3 Laws of Investing

Ignorance of the law they say is not an excuse, this same rule is applicable to investing.  I use to pity people whenever they talk about investing when they actually know nothing about it, especially when they lose their money. Many thought investing is like saving money in the bank which they can withdraw at will without knowing they can invest and really lose all their money. 

In case you don’t know, an investment could be an asset you purchase with the purpose of generating income with in the future because you believe it must have appreciated in value. Also, you may define investment as a monetary asset bought with the aim that the asset will generate income in the future or appreciate and be sold at a higher price. 

Whoever way you consider or view the subject of investing, its purpose is to generate income for you in the long run. If this is so, you don’t have to lose money while trying to generate money. 

A Chinese proverb says “money making is like digging with a nail, while losing money is like pouring water in the sand.” For this reason this article was written for you to consider before you invest your hard earned money in whichever area you deemed fit. Therefore below are 3 laws to obey before investing. 

Remember, the ignorance of these laws should not be an excuse, and its violation may lead to poverty. 

Law 1. Do your Homework!

Hundreds of people fall victims of this error and a wise man once said that if you continue in error, you might end up in horror! Many young entrepreneurs are not left out in this investment error until the money they have over the years worked for fizzle out like smoke in their own eyes.  

How do you desire to make money if you don’t know what you’re doing? The best thing is; before you start as an investor, you have to do a lot of market research which many young entrepreneurs didn’t do. By investigating, you know the in and out of what you are investing your money on. Investigation and market research is a lifesaver of investing

Law 2. Invest in things you fully understand 

Before investing a cent in anything, you must consult books and experts on the subject. You should also take advantage of what experts refer to as “piggybacking.” It’s an investment term which means working with and learning from people who are more experienced than you. In any area of investing you choose, you must have mentors who will be guiding you. Make sure you understand the business that the company is in - don't follow these blind stock tips! You should always be an educated investor!

Law 3. Test before investing 

every investment needs a qualitative testing or pre-investing exercise but many start-up entrepreneurs do ignore it. For instance, in the stock market investment, experts say smart investors invest on paper for days (for like three months) before investing in a real life market. This is very similar to demo trading in online Forex trading. Many brokers offer paper trading accounts if you have an open account with them. Try this out before throwing your money away!

Do the above and become a good investor, ignore them and have yourself to blame.