5 PITFALLS To Watch Out When INVESTING
- Miss Investor
- Aug 7, 2016
- 4 min read
So you've read the book, Rich Dad Poor Dad or You've attended a "Seminar" and decided and told your self: THIS IS IT! HECK, I'M GONNA BE A RICH WOMAN!!
Then after 6 months, you find yourself drowning in a mountain-pile of DEBTS, starving and you open your wallet and it doesn't even have 100 pesos. (Well, I did)
Whether you wanted to invest in Business, Stocks, Paper Assets, Real Estates, Forex or even deciding to enter Networking, it really is important to at least keep in mind the RISKS involved and ask your self if you could tolerate such risks when all things wouldn't work the way you wanted to. Because it's so easy to decide when you are so HIGH to a point where you feel like you're Superwoman, and that nothing could possibly go wrong, until one day you end up even worst than where you were before.
Well, we all learn from our mistakes. Mistakes are actually great teachers. But it could cost you a lot. It did cost me a lot.
So here are 5 Pitfalls I wished I knew a few years back:
THE LACK- OF-RESEARCH PITFALL
Well it's so easy to trust your money to someone especially when that someone is your friend or when that person really puts on a great presentation. Nothing wrong about it, except that you might be putting yourself in a position where you don't REALLY know what you're really getting yourself into. And you end up losing both MONEY and FRIENDSHIP. Yes, it's ok to trust people with your money but TRUST COMES WITH RESPONSIBILITY. Do your part. Ask questions. Interview those who have been doing it. Check the company's credibility. Weigh the pro's and con's. Seek legal advises. Right now, you can Google just about everything and you just gotta stay smart.
THE BORROWING-MONEY-TO-INVEST PITFALL
Now this is I think one of the deadliest thing you could ever do to your Financial Life, Girl. It's like almost Financial Suicide! I'm not saying that this applies to all, but based on experience, 97% of the time this doesn't really work. According to Randell Tiongson, one of the most famous Registered Financial Planners here in the country, it's only good to borrow or loan money if you are already at the point where you are expanding, let's say for example, Business. Loaning money because you want to expand your business is actually good because it already has a proof or basis that your business has a DEMAND. Whereas, if you are going to borrow money and you're still starting up, there's a higher risk for you to get in trouble because you are not yet sure if your business will work out. This could lead to bankruptcy, seriously. Same thing with those who are considering to join MLM companies (Multi Level Marketing), although they are encouraged to borrow money or even pawn jewelries, it's not a guarantee that they'll get their ROI.
So, the best option is to raise your money yourself, whether from employment or sidelines. It's up to you at least it came out from your own pocket and whatever happens to that investment, at least you could save yourself from the headache of having to pay debts and interests.
THE TOO-GOOD-TO-BE-TRUE PITFALL
I. CAN'T. EVEN! Duh! Treat your investment like a GUY! If that guy you're seeing promises you heaven on earth, and says he would give you the moon and stars, RUN. as in NOW! (Insert #Hugot here.) Seriously speaking, REAL INVESTMENTS do not promise LOW RISKS and HIGH RETURNS. This could save you from being scammed. So always remember this Rule of Thumb:
LOW RISKS = LOW RETURN
HIGH RISKS = HIGH RETURN
THE BLAME-GAME PITFALL
So your plan didn't work out. And you feel like a Victim. And you feel horrible that you lost a lot of money. And you started bitchin' out to those people who encouraged you to do this and that. Well your feelings is valid but is it helping you to move forward? Own up Girl. That's the only way you can get over it.
THE NOT-INVESTING-IN-YOUR-SELF PITFALL
I guess this is one pitfall that most of us get stuck into. We keep asking ourselves, "Why the hell am I not successful yet?" It's so often that big opportunities or money come our way, but why it didn't stay?
I think that this also applies to LIFE itself not just into investing. According to T. Harv Eker, "At any point in time, you are either growing or you're dying." So it's important that we should learn to invest in ourselves first so that when big opportunities and money come, we could keep it.
Make YOU your TOP priority.
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