We can see a bandwagon effect in today’s world where individuals put their money in different investment portfolios because of what is trending. Today, it is bitcoin, tomorrow it is fx trading, next it is the stock market, and the day after it is real estate.
In building wealth, there is only so much you can do on your own; you can’t achieve it as a solo man or hardly depending on just a salary. The wealthy employ Other People’s Money (OPM) and Other People’s Time (OPT). While working for a wage, you can find a way to build passive income (making money while you are not necessarily doing anything) while employing OPM and OPT. Your investments (including businesses you own) will help you achieve this. If you are seriously considering becoming wealthy, you must be ready to become a good investor.
What is your investment strategy?
You should genuinely invest when you have acquired enough knowledge or understanding behind the investment or opportunity; anything short of that is gambling. You must understand investment is about risk and reward. Usually, the risk is directly proportional to the prize.
Furthermore, when investing, you can either eliminate risk (don’t invest), manage risk (get understanding or buy insurance ) or accept the risk. Don’t put in what you can’t afford to lose in a high-risk investment. But you also don’t want to play it too safe, and that is why you must have a strategy that works for you.
How do you invest profitably?
1. How secured is your investment? Don’t be so interested in huge returns that you ignore the security of your principal. Be careful of get-rich-quick schemes. They are never sustainable. They feed off people’s greed.
2. Don’t be too emotional; You must be as logical as possible. If any opportunity does not make sense to you logically, do not invest because a friend or family member proposes it. Most scammed people later acknowledged they made emotional decisions.
3. Understand the risks involved in the opportunity. And have a plan on how to manage the risks if you are going to invest.
4. Be careful when you are investing in a rookie. Some people have great ideas, but a business is more of execution than ideas. Anybody can prepare a business plan, but it takes skills and wits to run a successful business. Does the person have integrity, and what is their track record?
5. Consult people. Talk to more experienced people. You will learn a lot from the experiences and avoid some pitfalls. They will share experiences they probably paid dearly for with you, but you will be getting it for free.
True investing always requires an understanding of both the fundamentals and the technicals. Become an investor today and stop gambling. Please feel free to share your knowledge in the comments section.