Do you want to start investing but maybe you are unsure about whether to just jump in feet-first or whether to buy some books or training courses or go to some seminars first? In which case this article is for you. It’s one of a series of investing articles. This one looks at the different learning preferences that we all have and it answers the question: “What is the best way to learn to invest?”
Now of course you could just go out and “do it yourself”. You could buy an investment property or buy some shares and just learn how to invest as you go along. The disadvantage with that is that they calculate that it takes about ten thousand hours to become an expert in something. And, as it is your money, wouldn’t you rather have an “expert” looking after it? By learning from other people you can save a considerable number of those 10,000 hours.
By learning from others you will also be able to minimise your errors. And of course with investing what we are talking about with “errors” is losing money so you should be able to stop a considerable number of losses and save a considerable amount of money by learning from the experts. A good friend of mine did teach himself how to become an investor. He says it cost him about $100,000 in errors along the way. He’s a good investor now but it was a very expensive process. So, find someone to learn from!
The other thing you will achieve by listening to other people is you will learn some really good ideas. When you learn different ideas from people who are looking at things in a different way to you, they will help you to come up with your own ideas about new or improved strategies that might really work for you with your investing. After all, the compound effect of a small financial improvement in your results each month can make a huge difference to your bank account over time.
In terms of learning, there are three different “preferences” that we each have when learning things: visual, kinaesthetic, or auditory. We all have a little of the three but we each have a preference in one particular area.
So, for instance if you have a visual preference (which just over a third of people have) then you will prefer to learn through pictures and images. People with a visual preference will often say things like they want to know how something “looks”. Sounds and feelings are not so important to visual learners. So somebody who is a strong visual learner won’t be easily distracted by sound.
People who have a preference towards kinaesthetic learning prefer to learn by doing and touching and feeling. So they will learn by doing things and by “working things through” and they will want to know if things “feel” right. And again, just over a third of people have that preference.
The third preference is auditory which applies to a smaller group of people. Less than a third of people are auditory learners. They learn by listening to things and they memorise things by going through the steps and sequences. They will want to hear about how things “are”.
When you understand your own particular preference, then you can look for the learning methods will work better for you. So for instance, videos and DVDs are great for people who have a visual learning preference. Workshops work well for people with a kinaesthetic learning preference. And written (or spoken) instruction manuals work well for people with an auditory preference.
Now of course good training will usually include a mixture of visual, kinaesthetic and auditory training. Take a seminar for example. You might watch the presenter and do the exercises he/she sets and listen to the instructions that he/she puts up. In this way, the training can work for all of us … and it also stops us becoming bored with one method of delivery!
When learning, the environment is also important. Again we all have different preferences. So for instance, a kinaesthetic learner would be more focused on temperature whereas other people would not mind so much what the temperature was. So make sure that the environment is right for you. For some people learning at home is really great because they can make the environment pretty much what they want. You can lock yourself away in a room and have everything exactly the way you want it to be. So homestudy training courses that combine DVDs and books are often a great way of learning.
And then there is who to learn from? After all, there are hundreds of people out there offering training and there are thousands of investing books. In my experience, the best people to learn from are the ones who actually have the results that you want to achieve. So start off by finding out what that person has actually achieved. And only listen to the people that have achieved things that you also want to achieve.
The third component in effective learning is through a commitment to continuing improvement. By committing to continuing improvement you will become a better and better investor, even if all you can commit to is an hour a week. That is a more effective way of learning than, for instance, taking a week out to become an expert in XYZ strategy. Over time you will forget much of what you learn that way but with continual improvement you will find yourself applying the things that you learn as you learn them and they will become good habits.
So, go out and investigate the experts, find the ones those have already achieved the results that you want to achieve and then start applying what you are learning. The sooner you start learning (and applying what you have learnt), the sooner you’ll achieve the results you want from your investing.
By the way, you might be able to spot the learning preference that I have from the way that I write … care to take a guess?