Being a “young” or first-time investor, it is easy to develop a “money narrative“. Just imagine how your money will work for you being invested with a reputable money manager! This is how the expectations often overrun the reality. In this way, the road to your first major mistake is short. Namely that you start thinking that your investment will make you really rich. You imagination will visualize how your life will materialize for the better. Therefore, if you recognize yourself in this pattern, time is in to ask: What is your real reason for investing?
By working in the financial industry, we have far too often seen how much money people don´t have. On one hand, your advisor, or money manager, have a clear responsibility. That is to clearly inform what you are investing in. As a consequence, you will need to understand that there shall be no expectations involved other than the reality. This is the major point not to create a money narrative. In addition, Forex trading is in particular connected with some of the biggest myths in financial trading.
Past performance is no guarantee for future profit. Even if the underlying asset has a magnificent performance there is no guarantee for similar future performance. Do not get fooled if the past performance over-goes your expectations. A consistent past performance can be indicative for future returns. However, in investing there are never any guarantees. Any investment proposal includes risk. Risk is a variable concept that will depend on the market situation. In fact, if your money manager does´t provide you the standard investor warning you should probably look for a different manager. Risk is involved in any type of investment and you may risk to loose all your investment.
Be responsible for your own money narrative!
A common goal for investing is long term growth. Most professional investors declare that they can afford to loose the complete investment. Bigger expectations to achieve material goods fast are almost never a part of any investment perspective. Thus, if you still have such an outlook you might re-consider your perspectives.
Some of the major business principals in the world have established a considerable cash-flow for themselves. However, their results are not coming from investing solely. It is coming from hard initial work with their business plan. They have made a choice. Such a choice is often based on sacrifices, not investing. As a result, business principals and high net worth individuals are looking for long term growth of their assets. This choice of creating a cashflow from hard work is open for you as well. However, keep in mind that big wealth doesn´t come from investing alone.