The only impossible journey is the one you never begin.
—Tony Robbins, American author, entrepreneur, philanthropist, and life coach
You work hard for your money. Having your money work hard for you through investments is an appealing way to build wealth. However, as an investor, you face many obstacles. Some are self-inflicted. Others result from unscrupulous individuals trying to take your hard-earned money. The investment industry has many landmines that you should avoid. There are two important things you must do to be a savvy investor: make good investment decisions and avoid making costly mistakes. Most investment books focus on making good investment choices. But one bad mistake can ruin the results of many good investments. This book is unique in that it focuses on avoiding those detrimental missteps.
Your journey begins with obtaining a proper financial education. However, you should be aware that this education can be flawed or misleading if obtained in the wrong places. The Savvy Investor’s Guide to Avoiding Pitfalls, Frauds, and Scams can help you increase your investing knowledge and result in handsome payoffs.
Using a novel question and answer format, this book begins by identifying many of the biggest pitfalls facing investors. These roadblocks can cost you a bundle. Although common sense should separate savvy investors from uninformed investors, common sense is not as common as you might think. You have two major paths to avoiding these pitfalls – a smart path and a dumb path. With the smart path, you learn from other’s mistakes in order to sidestep these pitfalls in the future. With the dumb path, you make your own mistakes and become a student of hard knocks. Although you could use your losses and mistakes to learn how to dodge them next time, you could also learn the wrong lessons. Thus, why make errors in the first place if you can avoid doing so? Given that the dumb path can be expensive and painful, learning vicariously from the mistakes of others is clearly a better route to take when possible.
Nonetheless, some investors repeatedly succumb to the same pitfalls because they haven’t learned the right lessons from their previous losses and errors. They continue to operate using unsound principles that separate them from achieving financial security and greater wealth. As the late American humorist Sam Levenson once noted, “You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.” Fortunately, circumventing most of these pitfalls starts with awareness, followed by taking deliberate actions to evade financial landmines. If you’re unaware of investor pitfalls, your probably can’t do anything about them. Savvy investors exhibit patience, discipline, and the ability to remain calm and levelheaded when others are freaking out. They keep their emotions in check and follow sound investment plans and strategies.
The Savvy Investor’s Guide to Avoiding Pitfalls, Frauds, and Scams guides you along the following path. Chapter 1 exposes common investing pitfalls whereas Chapters 2 and 3 highlight pitfalls specifically related to investing in common stocks and mutual funds, respectively. If you’re looking for someone to blame for the less than stellar performance of your investment portfolio, you may want to look in the mirror. You may be your own worst enemy by having self-inflicted biases. Your investment decisions aren’t always rational, despite thinking that you’re acting logically. Chapter 4 examines some psychological biases that investors frequently make. Another insidious trap is falling for investment frauds and scams, which is the focus of Chapters 5 and 6. Regrettably, an endless array of dishonest people wants to profit from your gullibility. You lose so they can gain. Savvy investors, however, learn to avoid harmful pitfalls and to steer clear of damaging frauds and scams. The bottom line is that a lack of knowledge and failure to take preventative measures about these matters can have devastating results.
This book provides useful insights about widespread investing pitfalls and cons that can put you well on your way to becoming a savvy investor. Achieving financial security and building wealth is more than simply a destination, it is also a journey to be enjoyed when you avoid the rocky path of losses and learn how to experience a smoother ride to gains. Making money is much more pleasant than losing it. By becoming a savvy investor, you can avoid making major mistakes, thus earning better returns, and ultimately enhancing the quality of your life. As the ancient Chinese philosopher Lao Tzu once wrote, “A journey of a thousand miles begins with a single step.” Let the journey begin.