Investing your money is a great way to jumpstart your future finances. It not only provides extra income, but it also provides a way for you to learn more about the financial market that can possibly make your investments your entire retirement package. However, in a time like this where making ends meet or even job opportunities are scarce, simply investing your hard-earned money into various mediums can be very difficult.
This has been more evident with the rise of heavy hitters such as more accessible online trading, various forms of cryptocurrencies, and more recently, NFT or Non-fungible tokens and games associated with it. While these are reliable and valid forms of investment, going blindly into them expecting a quick buck can be a source of concern. I present to you the dangers of blind investing and how to deal with them.
Lack of sufficient research
As previously mentioned, there are multiple mediums of investment open to the public, especially to beginners. These are easily accessible, legitimate, and quite popular. However, this popularity can lead to a lot of people mistaking this medium as a quick money bag, which can then lead people to losing their money without having a clue as to why they did.
They might then repeat that same mistake or another, until they’ve lost beyond the point of no return. A great example of this is people on Twitter losing their entire life savings because they relied on someone’s Tweet forecasting certain cryptocurrencies that will supposedly double in value.
As with any form of investment, nothing comes to you easily; you have to put in the hours! What this means is you have to research exactly how this investment form works to its fundamentals in order to have a better understanding of how matters operate within them.
Simply joining in without thinking about it is like buying shares of a random stock and expecting your money to double overnight. You have to look into it, see where it comes from and how it works, and that’s when you invest. Even if you lose money from a well-researched investment, at least you’d have enough knowledge to control the situation of your finances.
Choosing the wrong investment option for your lifestyle
Connected to researching an investment option thoroughly is understanding whether it will work for you or not. There are so many possible options out there and while they can all make you some good cash, not all of them would work best for you. Sometimes it takes a toll on your health to stay up all night for a 24/7 market, or the market schedule simply doesn’t compliment your job’s.
It is therefore of the essence to choose an investment option that will work alongside if not improve your lifestyle. Find what works best for what you do in your daily routine, your work hours, and of course your health. Investing shouldn’t be taking so much from your life because while working for it is important, it should not be stressing you out at all.
Overspending your budget
The most important rule in your investing journey is only investing what you can afford to lose. This means that you have to make sure to set boundaries on what you’re willing to spend and manage in your daily budget. Don’t invest all of your money, especially your emergency funds because you’ll never truly know when you might need them. This is why blindly investing too much if not all of your money is a hazard in more ways than one.
Instead, it is better to simply invest whatever extra you have, or capital that you can raise from other means if possible. If you think that you can’t afford it, at least invest some other time once you’ve already earned enough.
Overall, I hope this serves as a reminder to be careful where you put your money into. Even legitimate and safe investment options can be a cause of loss when not evaluated and done properly. Remember, your financial safety is more important than whatever profit you might be able to get.