How To Make Money
Buy Low and Sell High

At some point, most people ponder about how to make money outside of their ordinary income. And while the old saying “buy low and sell high” sounds easy enough, it can be hard financial advice to follow.

For instance, with the stock markets at all time highs, are people selling? The short answer is “no”.

Maybe it’s time to take some money off the table…

If you listen to the great investors, they all say, “don’t lose money.” Why don’t people follow that advice?

It seems like everyone is looking for the shortcut to striking it rich, but there really isn’t one. And what makes it worse is that timing the markets is more complex than it seems.

So, how does someone make money in the market? The truth is there are numerous ways to make money that don’t include market investing.

Timing vs Time In

In the real world, “timing” does not compare to “time in”. With consistent compounding of your money, timing is not as relevant.

Sure, everyone wants to own the stock or asset that goes up dramatically in value and to sell it at that perfect time for huge profits. But, the reality is most investors don’t.

You can’t time the markets. However, you can take advantage of opportunities in the markets to buy when prices are low. IF you have liquidity, use and access to your capital.

Others will argue, “I’m dollar cost averaging”… This typically means their regular contribution to their 401k or IRA invested in a mutual fund every pay period.

BUT, it’s the same mutual fund managed by the same “wealth manager”, sometimes referred to as a babysitter.

Buy Opportunities

Buying opportunities means researching and waiting patiently on the right time to buy. And, though most will wait on their IRA/401k for 20-40 years, they can’t wait until next year for an opportunity to buy at the right price.

Smart investors look for well managed companies or assets that are undervalued. A smart investor buys assets when the prices are low, then patiently waits until prices rise and sells at the most opportune time.

If you want to be wealthy (rich), you have to educate yourself on money and how it works, through financial education. Once you become an expert on a particular field or market, then you can look for opportunities of growth.

Sell for Profits

When I meet with people, I often ask them, “How do you make money in the markets?” Rarely does anyone answer, “when I sell” or “when I realize a gain” or “when the timing is right”. Most invest blindly by turning their money over to someone else and hoping for the best.

So, why don’t people take advantage of selling opportunities? Many will say they don’t have time to watch the markets daily or that they’ve been burned before, so now they just try to pick a good mutual fund and trust their financial adviser.

The Problem

Most financial advisers sell what their company tells them to, and they profit while investors take the risk.

Typical investors have a herd mentality. They see a stock pick on the money channels and do what everyone else is doing.

Smart investors wait and often do the opposite of what everyone else is doing. They buy when prices are low and sell when prices are high.

The basic concept is to buy assets when they are “on sale.” That means buying when others are selling or prices are down.

Unfortunately, most investors chase trends and follow the herd. They let emotions govern their investing.

A Better Way to Make Money

Fortunately there is a better way to make money without taking risks: a simple method that allows uninterrupted compounding of money while it’s being used to purchase assets that are probable to increase in value.

There are literally infinite ways to make money. The market is one complicated way that involves many risks and uncertainties.

Here are the 3 most common ways that people make money outside of earning wages:

• Business
• Real Estate
• Stocks

Perhaps there is an even better way to make money…

“There’s one investment that supersedes all others, invest in yourself.”

Warren Buffett

Emotional and Irrational

On the surface, investing may sound easy, but anyone who has ever tried to time the markets will likely agree that it can be hard. And though we may want to buy low and sell high, that goes against our natural instinct to do what everyone else is doing.

When we hear that the market is falling, we want to sell and cut our losses. But, when the market is rising, people tend to want to buy to get in on the profits.

This is because we have a fear of missing out. And, most investors simply do not know when the best time is to buy or sell.

Owning a declining stock can feel like being lost at sea on a sinking boat. It requires discipline and effort to overcome the waves of emotion that prevent us from plugging the holes and making decisions that are in our own best interest.

Unfortunately, most continue to make the same mistakes over and over again, because they do not have the patience and discipline to learn and prepare for buying and selling opportunities.

Risk Tolerance

Risk and fear play a major role when investing. And once someone experiences loss, their tolerance for losing money typically declines.

When trying to avoid the losses and capitalize on profits, simply trying to buy low and sell high is not enough.

We have to learn from our mistakes, but we can’t be afraid to make them. We can also learn from other people’s mistakes.

You only fail when you don’t learn from your mistakes and make them over again.

“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”

Robert Kiyosaki

The Best Kept Secret of the Rich

Don’t spend too much time and money on things that don’t count. Spend your time and money on things that do count.

These are things that anyone can do and master. In today’s world, you can become an expert in the basics of any trade by reading, usually for free.

Find your “why” and focus on your talents.

Master the basics, work on the fundamentals.

I hope this post inspires you to take action on your goals and dreams. Don’t worry about how to make money, instead focus on why you want to make money.

Find out how a custom-built financial strategy could help you reach your goals and dreams, without unnecessary market risk. Schedule a quick discovery meeting so I can learn more about your goals and help you get started.

Until next time,
Barry Page
Your LIFE Advocate

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives. And shows families how to protect their assets, income and lives using a unique approach to financial planning.

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