The Value of Mentors and Postivie Influences
Often Overlooked but Critically Important – Surrounding Yourself with Positive Influences and Finding Mentors to Guide Your Investment Journey. When I first started investing, I didn’t know much about finance beyond the basic idea that if I wanted to have money, I needed to save. Following advice from my bank’s financial advisor, I began investing in mutual funds. I had limited financial knowledge at the time, but I figured an advisor would guide me to make the right decisions.
Then came the 2008 financial crisis. My mutual funds were losing value quickly, and I intuitively thought that a market crash could present an opportunity to invest more and potentially benefit from the eventual recovery. After speaking with my advisor, I doubled my contributions, hopeful that my patience and added investments would pay off when the market bounced back.
However, things didn’t go as planned. Each month, I saw my contributions eaten away by falling fund values. I stayed patient as my advisor instructed, but after two years, my portfolio had dwindled from $70,000 down to just $50,000, despite my additional investments. I was frustrated and starting to doubt my choices.
Around that time, I became friends with an older gentleman who invested directly in the stock market. He enjoyed helping others understand finance, and we began talking about investing. I shared my ongoing frustrations with the markets, and after a few conversations, he suggested that my problem might not be the market, but rather what I was invested in. One day, he invited me to his home to see his actual portfolio, and what I saw changed my life.
He showed me his portfolio’s growth over the past two years. Unlike my account, his investments had recovered and were performing well. I learned that the market was indeed back to record highs, even as my mutual fund investments were still losing money. It was eye-opening. I realized that blindly relying on my advisor, without understanding my investments, was a mistake. From that day on, I asked my friend endless questions, learning everything I could about analyzing companies, valuing stocks, and—perhaps most importantly—developing a healthier mindset about money. His mentorship taught me the value of seeking knowledge for myself and the importance of finding positive influences to guide my journey. Here are the lessons I learned from that experience, and how you can apply them to your own investing life.
1. Positive Influences Matter in Investing
Surrounding yourself with positive influences, especially in investing, can transform your financial journey. Good influences provide wisdom, encouragement, and, when needed, constructive criticism. In the world of investing, the right mentors can guide you to make informed decisions, remain calm during market fluctuations, and focus on your long-term financial goals rather than short-term fears or excitement.
Investing can feel isolating if you’re navigating it alone, and it’s easy to make emotional decisions or follow market trends without fully understanding them. Positive influences—whether mentors, friends, or even reputable sources of financial information—help ground you, reminding you that sound investing is a long-term commitment.
2. Finding the Right Mentor: Look for Valuable Traits
Not every successful investor makes a good mentor. When seeking someone to help guide you, look for people with specific qualities that can positively impact your investment approach:
- Calm under Pressure: One of the most valuable traits in a mentor is the ability to stay calm when markets are volatile. Markets will inevitably have ups and downs, and learning from someone who doesn’t panic can help you develop the patience and confidence to stay invested.
- Discipline and Patience: Successful investors understand that building wealth takes time. A mentor who practices a buy-and-hold strategy can demonstrate how patience is essential for growing your investments. For instance, Warren Buffett has long held stakes in companies like Coca-Cola (KO) and American Express (AXP), holding steady even during market fluctuations.
- Long-Term Focus: Good mentors emphasize long-term potential over short-term gains. They look for companies with sustainable growth prospects, such as Microsoft (MSFT) or Johnson & Johnson (JNJ), which have provided steady returns over decades. Learning to think beyond the immediate can help you make more sound investment choices.
3. Connect and Engage with Mentors to Build Financial Knowledge
Once you identify potential mentors, look for ways to connect. Many experienced investors are willing to share their knowledge with those who genuinely want to learn. Here are a few ways to engage and build relationships with mentors:
- Reach Out through Local Groups or Online Communities: Investment clubs or local finance workshops can be great places to meet experienced investors. You may also find online forums or groups on platforms like LinkedIn where investors share insights.
- Leverage Books and Financial Content: If you can’t connect with a mentor directly, resources such as books, podcasts, and interviews by seasoned investors can offer valuable insights. Reading books by or about Warren Buffett, Peter Lynch, and other respected figures in investing can help you gain a mentor-like perspective.
- Stay Curious and Ask Questions: A good mentor will appreciate your eagerness to learn, so don’t be afraid to ask questions, even if you think they’re basic. Genuine curiosity is often the sign of a committed investor.
4. Learn from Mentors, but Don’t Imitate
It’s tempting to mimic the strategies of successful investors, but every investment decision needs to be based on your own understanding and research. My mistake early on was following advice without truly understanding it. Mentors can give you a solid foundation of knowledge, but the final decisions should always be yours.
When learning from others, use their insights as a base for your own research. For example, if a mentor suggests that a company like Apple (AAPL) or Alphabet (GOOGL) has strong growth potential, consider this an opportunity to dig deeper yourself. Look into the company’s earnings, competitive position, and industry outlook to ensure it aligns with your goals.
5. Analyze and Emulate Positive Traits to Improve Your Own Investing Approach
Beyond financial knowledge, the qualities that make someone a good investor—patience, discipline, and resilience—are also traits worth developing in yourself. Observing these traits in mentors or respected influences allows you to incorporate them into your own approach over time:
- Resilience during Market Downturns: Watching how calm investors manage their portfolios during downturns can help you avoid panic-selling. Remembering that someone you respect stayed invested can give you the confidence to do the same.
- Confidence in Speaking about Investments: When discussing investments with others, practice explaining your reasoning behind choices. This can build self-assurance and help you refine your understanding.
6. Build Your Personal Investment Philosophy
Perhaps the greatest lesson I learned was that true investing success depends on your ability to develop a personal philosophy—one that guides your decisions consistently. For example, Warren Buffett’s principle of only investing in businesses he understands has kept him focused and helped him avoid complex, risky investments. Finding a set of principles that reflect your values, risk tolerance, and long-term goals is crucial.
Investing in well-known, fundamentally strong companies like Amazon (AMZN) or Procter & Gamble (PG) could be appealing, but what matters most is whether these investments fit your goals. The right mentor can help you identify what’s important, but your philosophy will ultimately drive your choices.
7. Surrounding Yourself with the Right People for Growth
While finding a mentor is invaluable, it’s equally important to foster relationships with people who support and encourage your growth. Avoid influences that pressure you into “hot stock tips” or create anxiety. Instead, surround yourself with those who inspire confidence, challenge you constructively, and encourage you to keep learning.
Final Thoughts
Surrounding yourself with the right influences, staying open to mentorship, and remaining committed to self-education are essential for a successful investing journey. Learning from others can provide clarity, but true financial growth comes when you take ownership of your decisions. By staying curious, building positive relationships, and developing a personal investment philosophy, you set yourself up for long-term success.
Happy Investing!
