Honestly speaking, in today’s world, saving you money doesn’t necessarily guarantee a stress-free life after retirement, which is probably what most of you are concerned about, right? Anyway, whether you’re still in your years of youth, already retired or just about to, making smart decisions about investments and ensuring you get as much as you can out of each of them largely depends on fees and following the best professional advice. Hence, this Fundrise review article.
There’s usually a high chance of you mismanaging your wealth if you don’t use one of the two we’ve just mentioned. However, articles such as these are very good resources as well, which can help reduce the likelihood of that happening. So without further ado, below is some advice and useful tips that will help ensure you make the correct as well as more profitable investment decisions.
1. Understand the Investment Plan and the risks involved
Don’t make the common mistake most people do such as investing in a venture or a plan you don’t fully understand or know nothing about. Those that do this, make decisions based on popularity or because they know someone who did well. These assumptions sometimes work out badly and are merely just that if they aren’t proven otherwise.
It’s usually not the investment plan or business venture that’s bad, it’s the fact that you lack the knowledge of how to make it work. That’s the reason why you lose money. Before you jump into any venture or investment plan try as hard as you can to fully understand what you’re getting yourself into. Before you make any investment decisions always consult a financial analyst/advisor.
2. Consider ventures that will offer you immediate annuities
If you’re looking to get guaranteed income payouts then annuities would be your most reliable options. Annuity investing means you’ll be getting a monthly income instead of payments over several years or a large sum while you’re still alive. There are several different types of annuities that exist. Each comes with their own specific features and can be quite pricey as well.
Consulting a trusted financial analyst/adviser will be your best bet before making any solid decisions on what type of annuity you’re considering investing in. You should not try to go at this type of investments alone. That advice you won’t only get from here.
3. Avoid focusing on one risk
The third tip in this article is to try and avoid getting stuck overthinking one risk. The truth is that all investments have a certain degree of risk attached to each of them. This proves true, especially when concerning stock market investments. Nevertheless, always remember that avoiding such risks can sometimes be its own a great risk which could cause the increase of other types of risks.
Some of these other types of risks you may be exposed to include the possibility of outliving your own money and longevity risk. Financial advisors often advise retirees to consider certificates of deposits or short-term ventures and other similar investments because they’re kind of risk-free assets. This is due to the fact that when one invests in such they may still have access to guaranteed returns of capital. These are normally the risks worth taking.
4. Avoid bad predictions
The most common two ways prediction mistakes are made is by, one, mistaking logical patterns and two, extrapolating recent pasts. If you want to make better decisions when it comes to this you’ll have to start establishing the facts behind that particular prediction. Even in this information-saturated world of today, it’s funny how some decisions are still made without factual backing. Try not to believe everything you see and try to do your own little due diligence.
Also, always consider the source’s motivation. If you got the prediction from a news source that adjusts its coverage towards its ideological requirement, then you might want to think again. This adjustment may compromise that particular prediction. Try as much as you can to always listen to your own psychology. Merely acknowledging the state of your emotions can help you a lot when recognizing bad decisions.
Therefore, money management is always an emotional affair. Investing successfully isn’t solely about balance sheets and numbers. Serotonin and dopamine also play a very big role. Hopefully, this article has helped you understand that a bit. All in all, always try to run your investment decisions by someone who doesn’t share a similar emotional state as you do. That means avoid close friends and family members. As harsh as that may sound. However, not all of them will lead you astray. Nevertheless, it still really all comes down to you.