7 costly mistakes made by investors
First mistake: being too conservative
Being too careful will cost you in the long run. If your retirement funds are invested in conservative funds throughout your working life, you are depriving yourself and your future retirement. Financial experts said that would leave you more than $100,000 less than you could have had. It’s important that your money works as hard for you as you work hard for your money.
Mistake number two: Being too greedy
Some investors are at the other extreme and are too greedy to the point of being reckless. I’m not talking about those who invest in their retirement fund but rather those who have invested all their savings in finance companies that attract investors with market interest rates. Greed sets in as it did when investors got their fingers burned during the global financial crisis of 2007-2008 with the collapse of several finance companies.
Mistake number three: Lack of diversity
The single major mistake made by many who lost money during the global financial crisis is their lack of diversity; that is, they put too many eggs in one basket and when one basket falls, the result is a complete mess as far as their finances are concerned.
Mistake number four: listening to bad advice
Associating with the wrong crowd will affect your finances as you will end up listening to their conversation which will affect your mindset. It’s like non-smokers are inhaling the fumes of their so-called friends who are addicted to the habit. If you hang out with them long enough, your own health will be affected.
Fifth mistake: not doing your homework
You need to do your homework on everything you invest your money in and not just invest blindly. There is a lot of information online, so there is no excuse for ignorance in this area. The public library has a lot of financial books, so you don’t need to spend money on books.
Mistake 5: Getting Too Emotional With Your Investments
You cannot be emotional with your investments. Use hard and cold logic when evaluating your investments. Investing in mutual funds/managed funds eliminates the emotions associated with investing, as it is the fund manager who chooses the investments.
Sixth mistake: Lack of patience
Depending on your strategy, some investments are long-term and require patience, but it all depends on your age and your personal situation. Still, if you’re young, you have the advantage of time on your side, so patience will help you achieve your financial goals.
Seventh mistake: Lack of planning.
All successful businesses are well planned! It is therefore essential to have some kind of strategy for your financial future. You have to decide what that money is for; is it for your retirement, a new car, a security deposit, your studies? You must be specific.
Read all you can about the different investment options and which ones are right for your particular situation. Everyone has different goals, so your strategy should match your personal desires.
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