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Last week's column delved into the meaning of five investing quotes taken from my recent quiz. If you haven't taken the quiz yet, you can find it at tgam.ca/EAmQ.

Today, we'll explore the remaining five quotes, focusing on how do-it-yourself investors can put these famous words into practice with their own portfolios.

Let's start with quote No. 2, from Benjamin Franklin:

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"An investment in knowledge pays the best interest."

Mr. Franklin was an inventor, philosopher, politician, businessman, scientist and founding father of the United States. He was also one of the richest men of his time. He even penned a book – The Way to Wealth – that shared his steps for achieving prosperity.

While the above quote didn't appear in the book, the notion that people should educate themselves, live frugally and look after their own financial affairs was one of Franklin's central messages. As he wrote in The Way to Wealth, "trusting too much to others' care is the ruin of many."

If you manage your own money, you must spend the time to educate yourself about investing. Even if you use an adviser, it's imperative to learn as much as you can.

Otherwise, you could become the target of an unscrupulous salesperson who pushes inappropriate products, churns your account, charges excessive fees or encourages you to engage in risky strategies such as borrowing to invest.

There are countless books, newspaper articles, websites and discussion forums where you can learn everything you need to know about investing. Protect yourself. Use them.

As quote No. 4, from legendary value investor Benjamin Graham, illustrates, one of the biggest threats investors face is from within:

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"The investor's chief problem – and even his worst enemy – is likely to be himself."

Investors sabotage themselves in countless ways. They trade too much, sell out of fear, take too much risk and focus on short-term returns when successful investing is a long-term process.

The best do-it-yourself investors that I know have learned that doing nothing is often the best strategy; they buy high-quality companies or index funds and hold them for years, reinvesting their dividends along the way. They're not interested in trying to time the market or flipping stocks for a quick profit.

This leads to quote No. 8, from index fund pioneer John Bogle, founder of Vanguard Group:

"Time is your friend; impulse is your enemy."

Many investors don't understand the importance of time. They measure results over a few days, weeks or months, when true wealth is built over years or decades. Whether you invest in passive index funds, as Mr. Bogle recommends, or hold a basket of blue-chip dividend stocks, letting time do its work is one of the most important ingredients in a successful investing plan. Trying to hurry time by trading frequently or gambling on risky stocks is asking for trouble.

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As quote No. 9 from legendary fund manager Peter Lynch demonstrates, another mistake investors make is overcomplicating things.

"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand."

As sound as this advice is, people routinely ignore it. They invest in risky technology stocks, opaque hedge funds, fee-laden principal-protected notes and complex schemes they hear about at seminars out by the airport.

Why? Because they think that the more complex something is, the more profitable it must be. Wrong. Often, complexity entails higher risk, higher fees, or both. If you stick with what you know, you'll save yourself a lot of pain.

This brings us to the final quote, again from Benjamin Graham:

"The individual investor should act consistently as an investor and not as a speculator."

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A speculator is someone who takes a flyer on a stock, hoping to flip it to the next person at a profit. An investor is someone who, in Mr. Graham's words, can "justify every purchase he makes and each price he pays by impersonal, objective reasoning." I would add that an investor thinks and behaves like a company owner, because that is exactly what a shareholder is – a part owner of the business.

As these quotes demonstrate, if you take the time to educate yourself, buy high-quality, easy-to-understand companies, exercise patience and resist the urge to speculate, you'll greatly enhance your odds of becoming wealthy.

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