For me personally, investing is much more than just increasing capital. It’s a special way of thinking. An attitude that is similar to successful entrepreneurship.
This is what defines my mission statement – and I call it: Entrepreneurial investing
An entrepreneurial investor does not view the capital market as an object of speculation, but as an opportunity to create long-term value.
Entrepreneurial investors pursue a strategy based on personal responsibility, personal development, foresight and systematic analysis.
In this article, I look at my entrepreneurial investor mission statement from two perspectives:
- One is about thinking and acting entrepreneurially on your own behalf
- The other is about viewing investing itself as a kind of “role play” in which you take on the role of an independent investor.
1) Thinking and acting entrepreneurially on your own behalf
An entrepreneurial investor should always starts with himself/herself. Personal development and self-reflection are a very important foundation for successful investment decisions.
Investing in yourself
The entrepreneurial path does not begin on the stock market, but first of all with ourselves. Every successful investor is also a successful learner.
This means investing particularly in following aspects:
- Lifelong learning: specialist knowledge about markets, companies and economic relationships is essential. Lifelong learning not only expands knowledge, but also sharpens the ability to make informed decisions. This can be done through formal education, workshops or reading relevant literature. A well-informed investor is better equipped to recognize opportunities and weigh up risks.
- Health as a foundation: Physical and mental strength ensure clear decisions and make you stay cool in turbulent times.
- Improving your skills: Financial management, analytical thinking, decision-making – just to name a few. Mastering these skills is crucial to makt it through life.
- Build networks: Exchanging ideas with like-minded people promotes new perspectives and opportunities. This enriches your personal development significantly.
Finding your personal and financial WHY
Those who do not pursue a clear goal often act irrationally. It is therefore crucial to understand your own motives for investing. Ask yourself: Why am I investing? What goals am I pursuing?
A clear understanding of your motivation helps you develop a coherent strategy and stay disciplined, especially during turbulent market phases. Questioning your own motivation helps to build discipline and perseverance.
Some more important questions that you should ask yourself:
- What drives me? (e.g. financial independence, freedom, security for the family)
- What lifestyle do I want to live?
- What values are important to me? (e.g. sustainability, innovation, social contribution)
Set clear life goals
Imho, an entrepreneurial investor should define measurable and realistic goals. These goals should be long-term, but can also have a short- and medium-term character. These goals can be both financial and personal in nature.
Just to name some examples of long-term goals:
- Achieving financial independence
- Building a robust pension plan and securing retirement
Examples of financial goals:
- Generating a passive income of X euros per month
- Build up an asset portfolio of X euros in Y years
Examples of personal goals:
- More time for family and hobbies (through financial independence)
- Constantly expand your own knowledge of the markets
Sharpening your judgement skills
Investing requires smart and well-founded decisions. These depend on the ability to analyse information critically, evaluate it objectively and predict long-term developments.
This includes:
- Critical thinking: not following every hype, but analyzing independently.
- Risk awareness: Realistically assessing opportunities and risks.
- Patience and discipline: Accepting short-term setbacks as part of the process.
- Recognizing prejudices
- Avoiding emotional decisions.
A sharpened sense of judgement minimizes missteps and maximizes chances of success.
Risk management and resilience
An entrepreneurial investor understands that risks are part of investing. So I think it’s important to identify and assess them and develop strategies to mitigate them. At the same time, resilience should be built up in order to cope with setbacks and emerge stronger.
Using your own “entrepreneurial” professional experience as a model
In my previous article, I have elaborated on my target audience: self-employed experts and solopreneurs. You know what it means to take responsibility for your own business success. Now you can show that you have what it takes when it comes to investing. Your own entrepreneurial experience will be a huge benefit for this.
In your own professional business, you know what it means to handle money carefully. You can apply this principle also to investing: Investing your own hard-earned capital responsibly, increases the motivation to successfully complete your investments.
2) Entrepreneurial investing as a “role play”
Now crawl inside the mind of an independent investor. You invest your own money in promising companies and you have clear expectations. This “role play” requires discipline, knowledge and a strategic approach.
The role of the independent investor
In my personal definition, an entrepreneurial investor does not see himself/herself as a gambler or speculator, but as an investor who uses his own (!) money to support companies in order to promote growth and generate returns.
Investing in a company in the form of stocks is not a speculative business. A stock is not an object of speculation, but a piece of entrepreneurial ownership. To be more precise: Investing is about collective ownership of businesses.
This perspective makes it possible to evaluate investment opportunities from a business perspective and make strategic decisions.
By investing selectively in high-quality companies with good track records in revenues and profits, successful business models and good prospects, we will share in the success of those companies and make our own steps towards financial independence and freedom over the years.
Some general questions everyone should deal with:
- Which company deserves my capital?
- Do I have confidence in the company management?
- Are the economic conditions attractive?
Investing on your own responsibility
Successful entrepreneurs don’t leave their decisions to chance. Likewise, every investor should act on their own responsibility and not rely on third parties. Therefore: Take full responsibility for your investment decisions!
This means:
- No blind imitation: critically scrutinize recommendations from analysts or the media.
- Develop your own strategy: Do your research independently. Define clear criteria for buying and selling decisions.
- Control emotions: Things like FOMO (Fear of missing out) or greed are the biggest enemies of rational decisions.
- Personal responsibility strengthens confidence in your own abilities and leads to more informed decisions.
Analyze quality companies
Use both fundamental and technical analysis to evaluate potential investments.
Fundamental analysis focuses on assessing the intrinsic value of a company based on financial ratios, while technical analysis looks at price and volume patterns to predict future price movements. A combination of both approaches provides a comprehensive picture and supports informed decisions.
Fundamental analysis is crucial to identify solid companies. Following factors play a strong role here:
Fundamental analysis:
- Business model: is the company sustainable in the long term?
- Key financial figures: Sales growth, profit margins, debt etc.
- Competitive advantages: Does the company have a strong market position?
Technical analysis:
- Chart patterns: recognize support and resistance zones.
- Trend analysis: When is a good time to enter the market?
- Market sentiment: Consider investor sentiment.
Providing capital and expecting a return
Investing means providing capital and expecting a reasonable return. This requires patience and discipline, as high-quality companies may not deliver high returns immediately, but can offer stable and growing returns over the long term.
Following aspects should always be considered:
- Long-term thinking: successful investing is not a short-term speculative business.
- Risk diversification: Diversification across sectors and regions.
- Disciplined follow-up: Regular review of your own investments.
Diversification and portfolio management
A diversified portfolio reduces risk and increases the chances of stable returns.
Spread your investments across different sectors, regions and asset classes to benefit from different growth opportunities and minimize potential losses.
Continuous monitoring and adjustment
The stock market is dynamic, so it’s important to monitor your portfolio regularly and make adjustments where necessary.
Stay informed about market trends, company developments and economic indicators so that you can react proactively to changes.
Conclusion
As an independent investor who carefully examines quality companies and invests on your own responsibility, you can achieve sustainable returns and reach your financial goals.
However, the entrepreneurial investor is much more than a market participant – they are an investor with a clear plan and a long-term perspective.
The path of the entrepreneurial investor requires a combination of personal development, knowledge of your own motivation and sound strategic investing.
With this foundation, you will achieve long-term financial success and lead a more fulfilling, self-determined life.
Ultimately, investing is a journey where knowledge, discipline, personal responsibility and execution are the keys to success.