Benjamin Graham once said that, "The investor's chief problem- even his worst enemy is likely to be himself."
There're some bad habits that you must quit if you want to get your desired return from your investment.
If you want to make money with your money, there're some basic rules to follow and there're some bad habits you need to quit. Doing one of these from the following habit will slow your progress if getting rich!
Trying to Be Rich Overnight
You have to admit the fact - there's no shortcut to success. If you see any way to get rich overnight, 99% chances are that would be a scam! Or the way could be gambling where if you lose, your fall would be devastating.
“If you aren't thinking about owning a stock for ten years, don't even think about owning it for ten minutes.” - Warren Buffet
Don't be upset! This is the most common investment habit that almost everyone did once in a life. So, don't think you're the only one with mistakes! I invested in some HYIP sites which promised to double investment within 3 months and guess what! That company doesn't exist anymore and the police are still looking for those scammers!
The point is there's no shortcut - you've to earn every penny by hardworking, dedication, commitment, and using your business mind of course. Remember, hard work pays off!
Spending before Saving
If you save a Dollar today it will save you tomorrow. Spend only when you have money after saving. Your calculation should be -
Okay, most of the readers may disagree with me. Most of the people think to save the money, which stays after spending.
That's a bad idea. Pay yourself first! Save money so that you can invest in the future. After saving a certain amount try to cover living costs with the rest of the money.
If you want to get fruit later, I suggest you take care of the tree right now by minimizing your cost. So, save before you spend it!
Giving Your Money to Expert to Invest
This is the most common mistake investors and traders do a lot. Nobody care for your money as you do! This is simple math. If my friend gives me some money to trade on the market, I will trade recklessly to earn some commission. Because I don't actually care a lot if the investment is gone! But if it is my hard-earned money, I won't trade like that, I will do more analysis.
“When an individual with cash meets an experienced individual, that individual with experience ends up with cash and that individual with cash leaves with experience.” This was Warren Buffett’s response when asked about his best investment advice. Source
So don't give your money to some investment Gurus, rather try to learn trading or business and trade yourself. But the truth is most of the successful people suggested this, but I didn't like the idea. Only listen to those you know and trust. Get some advice from them, but don't give your money to them.
According to Warren Buffet - “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
Embrace the fact - Neither we own a Rolls Royce, nor we own that kind of money to depend on others! Better make your profit by yourself to own a Rolls Royce!
Invest in What You Don't Know
Peter Lynch once said, "Never invest in an idea you can’t illustrate with a crayon."
In the beginning, I told you that I lost a good amount of money on some HYIP sites. Well, some years ago one of my family friends came to me with an investment idea. It was a HYIP site with a multi-level marketing feature. He told me if I invest a fixed amount of money every week, the company will give back investment + profit gradually from after a month.
I was jealous and thought - why not! Without thinking further, without understanding the business policy, I just invested. My duty was to pay them every week and wait for my return. And as my family friend suggested this, I trusted like a fool. You can imagine the outcome!
I got just half of my investment back and then one day the company vanished without any notice. This is a real-life lesson about - you should not invest without understanding and checking thoroughly!
“Never invest in a business you cannot understand.” – Warren Buffett
Invest with Emotion
Someone earning a lot from any specific business doesn't mean that you'll earn that kind of money as well. You could face loss eventually. That someone is successful because he may have a vast knowledge of that sector and he may have struggled a lot to achieve that success.
We see lots of emotional investment and trading in the stock market. Sometimes investors trade with their feeling like - It's time for the market to go down, I should sell. Which is totally like gambling, those investors should probably invest on gambling site like Bet365 rather than stock market. To trade to market he needs technical and fundamental analysis, news analysis, and so on!
Depending on One Income Source Only
This Covid-19 epidemic shows us the importance of income from various sources. Think about aviation sectors! Financially, the aviation sector was the sector which was hit first badly. I know a lot of travel agency owners who earned a lot once, but now is in a very bad situation.
If they had other sources of income, they may not have fallen into this financial problem. No investment in this world is secured and guaranteed. Never rely on one source. You should invest some money in other sectors, if you don't have time to think about other businesses than at least invest your idle money to the stock which's price is at the lowest point. Make your money work for you too.
Investing without Passion
Warren Buffet said - "Without passion, you don’t have energy. Without energy you have nothing."
You and I probably left our work to enjoy life if we ever earn a couple of million dollars. But you can take Warren Buffet as an idol who is 89 years old and still working regularly with passion! KFC founder Colonel Sanders didn't achieve his remarkable rise to success until his 60s!
So we should learn from the story of successful people, The truth is if we don't have a passion for our work, we can never think to earn a decent amount of return from our investment.
Which of these bad investing habits are you doing regularly?
Do you think that it's simple to get out of these faulty investing practices?
Let me know in the comment section.
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