7 costly mistakes made by investors
Mistake number one: being too conservative
Being too safe will cost you in the long run. If your retirement funds are invested in conservative funds throughout your working life, then you are reducing yourself and your future retirement. Financial experts have said that this will leave you more than $ 100,000 less than what you could have had. It is 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 on 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 those who have all their savings invested in financial companies that attract investors with market interest rates. Greed sets in as was the case when investors burned their fingers during the 2007-2008 Global Financial Crisis with the collapse of several finance companies.
Mistake number three: lack of diversity
The main mistake made by many of those 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 a basket falls over, the result is a total disaster when it comes to their finances.
Mistake number four: listening to the wrong advice
Associating with the wrong people will affect your finances because you will end up listening to their conversation, which will affect the way you think. It is like non-smokers who inhale the fumes of their so-called friends who are addicted to the habit. If you stay with them long enough, your own health will suffer.
Mistake number five: not doing homework
You have to do your homework in whatever you are investing 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 many financial books, so there is no need to spend money on books.
Mistake number five: getting too excited about your investments
You cannot get excited about your investments. Use cold and hard logic when evaluating your investments. Investing in mutual / managed funds takes your emotions out of investing as it is the fund manager who chooses the investments.
Mistake number six: lack of patience
Depending on your strategy, some investments are long-term and require patience, but it all depends on your age and personal circumstances. Still, if you are young you have the advantage of time on your side, so patience will help you achieve your financial goals.
Mistake number seven: lack of planning.
All successful businesses are well planned! Therefore, having some type of strategy for your financial future is essential. You must decide what the purpose of this money is; Is it for your retirement, a new car, a house deposit, your education? You must be specific.
Read all you can about the various investment options and which ones fit your particular circumstances. Everyone has different goals, so your strategy should be one that suits your personal wishes.