Everyone wants to make their money work for them.
There are a good many investment opportunities that enable this to happen. As you probably know, not all of these investment opportunities are fruitful.
In fact, some of them are so prone to failure that they should be avoided entirely. Curious as to what they are? Then keep on reading.
Here are four money mistakes for you to stay away from.
Spending the Max on Your House
One of the most common investment mistakes is spending the max on one’s house or spending far more than one can reasonably afford. You might be thinking that a more expensive house equals a better monetary return over time. In some cases, this certainly ends up being the case.
However, there are just as many situations in which it isn’t the case. Plus, do you really want to spend all of your would-be disposable income on shelter? Don’t forget about the risk of foreclosure; if you hit financial downtimes, you might not be able to make payments and could lose your house (and investment) entirely.
Unless you’re absolutely loaded with money, you should spend no more than 3.5 times your yearly income on a house. The less you spend, the better off you’ll be in the long-run.
For every restaurant that succeeds, there are about seven or eight that don’t. That’s right, around 80% of restaurants go out of business within the first five years of their existence.
Not only is it risky to start a restaurant of your own, but it’s also risky to invest money in a restaurant. Unless you have a lifelong dream of opening a restaurant (and are willing to put in tons of work), this idea is better left avoided.
When it comes to buying stocks, no stock is more dangerous than the penny stock. Costing less than $5 per share, penny stocks might seem attractive to those with a little disposable income. However, in truth, they’re almost perpetually shrouded in volatility and corruption.
See, penny stocks are commonly used to facilitate pump and dump schemes. While you might get really lucky with one, the greater odds are on you losing your money entirely.
On their surface, timeshares look like a great idea. After all, you’re getting a reliable vacation house, and for a reduced price at that. What’s the downside?
The downside is that you’re locked in and that you have very little freedom as to when you can use your vacation house. If you ever decide that you want out of the agreement, you’ll have to scratch and fight (and spend even more money) to make it happen. Learn more about the dangers of timeshares now.
These Money Mistakes Can Ruin You Financially
Put simply, these money mistakes can ruin you financially. There are tons of other investment options out there. Find something less volatile and your money will work for you.
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