Are You Afraid To Invest Because Of The Risks?

January 9

First of all, I am thankful for read.cash and noise.cash for the opportunities to earn bitcoin cash and learn about cryptocurrency. In 2021, in the midst of the covid-19 pandemic, my earnings in both platforms have helped me a lot financially. Also, I have learned a lot about various cryptocurrencies and other opportunities. Thus, I would like to express my gratitude to Mr. Demesel for financing these platforms and the development team and admin, particularly to the leader of the team, "Simon" (Sorry I don't know your last name yet)

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Writing and creating content though is a form of active income. For the past few months, I have been looking for ways to earn passive income both through cryptocurrency and fiat money. That can only be done by investing my money in various ways. However, investing money involves risks!

Hello, my fellow Bitcoin Cash lovers? How did the first 9 days of 2022 go so far? I hope they were great for you. In my case, I made it a point to learn how to invest part of my earned BCH in various ways.

I know many of you here have already invested in smartBCH and earn through various ways. Some however expressed the fear of investing. That fear is quite normal since all investment schemes come with different levels of risks!

In this post, I will share with you some points on how to deal with your fear of investments. I will not discuss anything about investment schemes here. Rather, I will share some ideas on how to face your fear when it comes to investing your money.

Are You Afraid To Invest Because Of The Risks?

If your answer to this question is yes, then you are not alone. Investing your money involves risks. But do you know that NOT investing your money also is risky? Why?

Do You Know Money Loses its Value Over Time?

I'm talking about fiat money. I am talking about the "buying power" of fiat money, to be exact. You have noticed that your $100 can buy more items  5 years ago? That's because of inflation.

Keeping All Your Money in the Bank Does not Help.

Unfortunately, in almost every country, if not all, the inflation rate is higher than the interest rate that any bank offers. I'm not saying you shouldn't keep your money in the bank. You can keep up to a certain amount for emergencies. Let's say, what you have in your bank is your emergency funds. Some financial gurus suggest that your emergency fund is equivalent to at least 6 months of your monthly expenses.

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Things You Should Know Before You Invest

1. High Return Investments Means Higher Risks. This is the nature of investments. Investment schemes that offer higher returns mean higher risks. Meaning you may earn more than 20% in a year or just a few months. But you might also lose your investment at the same rate or higher. Low-risk investments like bonds also offer low returns.

2. Beware of investment scams. The cardinal rule is, if an investment scheme offers a high return with no risks involved, that's a scam. Last year, a number of "double-your-money" schemes popped in our city. I don't even think Ellon Musk could guarantee a hundred percent return in a month or two if you invest your money in Tesla.

3. Invest only the amount you are willing to lose. I believe this is the most common suggestion of a good financial adviser. Keep in mind you may lose your money in an investment.

4. Never Borrow Money For Your Investment. Some investment schemes like the Variable Universal Life may offer a possible return of 8%-12% return annually. This sounds attractive. However, no legal investment schemes can guarantee the rate of return of any investment. Even the Foreign Exchange or ForEx which is on top of the investment pyramid, meaning ForEx can possible give you the highest return for your investment, can not give you a guaranteed rate or return.

5. Be aware of the volatility. This is quite common in Cryptocurrency. Prices can go up or down anytime. This is the same thing in the stock market.

How to Handle Your Fear in Investing

1. Invest in Knowledge First. Sometimes, the fear is because of the lack of knowledge. It's like, you are afraid of the water because you don't know how to swim. Highly logical. To counter that, learn. Do your own research (DYOR). Or talk to someone who is already doing or has done something. Get a mentor. Read, listen, watch, and learn!

2. Know Your Risk Tolerance. How much of a risk taker are you? As I have mentioned earlier, investing involves different levels of risks. Is your risk tolerance low? Meaning, you hate the idea of losing money. Or are you a high-risk-taker? Like, you would jump off a plane and start wearing your parachute along the way type of risk. Or something in the middle?

3. Know how much are you willing to lose. I guess this goes along with number two

4. Don't put all your eggs in one basket. After knowing how much you are willing to risk, don't put them all in one investment vehicle. Diversify. Meaning learn different ways. If you are into cryptocurrency. Don't put everything in one type of coin.

5. Start small. If you are terrified of investing but want to invest anyway, start small. Again start with an amount you are willing to lose.

6. Don't be afraid to make some mistakes. Mistakes are part of the learning process. Even those who is doing this for quite some time still make mistakes.

 Personal Sharing.

 I have long wanted to start investing in smartBCH. Since I knew very little about it, I started to read about it everyday. While learning, I decided to use part of my earning from noise.cash for my investment. That's the amount I am willing to lose. But to get my feet wet, I first sent $3.00 worth of BCH to my Metamask wallet. I will use that amount to learn it right. I might lose it all. But that's only a day or two of earning from noise.cash.

In Closing.

I believe the best way to handle your fear of investment is to gain knowledge. Learn from those who have done it already, and do your own research, It doesn't matter if you want to invest in fiat or cryptocurrency. Your best weapon is your knowledge. Then invest at your own risk.

Thanks For Reading.

Disclaimer,

The content of this article is based on what I learned from various personal finance books that I have read in the past and from the seminars and training I have attended related to this subject.

Check out my other content at:

•  Read.Cash

•  Publish0x.com

• Steemit.com

• ForumCoin.Com *

•  Noise.cash

•  Twitter