Investing isn’t easy. In fact, becoming a good investor is part art, part fundamental and technical analysis, part psychology and, let’s face it, part luck.
Last week, I gave a presentation to a very attentive audience at the Las Vegas MoneyShow that I titled, “How to Invest Like a Renaissance Man.” The goal of this presentation was to help people identify some of the key characteristics that I think are necessary when approaching money decisions (as well as life decisions).
I received a lot of great feedback from those in attendance, many of whom said the presentation helped them look at things from a different perspective. This was gratifying to me, as helping people look at things differently is one of the goals of my writing. And, if that goal also serves to help people become better investors, then it’s a one-two punch of positivity.
This week, I thought I’d share some of the key principles of my presentation with you. I hope you find them interesting, and I hope they help you look at things from a different perspective.
First, let’s define what I mean when I use the term “Renaissance man.”
To me, a Renaissance man is an outstandingly versatile, well-rounded person. He (or she) is someone who uses both the left and and right side of his brain when making decisions. He’s also someone who seeks to develop skills in all areas of knowledge, in physical development, in social accomplishments and in the arts.
The way I see it, there are several key traits that characterize a Renaissance man. Perhaps first and foremost, a Renaissance man is curious. He wants to know about things, he wants to understand and he’s constantly in search of information.
Next, a Renaissance man is a risk taker. Never content to just let the wave of life wash over him, a Renaissance man grapples with life’s joys and difficulties the way an anaconda grapples with its prey. He stalks it, waits for the right moment to strike, then squeezes the life out of it before consuming it whole.
A Renaissance man also must have perseverance and self-discipline. It’s not enough to just be curious and to simply take risks. A Renaissance man also must fight through the inevitable adversity that is existence, and the only way to do that is to persevere and employ a heavy dose of self-discipline.
A Renaissance man is creative. Not content to just do what the crowd does, he is one who makes mental connections and sees relationships and reality through the lens of new opportunities. This is particularly important when investing, as those who can see — and invest — in opportunities likely to ignite a wealth-creation explosion will often be handsomely rewarded. Just ask the people who invested in Amazon.com (AMZN) in the 1990s, or in Bitcoin just 18 months ago.
Perhaps most importantly, a Renaissance man is always learning. You see, no matter how much success you have, or how great your expertise in a particular field is, you must never stop learning in life. A true Renaissance man embraces the process of learning, and in the doing he finds meaning in existence qua existence.
Now, how do we apply these principles to investing?
Well, first, we must learn to know ourselves. A Renaissance man seeks self-knowledge, which means he needs to know what he’s good at and what he’s not so good at.
Some investors know themselves well enough to know they must be in tight control of their money. They need to do it themselves. While they’ll take advice from trusted sources and experts, they want to be the ultimate decision makers. I can identify with this group because I would place myself in this camp as well.
Now, other investors know themselves well enough to realize that when it comes to making decisions and/or following a plan, they aren’t generally too adept at such tasks. This mindset is more common than any other I’ve come across in my two decades in this business.
Here, too, I can relate, as I am not adept at making decisions on my own when it comes to subjects I’m not well versed in. For example, a recent home repair/remodel project was outside of my expertise, so I relied on my best judgment to hire the right professionals to do the job. Fortunately, my new bathrooms came out the better for it.
Finally, perhaps the most important lesson regarding how to invest like a Renaissance man comes down to the Shakespearean premise: “To thine own self be true.” What this means is that knowing yourself, your tendencies as a thinker, as a decision maker and as a risk taker can be your greatest asset.
Conversely, not knowing yourself, not being curious, not being willing to take risks, not seeing things creatively and not always striving to learn can become your biggest liabilities.
To really be successful, you must cultivate a Renaissance man mindset.
Will you encounter failure along the way? I guarantee you will. Will that failure teach you something about yourself? It will… if you let it.
On Worthless People
“Worthless people live only to eat and drink; people of worth eat and drink only to live.”
The wisdom of Socrates reminds us that accumulating wealth is not an end in itself. Rather, wealth accumulation should be looked upon as a means to an end, and that end is living a full, interesting and glorious life. In fact, it is just the kind of life that a true Renaissance man aspires to lead.