Keep Calm and Invest: Build Wealth by Mastering Your Emotions

Darius Foroux shares 5 key insights from The Stoic Path to Wealth: Ancient Wisdom for Enduring Prosperity.

What does it take to invest wisely? Patience, self-discipline, and the ability to master your emotions are core skills for any investor, and they also happen to be core principles of the ancient philosophy of Stoicism. The Stoics are newly popular among those trying to live a happy and productive life, and they can also help you make a lot of money, according to Darius Foroux, author of the new book The Stoic Path to Wealth: Ancient Wisdom for Enduring Prosperity. Darius is an investor, entrepreneur, blogger, podcast host and writer and he joins us now to share 5 of his big ideas.

1. Managing your emotions is the key to building wealth in the stock market.

In the long run, public markets are still the best wealth builders on the planet. The truth is that we can’t afford to not invest. While most assets have appreciated in value over the last century, our purchasing power hasn’t changed much. Sure, wages have increased. But so has inflation. If you don’t invest, it’s more likely that you will lose money over the long term. But investing is difficult because it goes against human nature. We need to make choices today that pay off in the future. This is the number one challenge to wealth building and investing.

When I started investing and quickly lost money, my response was like almost any other human: I stopped investing altogether. That’s what happens to many investors who start investing without a strategy. They invest in something just because other people did. And when the market crashes, the pain of loss is so bad that they swear never to invest again. While I missed out on huge returns in the years that followed the financial crisis, I spent my time figuring out how successful investors stayed in the game. In my experience, investing is 9 percent theory, 1 percent execution, and 90 percent managing your emotions. That’s why I’ve been applying the philosophy of Stoicism to my investing strategy—it helps me manage the most important, emotional component.