan, you should regularly ask yourself whether it still makes sense to pursue it. Under certain circumstances, this can also mean that you have to change a plan from one moment to the next or even drop it altogether.
4. Be Realistic
Every parent thinks that their children are special or somehow better.
While it is important that we as parents believe in our children and support them on their way, we often forget that most people — our children included — are or will be pretty average.
It is the same with investments. Set realistic goals. Stop daydreaming that the token you bought will go 100X and that soon you can quit your job and travel around the world in a luxury yacht or a private plane.
5. Mistakes Are Part Of The Learning Process
Both children and parents learn from mistakes.
As parents, we need to share our experiences about the mistakes we made and what we have learned from them. This helps our children to grow and learn that if you try very hard, you can be very good at something.
The same is true for investments. Everyone has lost money at some point.
That doesn’t matter.
What matters is that you are able to understand why and how you lost. So you can do a better job the next time.
6. It’s OK To Ask Others For Help
“Daddy, my toy rolled under the sofa. Can you help and get it for me?”
“Mommy, why does it get dark at night?”
Children rely on their parents for many things — from helping out with everyday tasks to explaining how the world works. It’s not only children learning from parents but also vice versa. Often, proper two-way communication with your child is essential to understand what’s really going on.
As a parent, it is also important to ask for help. For example, let your relatives help you with taking care of your children or get advice from other parents on dealing with difficult situations.
Similar to a child, an investor also should be asking a lot of questions and turn to others for help. That’s because even as a pro, there is always new stuff to learn and take the next step in order to become better.
7. No Matter How Hard You Try, You Can Never Do Everything Right
For children, it is important to learn and understand that hard work pays off. But for all children there comes a time when they did everything in their power but still failed.
It’s a fact of life.
As parents (or grown-ups in general) we regularly have to accept that even when we did everything we could, it still didn’t produce the desired outcomes. We try to be good parents. However, the reality is that we still make mistakes. This also applies to investing.
Sometimes you think you nailed your research and found the perfect time to buy/sell, only to see everything falling to pieces.
Accept it and move on.
8. Focus On The Long-Term
Raising children takes years of hard effort. You will have to show up every day, whether you feel like it or not. Or maybe no matter how hard you try, your kid is not doing well in school and you still get called by teachers that your children have problems. But consistent work pays off, try to be patient with them and your children will thank you for it. Because it is through your work that you helped them to grow. In the long term, you will find that eventually, your child grows up to be a polite, caring, and responsible person.
It’s not a sprint but a marathon.
Patience is also the key when it comes to investing. It can take years for an investment to finally pay off. Similarly, it can take a very long time to make it through a bear market. But eventually, you will make it to the other side.
9. Good Stress Management Is Essential
Dealing with children as well with investments can be very stressful at times. When the pressure piles on it can be hard to make the right decisions. That is why it is important not to neglect yourself. Take time out regularly. Meet friends, pursue your hobby, just switch off for a while.