Top Investment Myths That Can Ruin Your Profits

May 16, 2023

It is easy for investors to fall prey to investment myths because there are a lot of unpredictable possibilities associated with this. These misconceptions are myths that are very close to the truth that will confuse investors and cause them to make faulty financial decisions. These decisions are not only absurd, but they also cause losses. As such, you must understand the difference between investment reality to become a successful investor without making wrong financial decisions.

Listed below are specific tips that can help you understand the myths related to investment so that you may avoid them when you are making investments for success.

Investment is just for the rich

One popular myth about investment is that it is only for the rich. Investment is complicated, but it also depends on how you handle it. If you want to make it simple, you can do it. However, you must research charts, complex derivatives, and stocks and then make investments. These investment strategies are complicated, but the minimum capital required to invest in these is also relatively high. However, if you make investments here, you will be returning good profits. Today they are various online platforms that help you make investments and start low.

Savings can help you have a secure future

It is true that saving is vital to have a secure financial future, but on the other hand, investment is equally important to prevent inflation. Hence, if you do not want to lead to the erosion of your wealth, make wise investments. Even if you put your money in fixed deposits, you cannot beat inflation years later, as such investment is significant. However, mindless investment does not make any sense. It would help if you were prudent enough to invest your savings in assets such as gold, debt, equity, and real estate to defeat inflation by having a good margin creating wealth even in long-term scenarios. Therefore, you can say saving and investing is the best financial instrument to help you financially secure your future.

Savings can take care of your post-retirement life

The impact of inflation and the rising lifespan of people can affect their standard of living in the post-retirement days. If you retire at the age of 60 and you live till the age of 85, then you will be working for around 35 years, and you have to accumulate wealth for another 25 years of your life where you will not be working so that means you have to have a substantial source of income even in those years when you will not be working. Your Provident fund will indeed grow over those years. However, you have to make other investments, too, to have a good standard of living during your retirement years. You may go to a reputed retirement planning website to plan better.

Life insurance is also an investment

One of the biggest myths that people believe is that life insurance policies are nothing but investment products that will cover various benefits, which is not valid. Insurance policies are nothing but risk mitigation tools that can help a family in case something unfortunate might happen to you. Therefore, buying a term insurance policy can get you significant cover at a meager premium.

Many investors do buy insurance policies with low cover because insurance agents tell them that it will guarantee them higher returns and it will secure the family members if something unfortunate happens. It is just like telling a lie relatively close to the truth. In reality, the amount that is given at the end of the investment could hardly meet the expenses of the dependent for a few years. Since the money will not be growing at the desired rate to secure the future of your loved ones, it is better to make other more secure investments.

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Andi Perullo de Ledesma

I am Andi Perullo de Ledesma, a Chinese Medicine Doctor and Travel Photojournalist in Charlotte, NC. I am also wife to Lucas and mother to Joaquín. Follow us as we explore life and the world one beautiful adventure at a time.

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