Investing isn’t that simple. You don’t just take a chunk of your savings and dump it in some real estate or in some other “asset”. It’s a lot more complicated than that.
But that’s what I actually used to think, and that’s what many beginner investors I know think too.
They think they know what they’re doing. They think they’re building their financial future But they’re actually “gambling” their savings away.
So to protect you from making the same mistakes, here are the 3 warning signs you’re gambling your savings – instead of investing it. (My comments will follow.)
Gambler Alert #1: You Invest In Things You Don’t Understand.
Many many investors – even experienced investors – go into investments they don’t really understand.
Take Forex Traders for example. Even traders that have been trading for decades don’t always know what they’re doing.
Most of the time they’re just guessing…
Guessing that the US Dollar will go up, or guessing that the US Dollar will go down.
Sure, it’s possible that some amazing traders have gotten trading down to a science.
But what about everyone else?
Are they investing – or are they gambling? You tell me…
Gambler Alert #2: You Invest In Things That Are Emotionally Exciting
“Wow, this investment is going to make it big I’m telling you.”
If you find yourself talking about your investments all the time to friends and family.
That’s a big red flag.
Remember back in 2017 when everyone, including the mainstream media, was talking about Bitcoin?
Everyone was hyped and convinced it would keep rising and rising.
TONS of money was “invested” into Bitcoin.
Some people even re-mortgaged their homes to get in “before it’s too late”.
And that’s what emotion does to you.
It’s no different from a gambler that keeps playing and playing because he is emotionally hooked.
And that brings us to…
Gambler Alert #3: You Have No Exit Strategy
This is why casinos make so much money.
Most gamblers don’t know when to quit…
When they’re on a winning streak. They just keep playing…
“I’m on a roll.”
They think they’ll stay lucky forever.
Instead of cashing out while they can, they just keep playing.
Then when their luck turns and they start losing…
They can’t accept defeat.
Instead of leaving and calling it a night, they keep gambling to “win it all back”.
They keep betting and betting and betting.
Until there is nothing left they can bet with…
And the same happens to many investors.
When Bitcoin started falling…
Many didn’t know how to cut their losses.
They were in too deep…
Some even put MORE money in. Hoping it would bounce back and that they’d make twice as much profit.
But that didn’t happen. And it wiped out a lot of people.
Now I’m sure you don’t want that to happen to you. And if you’re anything like me, you’re not looking to gamble your savings anyway.
Here’s What To Do Instead
If you’re unsure what to invest in, then why not just invest in yourself for now?
What have you got to lose?
That’s what I started doing…
Instead of putting my money in things I didn’t understand…
I just started attending more events, taking more courses, and reading more books.
This gave me an edge over other investors. And when I was ready to start investing, I had shortened the learning curve a lot.
There’s no reason it can’t be the same for you.
Keep learning and keep growing.