As with life, market goes in cycles, the only difference is in markets, you get a second chance, and maybe even a third chance or fourth.
Wealth is made when one fully exploit the full cycle of a bull and bear market.
What do you need to make the most of markets. Below are what I think are the important ingredients.
1) You need capital, you need to save more than you spend, you need to save more for investment and at a regular basis.
2) You need luck, you need the cycle to arrive not at your most vulnerable period, e.g. Hugh expenses required for hospitalization, kids, or holidays.
3) You need knowledge, you need to buy companies that will survive to see the sun, strong enough to recover from the down cycle.
4) You need a secure job that generate constant income stream that are stable, you never know how long a bear market will last, keep investing, keep piling money into the right instruments.
5) You need extensive research, you need to look how different is this market cycle from the previous, what are some of the causes of effects?
In order to address the 5,
I need to have a warchest, I need to divert income from investment, or capital gain into that account.
I need to manage my expenses, I already did one round of slimming exercise, cut down unnecessary expenses, but there are expenses that are related to the family that are necessary for harmony, even if excessive. (If you know what I mean)
Slimming exercises include:
1) Getting the most basic smart phone plan
2) Get rid of my mobile data plan