KISS Is the Secret the Rich People Apply to Make Big Profits When Investing.
The hardest part is not understanding this secret but patiently applying it.
The extremely high inflation that is set to last in America and the rest of the world is leading more and more people to look for solutions to protect the fruits of their labor. Indeed, keeping all your wealth in cash is a guarantee that you will inevitably lose purchasing power.
Therefore, you must invest. Whatever markets you choose, you must find a way to make your money work for you. Remember Warren Buffett's famous quote:
“If you don't find a way to make money while you sleep, you will work until you die.”
When entering the market, novice investors have a natural tendency to have stars in their eyes and look for more exotic investments that promise too good to be true returns. They will look for strategies and complicate what should not be in reality.
To understand why you shouldn't complicate what should be simple, I urge you to look closely at how the ultra rich invest their money. Aside from their private equity investments, which can be difficult for the average person to access, the ultra-wealthy invest the majority of their wealth in real estate, and in stocks that they buy at market lows and then hold for the very long term.
These wealthiest investors are not looking to time the market, nor are they looking to trade short-term.
Even the wealthiest investors who come into the crypto-currency world take this simple approach. They mostly buy Bitcoin, and sometimes Ether, but leave it at that. They don't want to take risks with a shaky project like Terra that could collapse at any moment.
Once they've bought Bitcoin or Ether, these wealthy investors will be patient by redefining their time horizon to focus on the long term. The wealthy are willing to wait more than 10 years to take full advantage of the Bitcoin revolution.
The reason the ultra-rich are doing this is because they understand that to make big profits, all they have to do is apply the KISS principle well known to computer scientists: “Keep It Simple and Stupid”.
Many average investors have heard of this acronym, but very few apply it. As I wondered about the reason for this difficulty in keeping it simple and basic, I was reminded of this answer from Charlie Munger to a young man who asked him one day at a Berkshire Hathaway meeting for his best advice on wealth creation:
“The first $100,000 is a bitch, but you gotta do it. I don't care what you have to do-if it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.”
Charlie Munger's quote is from the early 1990s. With the endless collapse of the U.S. dollar, you can consider that $100K back then represents between $200K and $250K today:
What Charlie Munger tells us is true. It's harder to generate first big profits because you tend to be more impatient than more seasoned investors. Your eagerness will drive you to seek out more exotic investments that are more dangerous.
This will be detrimental, as you will risk wasting even more time, whereas the simplest is often the most lucrative and profitable if you know how to be patient. The key is to get into the habit of applying the KISS principle to the letter from the very beginning of your investment adventure.
If you do this by being patient, then you are sure to be one of those who will make big profits and be able to beat inflation.
Once you have made your first big profits, i.e. reached the $200K mark, you will have enough confidence to allow yourself to stay on the beaten path that has given so many other investors before you. It's not as sexy as the returns that some people promise you over 20-30% for their investment opportunities, but it's a lot safer.
So now you know the path you need to take to maximize your chances of profiting from your investments. It's up to you to put it into practice.
Some reading
5 Reasons Why New York State’s Attack on Bitcoin Mining Is a Historic Mistake. New York State will be the first victim, not the Bitcoin network.
The 5 Big Reasons Why Bitcoin Will Be a Major Force for Good in the Fight Against Climate Change. You must learn to go beyond the clichés and lies propagated by the powerful at the head of the current system.
Want To Know How To Trade Bitcoin With Success? Follow the Whales. An interesting phenomenon to observe for several weeks now.