Money that I put in the market is generally the money that I don’t need in a time horizon of 3-5 years.
Then why does it happen that when the market is down 16%, I get anxious and I spend less, just as when my investments gain value during a bull market I feel wealthier.
This brings us wake up to the fact that stock market gyrations is all about your emotions and these emotions control your spending behavior.
The mindset alone can affect spending decisions because optimistic people are likely to spend more while anxious consumers are likely to spend less.
This bi-polar mentality is you key enemy, a major obstacle in generating wealth from the stock market. They say that rich people are no different from you and me, they were just plain lucky. I am pally with some of the rich people and I can tell you with surety that they became rich as they were able to make sound investment decisions that fetched them wealth more than the average.
Rich people are able to keep cool in the face of financial storm. They don’t get rattled. They happily collect the stocks at bargain prices, while most of us on the other hand get panicky.