When it comes to financial matters it can be hard to always know what to do. Should we invest? Should we save? Although it isn’t always easy to understand the answers, it may be easier to understand when you explain the mistakes other may have made. Here are a few common mistakes:
Doing what everyone else is doing:
If your best friend decides to invest in the stock market, you decide to follow her lead just because she is doing it. This is not a wise reason to invest. A wise reason would be after researching the market and considering your long term and short term financial goals.
Don’t just invest your money
This sounds good in theory. Yet, you should only invest when you can really afford to be investing and when the timing is right.
Forget the fact that you can make money off of bonds
Many people have forgotten that bonds can be a good investment tool. You may just want to go for shorter periods of time when investing than in the past.
Don’t expect a high return rate
Most investment tools will not get you a high return rate right now. Yet, slowly these rates are improving and remember this a little return on your investment is better than no return at all.
The best advice here is to do the math and consider where you can get your best rates. You should also be truthful about how long you can actually invest your money, without having to withdraw it. Remember some investments will penalize you if you withdraw from them early.
Don’t have too much faith in your broker
Yes, your broker is in it to make money. Remember this fact. You should also watch what he/she is doing. Don’t have complete faith that he/she is always making the best decisions for you. You may even want to switch to a financial planner who doesn’t make any commission off of your finances.
Keep your portfolio diversified
As the saying goes, you don’t want to put all of your eggs or rather in one basket. Diversify it to make the greater amount of money possible.
The worst mistake anyone can make about their finances is to simply ignore them. Try to keep as up to date all the financial world and your financial world as you can. Know what you owe. Know where your assets are.
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