If you know or are one of these types, don’t risk your money.
Investing your money into various areas in the hope of reaping a bountiful return can be a positive and even lucrative endeavor… if you know what you’re doing and you’ve carefully considered your options, weighed up the risks vs rewards, and read the financial landscape accurately.
Investing Your Future
Too many people have jumped into the investment arena, unprepared, inexperienced, and recklessly rushing in where angels fear to tread in hope of making a quick profit, and have suffered the consequences of their rash actions. There’s a ye olde saying that goes “a fool and his money are easily parted” and never has that been truer in the mine-laden world of financial investments where if something seems too good to be true, it usually is.
Around 55% of Americans have some kind of financial investment outside of their regular primary income stream – although that figure is down from the pre-credit crunch figure of 65% in 2007 – with the majority of that percentage (35%) investing in real estate. Across the Atlantic, it’s much the same story in the United Kingdom of Great Britain and Northern Ireland with 51% of UK citizens having investments as of January 2024 (up from 42% in 2023) with the majority (34%) investing in stocks and shares.
Should I Invest?
Clearly a lot of folks out there are playing the financial markets and hoping for a nice ROI to come their way at some point, often as a retirement fund. But not everyone is suited to the investing capital game, not everyone has the character or temperament or even sufficient knowledge to risk their money in such schemes, and indeed, it is estimated that around 90% of all investors in stocks and shares will lose money and that after 5 years, only 7% are still trading.
In light of that astounding figure, we have consulted market experts and compiled a list of the 5 types of people who really shouldn’t be investing. This is not to say that everyone who comes under one or more of these character descriptions shouldn’t invest, it is rather a mere guide in recommending who and who may not be suited to investing if you want to get a healthy return on your portfolio.
1. Gamblers
It goes without saying that people with compulsive gambling tendencies would not be the wisest investors. Gambling by its very nature is an inherently risky at best and unnecessarily reckless at worst practice, gamblers will often throw caution out the window and go on their gut feelings. That is absolutely NOT the way to play the investment game, one which takes patience, clarity, thoughtfulness, and prudence.
2. Profiteers
There’s nothing wrong with wanting to and/or making a profit, that is, after all, the whole point of financial investments. However, there are what we shall describe as profiteers, those who invest based on the idea of getting rich quick, putting their money and advising others to do likewise in often risky ventures on the slim chance it will ‘pay off’ in the immediate short-term. More often than not, they lose their own money and sadly other people’s too. It’s another form of gambling, in effect, and as mentioned previously, the complete antithesis of what a sensible investor should be.
3. Inexperienced
Everyone has to start somewhere when investing and no-one is born with ready-made experience playing the markets, but inexperience can be a major handicap for any new investor. New investors sometimes have their naivety used against them by profiteers or swindlers, offering them a get-rich-can’t-lose opportunity that ultimately turns out to be anything but. Alternatively, newbie investors can by themselves get caught up in the ‘thrill’ of investments only to crash and burn. If you’re serious and sober-minded about wanting to invest, it’s highly recommended that you tap the experience and expertise of a trusted and reputable financial advisor who can give you sound and unbiased advice.
4. Impatient
If there’s one thing that sound investment needs, it’s patience. As mentioned previously, get-rich-quick schemes invariably and more often than not lead to loss. If you’re going to put your money into an investment opportunity, the best thing you can do is be patient about it. Lack of patience can lead an investor to make poor choices whereas a cool, calm, and patient investor will look at the opportunities on offer, weigh them accordingly, analyze the risk vs reward aspect, and most of all know when, when not, or how much to invest. Additionally, that wise investor will be prepared to let the investment in question mature and gain value before cashing in. Patience is the better part of valor, to somewhat paraphrase an old saying, and in investment that is never a truer idiom.
5. Debtors
Being in debt is never fun nor comfortable, and often the person owing that debt is driven by desperation to try and raise much-needed funds by playing the financial markets. Needless to say, this is not a conducive way to approach the investment arena; for one thing, that person is probably not thinking clearly, and second, they are playing with money they can ill afford to lose should the investment not work out. In such a case of debt, you need to restructure your finances, including any investments you may already have or wish to make, but that is not recommended short of professional advice. Yes, you could win big with an investment, but you could also lose big and find yourself in an even worse position than before.
Conclusion
These are all just simple recommendations but ones that we believe are sound and that if followed, your wallet and/or bank balance will thank you later for.
