Investing is one of the best way to build a good financial foundation for your future and it is also one of the most advisable thing to do when you have money. It’s one of the most secure insurance you can give yourself and your family.
However it would be disastrous for you if you went about investing the wrong way. There are many avoidable mistakes that people make when investing, and these mistakes turn out to cost them all the money they put in.
We have made a list of the top 10 investment mistakes people make. Do well to avoid them.
- Not Researching
Lots of people are guilty of this. And this is because many people hear about an opportunity from a friend or read about it online and then they just dive into it with all the money they can get. That is a wrong thing to do and is sadly one of the biggest mistake investors make.
Before putting your money anywhere, it is advisable to do you research well. Find out about this opportunity or model, read everything you can find about it so that you will know for sure if it is doable or not. If it’s a crypto currency then study about crypto currencies until you know everything there is to know about them. If it is an agricultural venture then dig in and study all about it too!
- Not Considering Reputation of the Business/Company
It is very important to check out what the reputation of the company you want to invest in is like. Find out what people who have done business with them is saying about them. Dig up past reviews about the company and read them.
If people talk good about them, then it should be safe to do business with them.
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- Not Checking Out Past Financial Records
If you are considering buying shares from a company then it is important for you to check out how financially buoyant they are. This is important because some companies might be approaching bankruptcy and want to grab people’s money just before they close up and run. Be sure you won’t be a victim of such circumstance.
- Believing You Can Operate Outside The Law
Many people think they can put the law aside and break all the rules they want to all because they want to make an investment. This is so wrong. If you want to make it big then you have to know that you will put yourself in the limelight. Being in the limelight implies that while many people admire you and wish to be like you, the government’s agencies would also look harder into your files to be sure you are on the right track with the law. It would be devastating if you would suddenly have to fall back to the grass all because you broke one too many laws on your way up.
- Leaving Your Brain Behind
This may seem like a funny point but it is indeed true. Many people tend to switch off their brains when faced with opportunities, particularly ones that involve the prospect of making lots of money. And this is also one of the investment mistakes people make without even knowing they are making it.
If you want your investment to yield, make every single decision with your brain active. Think every action through and be sure they are the best choices you could have made.
- Taking on Too Much
It is true that with investments it is always the bigger you put in the bigger you bring out. Nevertheless it is advisable for you to not take on too much risk. Don’t put in more than you can spare at the time.
And do not risk more than you can bear to lose. be cautious.
- Not Being Patient
There is no valid shortcut to success. If by all accounts you made the right investments in the best possible ways then you should be patient enough to wait until it yields you something significant.
Don’t get unnecessarily worked up and pull out your investment when it could turn in something good for you.
- Diving in the Wrong Field
It is important to stick to what you know best when investing. If your forte is agriculture, stick to it. If your known field is crypto currency don’t go running off to invest in real estate. Investing in the wrong field because you feel there is not much you don’t know about that particular field is one of the gravest investment mistakes people make and later on regret.
This is important because this areas have certain dynamics that are known to only the persons that are experienced in them. Stick to the fields you have been conversant with, it naturally gives you an edge.
READ ALSO: WHY YOU SHOULD/SHOULD NOT INVEST IN BITCOIN
- Not Making it Official
People usually make this mistake when they are investing with a known friend or associate. You may feel because this is your friend all the formalities can be brushed aside. Well if you don’t sign the required legal documents and take the recommended steps by the law then you are setting yourself up to be duped by whomever you are doing business with.
I am not saying your friends are not trustworthy, i am just saying legalizing and making things official will make it easier for you to recover your money if things go wrong.
Besides, the person may fall victim to any circumstance like death or an incapacitating accident that would make him unavailable, how then would you prove you have money in the investment if you did not sign the required documents?
- Not Keeping Records.
This is one of the most common investment mistakes you can avoid by simply making it a habit to always keep a record of everything you do for the investment.
Be sure to always record every penny you put in. This way you would have a credible record of whether or not you are running at loss yet. This should be one of the most easily avoidable investment mistakes.