Just four decades ago, most people had never heard of a computer. The internet was just a flicker in some engineer’s eye and the stock market was the exclusive domain of the rich.

The current situation has turned all that on its head. Today, everyone and their child has a computer, the internet is ubiquitous and the average man-on-the-street is invested in the stock market — even if it’s just through a company pension fund.

Stock market wealth

That means you have all the tools necessary to build your wealth in the stock market without having to rely on anyone else.

But you need to know what you’re doing.

If you learn how to invest correctly, you can have more, do more and eventually spend your time as you like rather than spending it doing what someone else tells you to do.

You see, just because you have access to powerful tools and financial data, doesn’t mean you know how to use them. Consider a well-stocked kitchen with the latest gadgets and the freshest ingredients. You can throw a thousand people into that kitchen and give them access to everything the kitchen offers, but not everyone will be able to make a tasty meal.

Some will not be able to make anything. Most will be able to come up with a satisfactory, yet average, meal. Only a few will be able to combine the ingredients and use the correct gadgets in a way that creates fabulous meals again and again and again.

If these few write down the recipes for their creations, and you’re fortunate enough to get your hands on these recipes, you could also create fabulous meals, even if you’re just an average cook.

The good news is some of these talented investing “chefs” have done exactly that.

Warren Buffett has written down his “recipes” for decades. Charlie Munger too. Benjamin Graham wrote entire books on the subject. So there’s absolutely no reason why someone today can’t invest successfully in the stock market and become wealthy.

The tools are there and the instructions to use these tools properly are widely available.

But can value investing work specifically for you?

Well, consider what you would do if you wanted to become a hockey player or learn a musical instrument. You’d most likely learn the skill and then spend lots of time practicing. Investing is similar. You can learn to invest properly and then spend your time investing, making minor course corrections when necessary and continuing to build your skills in the investing arena.

I’ll repeat, investing correctly is something you can learn. And the advantage is that when you learn to do it the right way, it has the ability to change your life, for the better, to a far greater extent than playing hockey or mastering, say, the guitar can do.

It doesn’t matter if you’ve had investing disasters in the past or you’ve vowed never to put another dime into the stock market. The only question you should be asking yourself is, “am I willing to learn the correct way to invest?”

If you master Buffett’s value investing strategies and put them into practice, you’ll most likely retire rich.

Of course not everyone is suited for value investing. Some people simply want action. They NEED to be in and out of the market, they’re addicted to the adrenaline rush that comes with having lots of money on the line. These folks aren’t investors. They’re speculators. And value investing will never be something that will make them happy. They’ll also end up losing most of their money in the stock market, but the buzz they receive along the way will ensure they keep doing the same thing over and over again.

So which are you? Are you an investor? Or are you a speculator?

Once you’ve answered that question you need to determine if you really have the desire to be wealthy. Most people don’t understand this at first, if ever. “Of course I want to be wealthy!” they’ll say. However the desire to be wealthy means looking at what you’re doing and changing your actions to follow paths that will lead to great wealth.

It’s about taking smart, coordinated and well-planned-out actions. Actions that might be uncomfortable at times. Actions that might go against your nature. But if you really desire to be wealthy, you’ll take these actions nonetheless. If you don’t, regardless of what you might say, you’ll bail out at the first sign of trouble or of something that makes you uncomfortable.

At the end of the day, if you’re going spend time and effort investing your money in the stock market, you might as well become wealthy doing it. Otherwise, what’s the point?

For a solid overview on the steps you need to take to invest correctly, see my book, “The Pragmatic Investor.”

 

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