“Not one in a thousand people plans and acts as they must in order to truly build their wealth.” – Thomas Phelps

Investors dream of becoming rich. They say the right thing: be cautious, be restrained, and be patient. But their portfolios, and more importantly, their actions, tell a different story.

There’s an uncomfortable truth. Most investors don’t get big returns because they’re not really trying.

The problem isn’t intelligence or access to information. It’s the gap between what people say and what they actually do. Most investors seek comfort and social recognition. They over-distribute, check stock prices every day or every hour, and panic when markets fluctuate.

To make a huge return, you need a strategy that captures extreme outliers. A confident investment is a prerequisite. This means the guts to hold out even when stocks fall, and a 50% drop is not uncommon, even for a good company. This requires shutting down noise and accepting large swings in net worth. Also, you have to accept that it will look silly.

Most investors want a return, but not the inconveniences that enable it. So they own a lot of stocks little by little, and buy and sell too often. This feels reasonable because of the feeling of “doing something,” but it’s usually just trying to overmaneuver a portfolio, or fit into a market environment that is likely to be temporary.

If you really want extraordinary results, you have to pay tuition that comes in the form of enduring volatility and accepting social isolation.

What is the first step to making life-changing money from stocks? You start acting like a life-changing person.

@sidecarcap