Mistakes made by investors
Mistakes can be costly, therefore, as an investor doing your due diligence will payoff in the long run. However, there is no guarantee that you will not make any mistakes during your lifetime. As the saying goes, “He who has never made a mistake never made anything.”
As an investor all you can do is minimize the chances that something will occur which could cause substantial financial hardship for there are no guarantees.
Mistake number one
Not doing your homework
“Ignorance is no excuse,” is a commonly used saying and that is applicable in finance as well. Many investors have had their fingers burned by blindly investing in something they know nothing about. With so much financial information in the newspapers and on the internet there is absolutely no excuse for being uninformed.
Mistake number two
Placing all your eggs in one basket
Diversification is a key strategy for a balanced portfolio. What this means is spreading your investment over different kinds of industries and having a balance between growth, balanced, and conseervative investments. How much you place in each investment depends on the purpose of the money, your age, and risk portfolio.
During the Global Financial Crisis of 2007-2008 a lot of investors lost money in finance companies that went bust with a common complaint being the loss of an entire life savings. The mistake here was that some investors placed all of their finances in the one basket.
Mistake number three
Not taking responsibility
Taking responsibility for your own finances is important but some people by their very nature like to have someone to blame if their life or finances turn to custard so they will take the advice of someone. What sometimes happens is they will listen to a number of opinions and go with the one which aligns with their own. If things are going well they are smart or so they think they are and if things turn bad then it is someone else’s fault.
Mistake number four
Listening to the wrong people
The biggest downfall of unsuccessful people is they associate with bad company and take on board their opinions and bad money habits and attitudes. It has been said you are the average of the five people you spend most of your time with. If you do not have the opportunity to mix with successful money managers listen to them on youtube and register with their websites. It is all about developing the mindset of successful people.
Mistake number five
Keeping up with the Joneses
Trying to keep up with the Joneses will kill off your chances of any kind of financial success especially if you are on a lemonade budget and they have a champagne income. Everyone has their own personal circumstances and it is up to you to manage your life and finances according to your circumstances.
Mistake number six
Not living within your means
This is the most basic rule of finances, one which requires you to minimize your living standards to a level which allows you to live within whatever income you have. So many people increase their living standards to suit their income and never get ahead. Financially smart people invest any increase in income to increase their wealth while poor people just spend and windfall they receive.
Mistake number Seven
Not Having a Financial Plan
“If you fail to plan you plan to fail,” is a common saying, and it is no more true with your finances. Planning for the future will make things easier for you when the going gets tough. Job losses, car breakdowns, health issues, and retirement are all issues that can be financially challenging if you do not make allowances for these.
Gold has hit a record price, if you are interested in investing in gold check out the site below;