You are where you are now financially because of the decisions you made in the past. If they were bad decisions, it’s because you didn’t think things through clearly enough. Something looked good and you went for it, only to realize that there were a lot of things that you didn’t know at the time you leaped into the new venture. If you had known better, you would never have started in the first place.
Moreover, one bad decision leads to another, and before you knew it, you were heading on a downward path. So not only did you lose your money and have to take on desperate work to manage your expenses, but you also suffered loss of hope, resulting in feeling completely demoralized and apathetic.
Before taking a look at how to think clearly about investments, let’s take a look at three examples of what it means to “leap before you look.”
- Bitcoin. You hear about Bitcoin and educate yourself about it on the Genesis Mining website. It sounds so good that you don’t do your homework and get in over your head. Does this mean that Bitcoin itself is a flawed concept? No, all the facts you gleaned about it were accurate. However, what was not accurate was your understanding of how to use it as an investment vehicle.
- The stock market. You hear about the fortunes made in the stock market by ordinary people just like you and educate yourself about it from a few high-quality websites. You then begin paper trading. Pretty soon, you make tens of thousands of dollars on paper. Excited at the prospect of turning your finances around, you then leap into the actual markets. Unfortunately, you find that when you were paper trading, you thought about things in a calm and rational way. However, in the real markets, you find yourself overwhelmed by the strong emotions of greed or fear and start making all sorts of bad decisions. Instead of making a fortune through the power of leverage and stop orders, you lose what little money you had.
- A business opportunity. You attend a seminar, say, about how to make a fortune flipping houses. The captivating instructor tells you about how he went from rags to riches by buying dilapidated houses for no money down, using the property as collateral to get a bank loan, fixing the houses, and selling them for a handsome profit. You pay a large amount of money for the special training workshops. After the training, you find everything much harder to do than you had been led to believe. You can’t find the right homes to buy. You can’t figure out how to negotiate a good deal. You can’t get a bank loan big enough to cover the renovations. Or you can’t seem to sell the house after it’s all fixed up.
The Blame Game
If you’re reactive, you’ll put the blame on how cryptocurrency works, how the stock market works, or how the real estate market works.
If you’re honest, you’ll have to admit that these techniques have worked for some people. For instance:
- · Charlie Shrem and Roger Ver made a fortune from Bitcoins.
- · Paul Glandorf, a pipe fitter in Ohio, made a fortune in the stock market.
- · Sidney Torres transformed a $40K investment in flipping houses into a $250 million real estate fortune.
Why You Lost Money
Here are 5 common mistakes you might have made, resulting in your losing money in an attempt to make money:
- 1. You didn’t do your due diligence. You gleaned enough knowledge about something to get excited about it, but didn’t spend enough time look into it deeply enough.
- 2. You didn’t start small, but went all in. Although you learned from your mistakes, you ran out of the money you need to continue.
- 3. You didn’t organize the right study materials.
- 4. You didn’t stay focused on your studies long enough to learn what you needed to learn to take effective action.
- 5. You didn’t have a mentor, just someone selling you an instruction course. While much can be learned through academic study, a hand’s on mentor can show you things that you never came across in your readings.
Look Before You Leap
Looking before you leap is not just learning more about a business or investment opportunity; it’s also about learning deeply enough about how something works to be effective at making it profitable. You can achieve any dream if you back it up with a sound plan of action to organize all the resources you need to be successful at it.