The Basic Rules Of Investing

Investment is one way to achieve financial freedom if one can succeed in their investment plans and strategy. It is one way of building wealth; if you want to start building wealth, you must begin investing early. However, investment comes with risk, so you should know at least the basic rules of investing.

Here are the three very basic rules of investing you must know or apply:

• Do not trust scam investment

• Do not invest money you can't afford to lose

• Never put all your eggs in one basket

In this blog, I'll elaborate on the three basic investing rules. Before jumping into any investment and applying it for your successful investment journey, you must know it first.

Do Not Trust Scam Investment

Scam investment is rampant nowadays, especially in crypto. According to Federal Trade Commission (FTC), more than 46,000 people reported losing $1 billion in crypto to scams when 2021 started.

It would help if you research the project you want to invest in. Don't just rely on heresy or some proof of huge profits or earnings—conduct thorough research before putting your hard-earned money. Ask reliable and trusted people about the project and search more about the details of the company or the project you'd like to invest in.

By 2021 fraudulent crypto type of investment has risen to sixty times higher than in 2018. Crypto is the riskier investment, mai; mainly used by scammers because once the transaction proceeds, it is not reversible.

Always remember that a too good to be property investment is likely, not true. If someone promises you huge returns on your investment, be doubtful it is most likely a scam. Gaining good profits in any investment takes time. There's no quick rich in investment.

Do Not Invest Money You Can't Afford To Lose

Investment sometimes wins and sometimes does not, so you should not use the money for investing you can't afford to lose. Don't invest money for bills; budget for necessities or payables. Some say this is mythical advice, but for some newbies in investing, this is an essential factor that needs to be shared.

There's no quick profit in investment, so you should not use money already intended to pay your bills, etc. To avoid investing money you can't afford to lose, you can try building up your savings first.

Once you already have savings, you can maximize your investment risk by creating a financial portfolio.

Never Put All Your Eggs In One Basket

Old gangsta in investing already knows these phrases. Still, for newbies entering the world of investment, this is a warning—not to put all your resources on a single project or investment to avoid losing everything.

For example, you want to invest in Bitcoin alone. What if Bitcoin Giants sold their old Bitcoin? Then the demand for Bitcoin decreases, and its price will drop drastically, leaving you with regrets.

It is essential to diversify your portfolio in case one of your investment fails. You will not lose all your money on it. You must not put all your eggs in one basket for your safety. Continuously diversify, look for an excellent project to invest in, and do your research before doing so.

Conclusion

Those are the three basic rules of investing; as you grow in the investment world, you must know many financing rules to be a successful investor. To master something, you must learn more about it; the same goes for investing.

The basic rules will help you kick start your investing journey with those helpful insights you can apply.