Why a Successful Investor Needs More Patience Than Capital
Many people believe that success in investing depends primarily on having a large amount of capital. Some think that those who have money have opportunities, and those who don't have money have no place in this world. But the truth is completely different. In the world of investment, money alone doesn't create success. The most important element—which is priceless—is patience.
What Is Patience in the World of Investing?
Patience in investing doesn't just mean sitting and waiting for a profit. It means the ability to stick to a plan, withstand volatility, and avoid making rash decisions. Markets naturally move up and down, and no investment rises in a straight line. Therefore, an investor who lacks patience often falls victim to their emotions: fear during a downturn and greed during a rise.
Why Is Patience More Important Than Money?
Because money without patience turns into random decisions and repeated losses. If you invest a million riyals but buy and sell with every piece of news or rumor, you are actually gambling, not investing. But if you invest only 50,000 riyals, choose a good investment, and wait for 3 to 5 years, you will likely come out with a good profit and outperform the impatient millionaires.
Example: Many investors in the Saudi market sold their shares at a loss during the COVID-19 crisis out of fear of a crash, while those who were patient saw the market recover and rise significantly over the next two years.
Patience Reveals Real Opportunities
Markets go through cycles: periods of boom and periods of recession. A patient investor is one who knows that a recession is temporary and that a downturn is sometimes a chance to buy, not a reason to flee.
Example: Some major companies in the market, such as Aramco and SABIC, have seen periods of stock price decline, but in the long run, they have proven to be successful investments for those who had patience.
Patience Protects You From Emotional Decisions
An impatient investor is quickly affected by any negative news or rumour, leading them to sell at a loss or jump into poorly considered opportunities. A patient investor, however, knows that the market is not a place for quick profits but for building long-term wealth. They observe, analyze, and make their decisions calmly, focusing on the big picture, not the immediate moment.
Patience Gives You the Advantage of "Compounding Returns"
The more patient you are, the more your compounded returns will grow. Compounding returns means that your profits are reinvested and start to grow over time, like a snowball rolling down a hill.
Example: If you invest 100,000 riyals in an instrument that gives you an 8% annual return, after 10 years you will have more than 215,000 riyals. The reason? The profits build on themselves year after year, provided you don't withdraw them and remain patient.
How Do We Practice Patience as Local Investors?
First, create a clear plan and stick to it. Don't enter the market chasing headlines or reacting to every fluctuation. Second, monitor performance but don't make decisions based on a single moment. Third, choose investments with a strong foundation, such as blue-chip stocks, sukuk, or real estate funds, and give them time to grow.
Conclusion
In investing, capital is important, but it's not everything. The successful investor is not the one who has the most money, but the one who has the most patience. Patience is what protects you from emotional reactions, gives you time to reap profits, and helps you build real wealth that lasts.
Always remember this rule: "Money without patience... is a delayed loss, and patience without a plan... is a wait without a result. But patience with awareness... is the key to success."
FAQs
Can I succeed in investing with patience alone, even if my capital is small?
Yes, patience in investing sometimes compensates for a lack of capital, especially if you choose suitable investment tools and let them grow over the long term.
When does patience in investing become a mistake?
When patience turns into clinging to a losing investment without any review or analysis. Patience doesn't mean giving up; it means smart observation and making well-considered decisions when needed.
What is a suitable duration for patience in investing?
The duration varies depending on the type of investment, but generally, investments like stocks and funds need at least 3 to 5 years to benefit from growth and compounding returns.
What is the difference between patience and hesitation in investing?
Patience is based on a clear plan and strategy, while hesitation is postponing a decision due to fear or a lack of understanding. A patient investor sticks to the plan, while a hesitant one doesn't start or gives up halfway through.
Is patience alone enough for success in investing?
No, patience alone isn't enough. You also need good knowledge, an analysis of opportunities, and a choice of strong investments. Patience is part of the equation, but it requires awareness and a clear strategy to lead you to the desired outcome.
