As a follow up to my article ‘how to invest wisely’, today i will be talking about pitfalls you should avoid in your investment journey. Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor. For instance, the biggest investing mistake that you could ever make is not invest at all, or to put off investing until later. Make your money work for you – even if all you can spare is $20 a week to invest! Do it starting today. Remember procrastination is the thief of time.

While not investing at all or putting off investing until later is a big mistake, investing before you are in the financial position to do so is another big mistake. Get your current financial situation in order first, and then start investing. Get your credit cleaned up, pay off high interest loans and credit cards, and put at least three months of living expenses in savings. Once this is done, you are ready to start letting your money work for you.

Don’t invest to get rich quick. That is the riskiest type of investing, and you will more than likely lose. If it was easy, everyone would be doing it! Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know you will need the money in a short time, and then stick with safe investments, such as certificates of deposit. Certificates of deposits also referred as CDs. This is a time deposit,  a financial product commonly offered to consumers by banks.

Don’t put all of your eggs into one basket. Scatter it around various types of investments for the best returns. Also, don’t move your money around too much. Let it ride. Pick your investments carefully, invest your money, and allow it to grow – don’t panic if the stock drops a few dollars. If the stock is a stable stock, it will go back up.

A common mistake that a lot of people make is thinking that their investments in collectibles will really pay off.  A collectible is any physical asset that appreciates in value over time because it is rare or it is desired by many. Many people think of collectibles as things like stamps, coins, fine art or sports cards, but there really are no strict rules as to what is or is not a collectible. Don’t count on your Coke collection or your book collection to pay for your retirement years! Count on investments made with cold hard cash instead.

To your investing success!!!

In order to succeed as an entrepreneur, you need to understand and appreciate the essence of saving money. Money is a commodity which makes our lives easy and brings a lot of comfort in life. Money is a commodity which you need to use to make more money for you. But how do you do this?. You can do this by investing your money wisely.

Investing is not a sure thing in most cases, it is much like a game of cards – you don’t know the outcome until the game is concluded and a winner is declared. Anytime you play any type of game, you have a strategy in mind on how you can win that game.  This principle also applies when you are investing your money.

You need an investment strategy in order to safely navigate the mucky waters of financial instruments . An investment strategy is basically a plan for investing your money in various types of investments that will help you meet your financial goals in a given time. Each type of investment contains individual investments that you must choose from. The stock market is a type of investment, with different types of stocks, which are held by different companies in different sectors of the economy. If you haven’t done your research, it can quickly become very confusing – simply because there are so many different types of investments and individual investments to choose from. This is where your strategy, combined with your risk tolerance and investment style all come into play.

If you are new to investments, work closely with a financial planner before making any investments. They will help you develop an investment strategy that will not only fall within the bounds of your risk tolerance and your investment style, but will also help you achieve your financial goals. Never invest money without having a goal and a strategy for reaching that goal! This is essential. Nobody hands their money over to anyone without knowing what that money is being used for and when they will get it back! If you don’t have a goal, a plan, or a strategy, that is essentially what you are doing! Always start with a goal and a strategy for reaching that goal!

Different Types of Investments

There are three different kinds of investments. These include stocks, bonds, and cash. Sounds simple, right? Well, unfortunately, it gets very complicated from there. You see, each type of investment has numerous types of investments that fall under it. There is quite a bit to learn about each different investment type. The stock market can be a big scary place for those who know little or nothing about investing in stocks. There are also three types of investors: conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance: high risk and low risk.

Conservative Investor

If you are a conservative investor your best bet will be investing in cash. This means that you can put your money in interest bearing savings accounts, money market accounts, mutual funds, Treasury bills, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments.

Moderate Investors

If you are a Moderate investor you could invest in both cash, bonds and you may also dabble in the stock market. You can also invest in real estate, providing that it is low risk real estate.

Aggressive Investor

If you are an aggressive investor you can invest in the stock market, which is higher risk. You can also invest in business ventures as well as higher risk real estate.

Caution: Before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you. Understand the risks involved, and pay attention to past trends as well. History does indeed repeat itself, and investors know this first hand!. You can borrow a leaf from Warren Buffet, the world’s number one investor who has defied all odds and consistently reaps big on the stock market.

In order to deepen your knowledge on various investment vehicles available, you can buy a book entitled, ‘The Real Warren Buffet by James O’ Loughlin. Suggestions and contributions on other investment vehicles will be greatly appreciated.

First ten people to comment and make contribution to this post will receive my free eBook titled ‘Real Estate Investment Secrets.

To your successful investing!!!!!