It seems like every year a handful of new financial flash in the pans pop up and thoroughly convince people that they are a sure thing when it comes to making money. These people are thoroughly taken in, and they make many poor financial decisions as a result.
The good news is, it is possible to avoid these financial flash in the pans and avoid getting in over one’s head with risky investments or outright cons. Here’s how:
Think it Through
It’s an obvious piece of advice, but it bears mentioning because so many people see or hear about a new financial fad and it’s supposed benefits, and they immediately jump in without even thinking about it or even getting advice for a good financial advisor. The rush to invest in Bitcoin after a recent boom was a prime example of this, which didn’t play as out well for many people as they expected, but there are literally thousands in history!
What you should actually do, unless you have a never-ending pit of money to throw at risky investments, that is, is sit down, research as much as you can about this new investment opportunity, and possibly talk to a reputable financial adviser who will be able to cut through the sparkle and get to the truth.
Remember Celebrities, TV Commercials and Other Media are Not Financial Advisers
One of the reasons why so many people decide to get involved in dodgy get rich quick schemes is because they see a celebrity or favorite TV channel/ website or newspaper endorse it, and they trust that source. The thing is, these people/media are paid to recommend that sure thing – they don’t actually know if it will help you to grow your pot or money and it’s unlikely that they have invested anything themselves.
Find a Reputable Broker
Regulated brokers register with government agencies that issue them licenses. You should always seek to do business with them when you’re thinking of investing, rather than people you see on the TV or those who advertise online and have no credentials to back up their supposed expertise. If they aren’t certified – don’t even think about buying what they’re sellng.
Invest in You and Your Family
Before you even think about giving money to any of these financial flashes in the pan that will undoubtedly come and go this year, look at your own financial situation. How is your 401(k) looking? Do you have enough cash saved to send the kids to college? Would using your savings as a downpayment on a house save you more money than you’d earn from your investment when you no longer have to pay high rents? If it turns out that you could use your money to secure your future, then it’s always worth doing that ahead of plowing your money into a financial flash in the pan. Hold your future and the future of your family front and center in your mind when you’re being pitched to, and you’re much less likely to succumb.
Avoid the financial flash in the pans, with help from the above ideas, and you’ll have more of your money left at the end of the year (and hopefully a bit more) than you would if you succumbed – I can almost guarantee that.