How to Change Your Money Identity to Stock Market Investor
The other day I spoke with a former student who bought her first stock because she wanted to change her money identity.
She called it an “identity investment”.
Yes, you see…
She came from a family where security was valued and stocks were considered risky.
When she started my eight-week Value Investor course, she quickly bought some shares in a company – without even going through the checklist to define it as a wonderful company as I had taught her.
When I asked during a recent strategy call why she had invested in that company, she said, “Well, that one. It was an identity investment.”
She bought the stock with the sole purpose of changing her identity. She wanted to move from being someone who doesn’t have the courage to buy shares to someone who identifies as a shareholder.
I actually think the concept is brilliant.
Your Money Identity Rules Your World
Why is this a good concept?
Maybe you haven’t been aware of it until now, but there’s a lot of identity built around money.
Many of the decisions you automatically make are not rational decisions, but emotional decisions that originate from a deeper place within yourself.
Maybe it’s something you were brought up not to do (like buying stocks because it’s “gambling”). Maybe you think you belong to a group that is against investing (who call wealthy people “filthy rich” and think stockowners are capitalists who exploit the world).
You wonder why you get sick to your stomach every time you think about investing or learn something about it, and you don’t quite understand why. Maybe it’s because you feel it’s dangerous or wrong? Maybe it’s contradictory to your identity?
What is Your Money Identity?
When we think about it, it’s obvious that identity tends to have a money element. Consumption and identity are closely linked. Why else would so many companies spend so much money on brand building?
Some people are willing to spend fortunes to buy a Porsche or dress in Louis Vuitton. Why? Because they want to possess the identity that the brand promises them.
Of course, there is also an identity built around how we do NOT spend or invest our money. There are some things that we CAN’T buy or invest in because it doesn’t match the way we think about ourselves.
If you think about money and start a sentence with:
“I’m the kind of person who….”
What comes to mind next?
Or if you’re thinking about stocks and need to finish the sentence:
“In my family…”
What comes to mind next?
You Can Break Away from This by Making an “Identity Investment”
To break free from your image and your social heritage, you can throw yourself into making an identity investment.
But what is it, really?
Let’s try to define it.
1. It can be buying stocks for the first time
It’s an investment that you make because you want to break out of a limitation that has bothered you in the past.
It may be the first share you buy. With the purchase of your first share, you actually change your identity. Now you can call yourself a shareholder.
2. It can be a change in what kind of shares you buy
If you’ve always invested in funds, it might be time to buy shares in a company, so you know that option is open to you too.
3. It can make you go beyond national borders
If you have always only invested in American companies, it may be time for you to buy a few shares in a foreign company today to establish that this is also an option for you.
4. It can be a large or a small investment
It doesn’t have to be a big investment. It can be a single share.
But if your pattern is to only buy stocks for small amounts even if you have a lot of cash savings, you may need to test your identity by making a slightly larger investment.
Combine Your Investments with Knowledge
It’s best to pair your identity investment with investment books or even a course.
Warren Buffett says that knowledge is the best way to manage risk.
It’s essentially the same as everything else. It’s also safer for you in traffic if you know the traffic rules and have taken driving lessons. It’s safer for your child in the swimming pool if they receive swimming lessons first.
That’s why I really recommend you read my investment book (which you can download below) before you jump into changing your identity through shares.
In my e-book Free Yourself, you can learn much more about building wealth by holding stocks. You can download it here.
What are your goals for 2023? What qualities do you need to be successful in your goal? Do you have an inner type that you can put to work?
To learn more about my style of investing, you can download my e-book Free Yourself here.