7 Costly Mistakes made by investors
Mistake Number One: Being Too Conservative
Being too guarded will cost you in the extended run. If your retirement funds are invested in conventional funds throughout your working life then you are short-changing yourself and your future retirement. Economic experts have stated this will leave you higher than $100,000 short of what you could have had. Your funds must be running 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 ravenous to the point of being wild. We are not talking about those who spend in their retirement fund but rather those who have their entire savings reinvested in finance firms which lure investors with market interest rates. Greed sets in as were the case when investors got their thumbs burned during the Global Financial Crisis of 2007-2008 with the failure of several finance companies.
Mistake Number Three: Lack Of Diversity
The one important mistake made by many of those who lost money through the Global Financial Crisis is their lack of diversity; that is, they put too many seeds in the one pot and when one pot is dropped, the result is a complete mess as far as their finances are in question.
Mistake Number Four: Listening To The Wrong Advice
Connecting with the wrong crowd will affect your finances because you end up accepting to their conversation which will influence your mindset. It is just like non-smokers inhaling the smokes of their so-called friends who are addicted. If you hang about them long enough your health will be affected.
Mistake Number Five: Not Doing Your Homework
You have to do your study on whatever you are investing your money in and not just invest blindly. There is a lot of data online so there is no justification for ignorance in this area. The public library has plenty of financial books so you do not need to outlay money for books.
Mistake Number Five: Getting Too Emotional With Your Investments
You cannot be emotional with your investments. Use cold hard logic when evaluating your investments. Investing in mutual/managed funds takes your sentiments out of investing as it is the money manager who chooses the investments.
Mistake Number Six: Lack Of Patience
Depending on your plan, some expenses are long-term and need patience, but it all depends on your age and individual circumstances. Still, if you are young you have the benefit of time on your side so moderation will help you obtain your financial goals.
Mistake Number Seven: Lack Of Planning.
All successful enterprises are well-planned! So having some type of strategy for your business future is essential. You need to decide what the end of this money is for; is it for your retirement, a new car, a house deposit, your education? You must be precise.