The highest risk in investing is to do it without knowledge and preparation. You cannot invest blindly. You must learn how to determine risks and weigh them carefully. You do not have to be an expert and you do not have to read a thousand books on the subject. However the more you read and the more you learn the better you will do.
Beware of the traps. People will try to entice you with all kinds of gimmicks and schemes to make money fast or make a killing in the markets. No one beats the markets all the time and few beat it consistently. Get rich quick schemes are always too good to be true. Do your homework, rebalance your investments at least twice a year to make sure you have the right mix and be suspicious of anything that sounds too good to be true.
I again recommend Daniel Solin’s books – they are great primers on investing and will work for almost anyone who has a modest amount to invest. (The Smartest Investment Book You’ll Ever Read by Daniel R. Solin) Read this book first and then look at his other books to expand your knowledge. Look at other books as well but be careful.
Diversify your investments because no single investment is “safe” or foolproof. You have to spread the risk to avoid it most effectively.
One good way to keep up on good sources of information is to subscribe to the Creating True Wealth newsletter at www.books2wealth.com where I present this information on a regular basis. It is free, which is a very good price. Also keep an eye on this blog and other blogs I recommend.
This is the end of this series of posts on the Five Essential Disciplines to Build Wealth. Keep reading and learning how to protect and wisely invest your money.
Daniel R. Murphy
Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.