There are lots of investment out there, often there are more bad onces than Good onces. Can you tell the difference? If not, then investing would be risky….for you….right now.
People often ask what type of investment is less risky, what they should be asking is, “how do I invest in a way that isn’t risky” you see, any type of investment can be profitable if you know what you are doing…or disastrous if you don’t. Risk start with the investor because the investor is the one to determine if the deal they are looking at is risky or not.
Many people consider investment in real estate risky, and it’s Ricky to those who doesn’t know what they are doing. Many flippers brought at high prices during the real estate boom assuming the price would continue skywards. When the bubble popped they were in trouble.
I consider investing in mutual funds to be risky because I don’t have control over the investment-i am at Mercy of the market and whatever decisions the fund manager makes. Add to that poor returns and high management fees.
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This is to say that any investment can be profitable if you know what you’re doing or disastrous if you don’t.
A number of years ago, I watched an interview with Warren buffet. During the interview he said, “the only reason I go to the market is to see if someone is about to do something silly”
What most people think is investing, one of the most successful investor in the world called it financial silliness.
Buffett went on to explain, that he didn’t watch pundits on TV or the UPS and down share prices to gain investing advise. Infacts his investing was actually done far away from all the noise. Stock promotions and people who make money. From so called investment News.
STEPS TO BECOMING AND EDUCATED INVESTOR.
As said before, that there are few things more Ricky than an investor who has no idea what he is doing, the reality is that any body can acquire financial knowledge and sift through the information available to find out what he needs to know so. Where do you begin.
A. Understand definitions of financial words: this will greatly increase your knowledge of the subject. Start with terms like asset’s, liabilities, ROI, and gross vs net income. Then, dig deeper, every time a new word comes up in conversation or in your reading (which I’ll discuss in a minute) stop and look up for definitions instead of glossing over it.
B. Learn how to read financial statements: such as income statements and balance sheets, if you intend to reach financials dreams. Then you have to become very comfortable with basic addiction, subtraction, multiplication and division. Consider every investment you are pursuing as a mystery to be solved and numbers are the clues that guide you.
C. Find a mentor: seek out a seasoned real estate investor and pick their brain behind every successful investor is a person who likely made some costly mistakes early on-see if you can find out more about where they went wrong and not just their success.
D. Read and listen: there are countless books, blogs and podcasts on the subject of real estate and stock investing, many geared toward beginners.
E. Attend workshop: free seminars can kick start your path to educated investing and taking control of your financial future.
F. Ongoing education:- learning is a lifetime purpuit because things change. Laws, regulations, and terminology adapt over the years, so keeping current is on investment in your future, investors who allows themselves to become stade will no doubt face numerous risks. Losing momentum, legal ramifications etc.