Making money is very essential to living. But then, it could be very hard to make money, especially in this trying times characterized by dying economies, poor economic policies on the part of the government and other policy makers, poor financial management decisions on the part of individuals and bad business decisions on the part of businesses. I wrote an article about how to set up and engage on your Instagram account so that you can make money online here. You can also check this article to see super cool ways you can make $100000.
We work hard and save our money for the “rainy-days” or emergency situations like health issues, disasters, accidents, holidays or vacations, renovations and so on. But when we lose this hard-earned money perhaps unknowingly due to our naivety and foolery, it can be very painful and heart-wrenching. We live in a fast-paced, consumer-focused world where it can be very easy to lose money.
The truth is that there abound many unbelievably simple and subtle ways to lose all your money. We need to ensure that we avoid getting into these black holes of wealth. Let us learn from each other’s mistakes and bad experiences.
Let’s consider these 2 subtle and naive ways you can ALL your money and see how you can identify and avoid them thereby minimize their impact.
1. Impulse Buying.
Impulse buying is a situation where you buy an item or pay for a service that you did not plan for usually because of a whim or emotional surge to buy something as a result of advertisement and placement or just plain band-wagon effect.
Imagine these two scenarios:
A banker just bought a #4500 pair of shoe which eventually hurt his foot on black Friday sales.
I bought an over-sized gown worth #5500 for my girlfriend online just for fun.
Scenario A brought pain but Scenario B brought laughter. Still, both scenarios were a total waste of hard-earned money.
2. Buying Penny stocks.
Penny stocks are stocks that are valued at less than $5 per share. Penny stocks usually seem like safe investments. The numbers vary widely, but the story always ends the same: More penny stock traders lose money than they make money. Penny stocks can seem very alluring, after all, you might reason that you are not investing your money heavily in the stock. But many stock buyers are usually unable to separate and identify the true or real value of a company from its share price, and stock buyers often wrongly believe that buying more shares in a company can give them a better chance of making more money.
Take, for instance, you may reason that buying 100 shares of a $1 stock may seem like a better deal than buying 1 share of a $100 stock. This is a dangerously misguided reasoning. Penny stocks are dangerous to your wealth because they are issued by less established companies and don’t trade on a public exchange where regulations on disclosing events are not really being enforced. This means that when you buy penny stocks, you will not get any form of information about the companies underlying activities like what they do and how they performed in the last quarter, which invariably means that as a stock buyer, you are not protected from losses in your investment.
Let me know what you think in the comment section.
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