Once you make the decision to become a millionaire investing, the next thing is working out your investment strategy. Whilst choosing the right professional and career path can help earn a greater income, it’s what you do with your earned income that counts. You can’t earn your way to wealth. You’ve gotta invest your earned income, turning it into passive or portfolio income so that your money works for you.

Risk = Not Knowing What You’re Doing

In business, life and investing, you have to decide not whether to take risk, but rather, what kind of risk(s) to take. Every investment or business decision implies some element of risk ranging from low to high.

The Cambridge dictionary refers to risk as ‘the possibility of something bad happening’. When it comes to investing money, many people think of risk as the possibility of losing part or all of their money. Investment professionals can refer to risk as the ‘variability of returns’ and your typical fund manager will see risk as the difference between expectation and results. My all-time favourite quote about risk comes from none other than Warren Buffet: “Risk comes from not knowing what you’re doing”. I think this nails it.

The Investor…The Biggest Risk in Investing?

The biggest risk with investing is not so much the investment vehicle but actually the investor. If an investor can plan, remain unemotional and become financial literate than riches and wealth are guaranteed.

Many financial advisors and professionals speak of understanding risk and the inherent trade-off between risk and reward. But oftentimes, this falls on deaf ears and people ignore the risk associated with their investment strategies. Why is this? Well, there are 3 likely reasons

Comments are closed.