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The New Retirementality: Planning Your Life and Living Your Dreams... At Any Age You Want by Mitch Anthony

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Chapter 20. Wealth-Care Checkup FACING INVESTMENT REALITY

Rule #1—Never lose money. Rule #2—Never forget rule #1.

Warren Buffett

A boy with a cocoon came to a farmer. "Look," he said, "the moth is trying to get out. I think I'll help him."

"Don't do it," the farmer said. "Let nature take its course."

An hour later the boy returned with a dead moth in his hand. "Why did he die?" he asked through tears.

"Because you gave him too much help," replied the farmer. "The moth gets his strength for life through the fight out of the cocoon. He needed to do it on his own."

Getting our financial wings is not going to be easy. We make mistakes, we struggle, we question ourselves. There are hard lessons to learn, but those that come the hard way seem to have the most sticking power. Anyone who tells you building wealth is easy hasn't lived outside a raging bull market.

If mastering the stock market and making our money grow were easy, we would all be multimillionaires. It is possible to become a successful investor if we can avoid some of the self-sabotaging mental traps that deceive today's investor. The saboteurs are an overconfident mind-set, a vulnerable emotional state, and a naïve psyche.

Following are five common mental errors that have infiltrated the modern investor landscape like a plague.

Investor Error 1: People Think They Are Smarter Than They Are

Bull markets provide fertile ground for feeding into the hubris of individual investors. If the stocks they pick skyrocket, they are geniuses; ...

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