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If you want to be successful, you need to read this
Not a encouraging title if you think you can learn how to make money, of course. I get that.
Still, I think we should have discussed these 5 things first, so that you won’t make them in your first steps to investing.
Almost all our money gone
Whether we are talking about investing in the stock market, real estate, crypto currency or other projects, I am sure you have heard a story about someone who has lost money due to a mistake in the investment. Of course we all hope that we never make them and lose our money, but at the beginning of this year I prevented a financial drama in our household by following my intuition. And had the luck that my partner went along with me, because he knows that my intuition is not often wrong.
Through friends we had deposited a large part of our savings and the inheritance of my youngest daughter into an investment platform that worked with compounding. In addition, you lend money to the investor who trades with it and you receive a percentage of that every day on your account. Your deposit is held for 40 days, you can withdraw or refund the profit, which the investor will trade with, and so on.
The amounts on the screen were high and everyone was very enthusiastic. So I got that nagging intuitive feeling that we did not have to count ourselves rich as long as that money was only numbers on a screen and not in the bank account. After a couple of weeks, my partner got nuts by my nagging that I wanted the profits on my bank accounts.. So he decided to withdraw the profits and continue with original amount we deposited. Because of this we decided to cash in December.
In January we had a payout for the last time. By then we had our original amount and really much more profit of it back.
Long story short: The Dutch Bank and AFM did not trust the business and decided to conduct an investigation. Yesterday I received the news that the business was declared bankrupt, but that 42 million euros were in accounts no one can touch on the island of Malta.
You sure can imagine how glad I am that we listened to my feelings.
I think it is very sad for all those people who have invested their money and have not seen a dime, like the friends who really need it and in blind trust put everything they owned. I have even heard stories from people who have borrowed money for it. They not only lost the money, but also have to pay off the loan with interest! Very sad.
Hence, the 5 ways in which you can easily get broke by mistakes in investing. Maybe after reading this you can point out one or more things where it almost went wrong with us at the beginning of this year …
1. Don’t spread
Not spreading is a common mistake that investors make. I see many people who have all the eggs in one basket and therefore run a huge risk. Just the people I know from the above story. It could be that they only invest in 1 company, in 1 real estate project and so on. That can easily turn into a tragedy: if what you invest in, ends in bankruptcy, you go down financially. It is therefore very wise to always spread your money over multiple objects. Even if, for example, you only want to do shares, do so in several companies.
2. Exact copying other peoples ways
Of course, sometimes really successful investors have really good ideas that are applicable to everyone. Always watch out with the indiscriminate copying of what someone has done successfully in the past. It is possible that the system no longer works like this or that it is not at all applicable to you and your interests, time and financial possibilities.
Always remember, write it on an A4 if necessary and stick it on your mood board:
3 If it was all that simple, we would all be rich!
Learning, researching, experimenting and being patient is really necessary when investing with good sense and results.
You will have to look at the timing, in which time the person acted and the current situation of the economy. The amounts that were available and are now. The state of affairs at companies, currencies and commodities then and now.
If I had copied exactly the behavior of the people in the above story, I would have lost everything.
What also must be carefully checked, is whether the person you admire is not a scammer. Because you do not have much experience in the beginning. Scammers are standing in line to tell you they make you just as successful as they are. Before you know it, they have completely tricked off your savings.
3. Withdrawl your money whenever the stocks go down
There is an incredible number of people who make this mistake when they invest for their retirement. There are people who always withdraw their money when the market falls, even if only for a few days and again when it attracts. Error, error, error. That means that you always sell low and buy expensive and that costs you an incredible amount of money. If you invest for your pension, it means that in most cases the money may take a few decades to grow. And every decade has its bubbles and crashes. If you look into the history of the markets, you will see that after a fall, recovery always comes.
If you are already living up to your pension and are in good shape, make sure in calm economic times, that you secure a portion of your money in other ways
One example I know of someone who had withdrawn everything, because he thought that once you lose money on the stock market, it never got better and you would lose everything. It cost him capitals. Had he let it in its place, he and his wife would now have been able to travel and enjoy what they had intended.
And that brings me to mistake number 4 …
4 Don’t do thorough research before you start
All right, some mistakes in this part can still work out well or have done minimal damage, afterwards.
What you really have to do: RESEARCH!
Investing without doing your homework on research and sorting out everything, is really Russian Roulette …
I am not saying that everyone should be an investment expert, but at least learning the basics and investing in research is not a luxury. Like all the skills that you have had to learn in your life to get somewhere, to work, to move your body, to express, it’s also desirable to learn a basis of skills on investing and research how things works.
You will have to learn and understand the most common terms, what the different types of investment are and where you put your money into. If you are anti-smoking, you should not invest in Philip Morris, for example. If you are interested in a company, examine its financial health. If a mass dismissal was announced a month ago, you can assume that it is not all that good and you should look for another party. That company can get a lot better in the future, but for you as a beginner to start with, it’s too risky.
On the other hand, you can also say: I leave it to an expert who does all of that for me. What are you going to do? Do you give him / her your money and wait passively for the quarterly figures? I sure don’t hope you do!
You also need to conduct thorough research before shaking hands. There are a lot of scammers active in matters that involve a lot of money.
All these things are easy to find in this internet era, only so alarmingly few people actually do that
5. Not investing is a big mistake
If you do not invest in anything at all, the chance that you will lose a lot of money and be broke is very big.
“Huh, if I don’t take a risk, I can’t lose anything, do I?” I almost hear you think.
Think about it:
Yesterday, just like many other people, I received a message from the bank that the savings rates have been reduced again.
I know countless people who have been burgled and the proverbial old sock has been taken away.
I know stories from parents who are emotionally blackmailed by their children or are forced to pay money with crocodile tears
I know countless people and stories from people who have topped everything in their own company that is now bankrupt
I know a lot of women nowadays who, after the divorce 20, 30 years ago and back then never had to deal with things or didn’t dare to deal with the ex-husband, with regard to the accrued pension and now can’t get that right anymore, so everything is lost.
And that is just a glimpse of the many stories of bankrupt, deprived, defeated, disillusioned people who, at some point, had imagined their lives differently from where they stand now.
In the past I have never thought about investing, let alone doing anything with it. That has ensured that I now have a pension gap of the size of the Grand Canions and that I have to make a spurt in it, if I want on my (really) old days want to live a life in abundance.
By not investing at all, you lose a lot of money in advance, because you do not open any window of opportunity to make more of your income today.
We love to read your thoughts about this.
Have a great day!