6 Secrets of Highly Successful Investors: Unlocking the Habits that Fuel Financial Success

Investing is often portrayed as a way to “get rich” or “beat the market.” However, the most successful investors understand that investing is much more than that—it’s an essential part of achieving financial wellness. Financial wellness means having the ability to meet your needs, support those who rely on you, and achieve goals that extend beyond simply paying bills and managing debt. By adopting the right habits, even in challenging market conditions, you can build a more secure financial future.

Here are six key secrets that highly successful investors use to amp up their investing power.

1. Start with a Plan: Your Blueprint for Success

The first secret of successful investors is that they don’t dive into the market blindly. They begin with a solid financial plan. Whether you’re just starting or have been investing for years, a comprehensive plan serves as your roadmap. At its core, a financial plan helps you assess your current situation, define your goals, and outline the steps needed to achieve them.

Financial planning doesn’t have to be complicated or costly. You can work with a financial professional or use online tools like Fidelity’s Planning & Guidance Center. Creating a plan tailored to your unique situation is the foundation for long-term investment success. Importantly, your plan should encompass more than just investment goals—it should also address aspects like debt management, savings targets, and retirement planning.

A strong financial plan enables you to make informed decisions that align with your long-term goals, providing clarity and direction no matter the market conditions.

2. Stick to Your Plan, Even When Markets Seem Unfriendly

It’s natural to feel uneasy when the markets fluctuate. However, successful investors resist the urge to panic and sell at the first sign of trouble. One of the most critical habits is to stick with your plan, especially during periods of market volatility.

For instance, during the financial crisis of 2008-2009, many investors pulled their money out of stocks, fearing further losses. But those who stayed invested experienced significant gains in the years that followed. According to a Fidelity study, workplace savers who remained invested during the downturn saw their account balances grow by 147% in the following decade, compared to just 74% for those who exited the market. More than 25% of investors who sold their stocks during the crisis never re-entered, missing out on subsequent gains.

When the market feels turbulent, it’s essential to remember that downturns are temporary. A well-diversified portfolio, designed with your long-term goals in mind, can weather the ups and downs. If you find it difficult to handle volatility, consider adjusting your asset allocation to a mix you can stick with through thick and thin.

3. Be a Saver, Not a Spender: The Power of Consistent Saving

Another key habit of successful investors is that they prioritize saving consistently. While market performance may fluctuate, your ability to save regularly is within your control—and it’s one of the most powerful ways to build wealth over time.

Fidelity recommends aiming to save at least 15% of your income for retirement, including any employer contributions. This may vary based on your personal situation, but the key is to start early and save often. Studies show that those who save diligently and early in their careers are more likely to achieve their long-term financial goals.

For example, Fidelity’s 2023 Retirement Savings Assessment revealed that the median American retirement saver is on track to cover 78% of their expenses in retirement. However, savers who consistently set aside 15% of their income can potentially boost their retirement readiness, pushing their score into the green zone, ensuring they’re well-prepared for the future.

The takeaway? Start saving now, and make it a priority. Consistent contributions, no matter how small, can make a significant impact on your financial future.

4. Diversify: Spread Your Risk to Maximize Reward

Diversification is a bedrock principle of smart investing. Successful investors understand the importance of not putting all their eggs in one basket. By diversifying across different asset classes—such as stocks, bonds, and cash—you reduce the risk that any single investment will significantly harm your portfolio.

Beyond simply owning various asset types, savvy investors also diversify within those categories. For instance, in the stock market, you might spread your investments across different regions (U.S., international), sectors (technology, healthcare, consumer goods), and company sizes (small-cap, mid-cap, large-cap). Bonds can also be diversified by issuer, maturity, and credit quality.

Diversification won’t guarantee gains or protect you from all losses, but it helps create a balanced portfolio with growth potential while controlling risk. According to Fidelity’s research, investors who maintain an appropriate mix of assets tend to be better prepared for retirement, as they are able to strike a reasonable balance between risk and reward.

5. Consider Low-Fee Investment Products: Manage Costs Wisely

One often overlooked secret of highly successful investors is their focus on managing costs. While you can’t control market performance, you can control the fees you pay. Over time, investment fees can erode your returns, so it’s crucial to select low-fee investment products that offer good value.

A study by Morningstar® found that funds with lower expense ratios generally had a higher probability of outperforming higher-fee funds in their category. By choosing investment vehicles like low-cost index funds or ETFs, you can keep more of your money working for you.

The key is to evaluate the total cost of ownership for each investment, including any management fees, expense ratios, and trading costs. Every dollar saved in fees is a dollar that stays in your portfolio, helping you grow your wealth more effectively over the long term.

6. Be Mindful of Taxes: Optimize Your Account and Asset Locations

The final secret to investing success is to keep taxes in mind when making investment decisions. Taxes can significantly impact your returns, so successful investors strategically choose their account types and investment locations to minimize their tax burden.

For example, tax-advantaged accounts like 401(k)s, IRAs, and annuities offer the potential to grow your investments tax-deferred. In contrast, taxable accounts may be better suited for tax-efficient investments like municipal bonds or index funds, which generate lower taxable income.

This strategy, known as “account location” and “asset location,” allows you to optimize where you place your investments based on their tax efficiency. While taxes shouldn’t be the sole driver of your investment choices, being mindful of how your portfolio is taxed can help improve your after-tax returns.

The Bottom Line: Success Comes from Consistency and Discipline

Investing doesn’t have to be complicated, but it does require discipline and a long-term perspective. The most successful investors focus on building a solid plan, sticking to it, saving consistently, diversifying their portfolios, minimizing fees, and being mindful of taxes. By adopting these habits, you’ll be well on your way to achieving financial wellness and reaching your long-term financial goals.

Remember, investing is a marathon, not a sprint. With a thoughtful approach and commitment to these principles, you can build wealth steadily over time and secure a brighter financial future.