020 You Have the Power to Change: Saving Money is Hard, Part 2

When your investment portfolio takes a turn for the worse, how do you react? Are you a "stick it out" type -- or do you "panic sell?" Do you believe that you "got screwed by the market" -- or do you take action to set up future trades in a way that prevents a big financial loss? It turns out there are two very different types of people in this world, and when it comes to investing and building wealth you're more likely to be successful if you're one and not the other (or if you can train yourself to be that person). This person has an "Internal Locus of Control," meaning they have the knowledge and the power to take control of their finances and achieve their financial goals to live their Dream Life. In the first half of today's episode, we talk about how important it is to be confident in your abilities so you can avoid repeating stupid mistakes, and stay on track to building wealth in your lifetime.



In the second part of today's episode we reveal why all the talk about -- and online quizzes designed to measure -- your "risk tolerance" when it comes to investing is all wrong. In reality, the way you respond to risk and loss rarely matches what you think about risk when you start investing, and for that reason you can basically throw out the results of these quizzes. Instead you should focus on two very important questions: how do you react to risk and loss, and how much risk can you actually afford to take? Too many brand new investors use the quizzes and invest in risky assets, but never take the time to determine if they can actually afford the risk. Learn how to make better risk decisions with your money by tuning into today's episode!



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