“Nobody can take care of your money like you can. Ultimately, it’s your responsibility.”
– Andrew Stotz
6 Ways You Will Lose Your Money
1. Invested in a start-up company
Everybody knows the odds of a startup company making it to success. True success is tiny. Yet everybody feels excited about the opportunity of investing in a startup.
2. Failed to monitor their investment
People abdicate their responsibility for their own investments and instead they hope and they expect that the people who are supposed to be taking care of their money are doing so correctly.
3. Misplaced trust
Business and investing are built completely on trust. People tend to misplace trust into individuals or into structures into investments that in fact they probably should have checked in more detail about and they’ve probably not should have not trusted them.
4. Driven by emotion or flawed thinking
If you’re driven by emotion the number one the number one situation in this is overconfidence.
5. Failed to properly assess and manage risk
People may make a reasonable investment in a company that they say, “The risk hasn’t been high but I’m ok with that.” The position size that they put into that investment is huge relative to their overall portfolio. If that investment goes down, it could cause huge damage to the overall portfolio. We want to look into the risk assessment of the particular project but also the risk assessment of our overall portfolio.
6. Failed to do their own research
Most people go into investments with a very little amount of actual research into the idea. You have to do your own research.
- Andrew Stotz book 9 Valuation Mistakes and How to Avoid Them
- My Worst Investment Ever
- How to Start Building Your Wealth Investing in the Stock Market
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