Using Discretion When Making Financial Investments - Don't Invest Because Your Friend Told You To

2개월 전

A few months ago, one of my friends presented me with an apparently good investment option, and while I understand that it was done with the best of intentions, there were numerous flaws in the investment. Many things, for example, pointed to red flags in the investment, such as high ROI, dubious perceptions, ponzi-like structure, and so on. My instincts told me that the business was a bad idea, so I told him to give me some time to analyze the investment further.


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"I have already invested, trust me, it is a good opportunity," he tried to persuade me. Even so, I was adamant about not going into it without first performing a comprehensive personal research. After a few days, I was still attempting to acquire information about the investment, and I heard that the site crashed and all investors funds are gone. It would have been a case of "had known" if I had gone against my instincts to invest as well.


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It's not enough for an investment to appear promising; you also need to examine it to see if it's suited for you. You'll agree with me that just because an investment isn't bad for others doesn't imply it's a good idea for you. The reality is that some of the investments that people fail at are not usually due to a scam, but rather to a lack of information. You must first identify what works for you and what does not in order to choose the type of investment you should make. Consider someone who is timid or quiet who wants to work in retail marketing. How will they interact with people who are interested in the things they are selling?

More importantly, when it comes to investing, there is often a secret voice that speaks to you in the back of your mind about the investment. Some people call it instincts because your mind occasionally sees things that your eyes can't see right now and tries to stop you from making a bad investment. There was a moment when a close colleague introduced me to a specific investment. My instincts told me no at first, but because the person who told me about it was not someone I could simply tell "no," I decided to ignore my instincts. So, I told myself, "the investment might turn out great in the end," and I decided to give it a try. After investing on emotions, everything went bad a few weeks later, including my friend's money. My sole saving grace was that I only invested a small sum of money; otherwise, my life would have been ruined.


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That specific bad investment taught me a harsh lesson in life: when it comes to investing, you must learn to separate your emotions from your analysis and stick to it. It doesn't matter who brought you the investment; you should still perform your own research, and there is a need to exercise decision when investing. Prior to investing, you should seek clarification from the person that brought the investment opportunity or idea, you should make your personal research on the investment so as not to regret later.

To prevent the phrase of "had I known," you should diversify your capital and not put all of your money into one investment. Another thing to keep in mind is that if someone puts pressure on you to invest in a particular firm or gives you less time to analysis and make the proper research you need, then something isn't right. Allow no one to take advantage of your mind and force you to do something you don't want to do or force you to invest against your will. Learn to say "No" and stick to it without feeling obligated to justify yourself.


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Another factor to check for in a business opportunity that might raise "red lights" is whether the investment terms are unreasonable or unaffordable. Imagine someone offering you a 500% return in a week; how does he expect to keep such a high rate of return? Or someone making you false promises that you can readily detect, so don't brush it aside because "it doesn't matter." The minor detail you neglect today could turn out to be your worst enemy tomorrow. And finally, don't ever try to catch a falling knife, for instance a crypto investment that's crashing , and people are using the opportunity to pump and dump it in the aim to make quick and huge return, I would advise you don't join that kind of investment as you might be unlucky to buy at the top, this happened to me in LUNA investment, and since then I've been more careful when it comes to investment.

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Wise investment goes beyond sheepishly following friends' suggestions, it requires proper research from one's end. Thanks for sharing this piece with us.

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This is such a great post! You must write more!

when it comes to investing, you must learn to separate your emotions from your analysis and stick to it

This is such wise words. I often let cold feet get the better of me. (•ิ‿•ิ)