You Must First Finish!
It’s my belief that the process of wealth creation is a combination of investment return plus the effects of investor behavior. Do your reactions to the stock market detract from your wealth creation? Meeting with a friend this week reminded me of the power of avoiding mistakes.
Warren Buffett, via race car driver Rick Mears, has shared the quote “To finish first, you must first finish.” Reaching the finish line is easier when you avoid excessive debt, sell in a panicky market, become a speculator vs. a long-term investor, lose your ability to adjust to a changing world, or frankly just quit too soon. Avoiding mistakes helps you “stay in the game.” Giving you time, the essential ingredient compounding requires to work its magic for you.