We all want to be financially prosperous. However, someone succeeds, while someone does not. Mistakes in money handling make everything. What then is the secret of wealth? It turns out that there are five "bad habits" that can prevent you from getting rich.
Bad advice number 1. Invest yourself
In situations where the stock market begins to plummet, in no case should panic. There must be a clear understanding of what and why you are doing. If spending a few hours a day on market tracking does not allow a tight schedule, it is better to hire a good financial adviser.
When investors experience stress, the chances of making a bad decision increase. In order not to worry about their capital, the rich invite specialists in money management.
In practice, most wealthy people do not try to manage their money on their own, they hire financial experts to protect their assets and reduce risks.
Bad advice number 2. Make one bet
Wealthy and successful investors must invest in different assets.
There are many examples in history that “putting all your eggs in one basket” is strategically wrong. For example, the energy company Enron, many of whose employees have invested all their retirement savings in its shares. When the company went bankrupt, all the savings burned out.
In addition to stocks and bonds in the investment portfolio, wealthy people invest in instruments such as real estate, limited liability companies, and private markets. Thus, if the stocks have a really bad year, you can compensate for the difference in profits in real estate, or vice versa.
Another plus of real estate: the ability to earn rental income. This source can become an airbag if you lose your main job.
Bad advice number 3. Catch the hype
Super-rich do not play with untested and new instruments.
Take bitcoin, for example. Cryptocurrency soared in 2017, instantly making some investors millionaires. After that, everyone rushed to buy it.
This can be justified if you are a professional trader or just want to gamble. Nevertheless, such untested “chips” as Bitcoin are a risky investment.
Bad advice number 4. Do not plan
Wealthy investors are patient and think not about short-term, but about long-term profit. They have a clear investment strategy, which they adhere to without hesitation. In investing and saving capital, discipline is very important. You must admit that it’s not just to invest another amount of money in a falling market, but this is what is the key to financial success in the future.
Most people do not plan how they are going to invest their savings over the next 20 years. Successful financially people do this all the time.
Try to start small today.
Bad advice number 5. Panic
The rich are not inclined to give in to emotions. Money handling does not tolerate anxiety and negativity. If you succumb to panic, the likelihood of losing capital is much greater.
In the long run, you will find that wealthy people created their fortunes because they were optimistic, rather than becoming optimistic because they were rich.