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Bring Out The Sceptic In You

Adapted from 4thWay co-founder Neil Faulkner's new book on P2P lending strategy, read why it is that you should question everything when investing.

Part of the reason you're reading this website is that you're a natural sceptic.

It's your job as an investor – for lending is a type of *investing* – to be sceptical.

The way to successful investing is to try and prove yourself wrong, not to confirm what you already believe.

Most investments are bad ones, so a good active investor rejects far, far more of his or her own investment ideas than he or she accepts.

I bet you can't do it

It's not easy to do. Not when an idea, cause or company appeals to you. And certainly not after you've spent a lot of time researching.

Deep inside, you just don't want to accept that you “wasted your time”.

So you look for reasons to go ahead anyway. And once you start looking, you can't help but find something to latch onto.

When using the 4thWay website, I want you to be sceptical of everything. Question it. Probe it. Is it really logical? Was the point really proven?

If you get a rebellious feeling in your tummy, don't ignore it, just because you want to get started on the tips and techniques to earn more money, more safely. Think first how you could try to disprove my point and then attempt to do so.

Only after this prodding, probing and questioning can you truly have the confidence to know whether P2P lending is right for you.

Whatever you conclude, to go ahead or to delete from your favourites list, you'll be much wiser for it. And you will take your next financial decisions with much greater confidence or, at least, much more deserved confidence.

It's all about genuine confidence

Making investing decisions without genuine confidence is a huge danger to your wealth. At every turn – every time interest rates fall, every time bad debts shoot upwards – there will be cause to panic. Rightly so. You don't know what you're doing!

At times of trouble, such as recessions, you will panic-sell your loans to other lenders for a loss. Because they'll take advantage of your lack of knowledge and confidence by paying you just 80p in the pound.

And then they’ll make fat profits off you when your panic proves overblown. I’ve seen it happen in other investments many times over nearly two decades.

In all investments, be it shares, P2P lending or anything else, you should only expect one result when investing without genuine confidence: you will be disappointed by your results.

Attain a Zen-like calm when investing

On the other hand, the feeling you get when investing after you've really, really tried to destroy one of your favourite investing ideas – and failed to do so – is very different to the one when you just go with your gut.

You feel fantastic. You have a Zen-like calm. You think clearly when events, good or bad, happen. You don't worry you've sabotaged your future.

The only bad investment is one you make without absolute, genuine confidence.

Your starting point must be disbelief and that confidence must be earned through thoughtful research.

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