The most successful businessmen and women all around the world are good investors. From time to time, people get money and are confused about what to do with it. A lot of persons even talk about investment but not everyone truly knows how to invest. It is either you are making a good investment or a bad investment. Investing is a decision and such a decision requires good understanding. Quite a couple of persons refer to the act of investing as a risk. This isn’t entirely true because there is a difference between Risk and Evaluated Risk.
Evaluated Risk is the secret behind the success of most investors, businessmen, and entrepreneurs. In this kind, careful evaluations of the investment are made as the person or people involved get to analyze the opportunity presented to them.
How to Identify a Wrong Investment
Many persons have been involved in certain businesses and investments which have ruined their lives robbed them of all their hard work. People get very existed when they hear about money. In the world we live in today, money is a motivating factor for people to do different things.
If you are money drunk, investment can be a very bad idea for you except you have the right tools or people to guide you. When you in a haste to generate more money, you are at risk of losing the one you already have a hold of. There are different ways to identify a bad investment opportunity when you come across any. See them below:
Get Money Quick Schemes – Earlier, I highlighted that you need to be calculative before making any investment. One big mistake people make is rushing into everything which they see as an opportunity to get more money. Sometime in 2019, I came across a so-called investment opportunity that promised to give me more than 500% return on my investment in just a month. This was strange because the opportunity presented to me by someone I could trust. I sat down, analyzed it and had to call my uncle whom I never knew had been involved in an investment like that before. His advice and my patience not to rush into it saved me because, at the end, it turned out bad for those who were involved in it.
The lesson from this is, never be quick to throw your money into something which promises to be quick. A lot have turned out to be scams and you going to make your village people happy lol……
Investing in What You Don’t Understand – One lesson a learned from the great investor Warren Buffet is, “Don’t invest in what you don’t understand”. As shocking as this may sound, I also heard the richest black man in the world, Aliko Dangote said the same thing in an interview. When presented with an opportunity to invest, you have a greater advantage to make it big in that investment when you understand what you are investing into. You need to understand the industry or sector very well. This gives you a concrete idea of how your money is going to be generated.
Putting Your Water in a Basket – This is a very funny statement and I know but there is great wisdom behind it. Think about the holes in a basket. I know they are quite much right? A lot of times, people fail to identify the loopholes in a business or investment. They ignore it and go hard with the money-generating aspect of it. This is a very wrong way to invest because you ignore the part of investment where intelligence comes into play. Before investing, you must make an intelligent analysis to identify the degree to which the investment many turn out successfully or fail. The holes are a representation of the factors identified that this investment won’t work. Once you have more holes in your basket (investment), then it’s time for you to run for your life because that is definitely a wrong investment. The degree to which the investment would turn out successful must be greater than the degree to which it would fail.
Be wise guys! Don’t allow your village people rejoice over you……lol