No one would consider starting a business, a nonprofit, or even a needlepoint project without asking themselves, what is my objective? However, when it comes to investing most people don’t think twice before ploughing money into financial markets. They never ask themselves the most important question: Why am I risking capital in the financial markets?
It’s about Creation
There is no end to the financial goals people hope the financial markets can help them achieve: investing for retirement, pay for college, or buy a house. But no matter what your motive, the ultimate goal is the same, wealth creation.
You might be saying to yourself, “I don’t need to create wealth, I’ve already built a nest egg and just want to hold on to what I have.”
Well, unless you’re interested in having the purchasing power of your present wealth cut in half over the next 20 years, then you’re going to need to create some wealth. That statement is true whether you’re worth $1, $1 million, or even north of $10 million.
While we’re all after wealth creation regardless of our place on the ladder, the greatest difference between investors is the annual rate of return that each of us believes is acceptable.