Some of the best investing advice does not come from a super successful investor. It comes from a little known poet and philosopher that changed the world with new ideas. The advice comes from Ralph Waldo Emerson, he said this:
“As to methods there may be a million and then some, but principles are few. The man who grasps the principles can successfully select his own methods. The man who tries the methods, ignoring principles, is sure to have trouble.”
To examine this statement and see if it is true let’s go to Wall Street. If you look at the typical Wall Street investor you will see that they are working extremely hard. They put in anywhere from 70-90 hours per week and many reach the brim of a mental breakdown. They spend all of their time working, chasing methods and attempting to make the next million or billion. There is always a new method to make more money. The goal is to accumulate as much money as possible and as quickly as possible. The appropriate term would be a ‘Methods Investor’.
Next we have the other side of the spectrum. If we look at some of the most uber successful investors we will see that they do not spend much of their time on Wall Street. In fact, many of them recommend staying away from Wall Street. These are ‘Principles Investors’. They invest in sound, basic principles that gives them a foundation and guidelines for investing. The poster child for the ‘Principles Investor’ is Warren Buffett. Because he has this foundation and sticks to this he has became one of the wealthiest people in the world. Once they master their principles they can invest and still make tons of money without spending to much of their time investing. They have control of their time and money. A great way to describe a Principles investor is an investor that controls his money. A Methods Investor is more of a person that is controlled by his money.
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