Tips for Smart Investing

FTX was a cryptocurrency exchange that, at its peak, was worth $32 billion dollars. It boasted a bevy of celebrity endorsements, such as Tom Brady, Larry David, and Steph Curry. It was described as one of the biggest cryptocurrency exchanges in the world. Just a short time later, however, the exchange filed for bankruptcy and multiple executives were tried for fraud. Sam Bankman-Fried, the cryptocurrency exchange founder, was recently found guilty of fraud and conspiracy. The collapse and subsequent fall-out came as a shock to many, not least of which, those who had invested their money into it.

FTX is just the latest financial scandal in a long history of financial scandals- Theranos, the Madoff investment scandal, Enron…Financial fraud has certainly not gone out of style and probably never will. This means that we have to arm ourselves with knowledge and make informed decisions with our money so we have a better chance of avoiding scams. We don’t want the next get rich scheme to put us in the poor house.

Sure, it sounds good, but is it good for your future? It’s important to take time and do your research before investing in anything. Don’t just rely on the enthusiasm of the person encouraging you to invest and don’t get hung up on flashy videos or pictures that entice you with images of all the things you could afford if the investment goes well. Anyone can slap together a presentation- look deeper. Look at the company or person behind the investment. If it is a company, research the company’s financials. If there is any hesitation to provide information or if the person who is encouraging you to invest balks at your desire to know more, that’s a huge red flag. Don’t invest in anything you don’t understand.

Sometimes Things Are Too Good to Be True:

It would be lovely if everything was just as it seemed, but many times, that isn’t the case.
Be wary of any investment that promises high returns with little or no risk. Are they giving you guarantees that you’re going to be mega-rich? Are they making promises that seem too good to be true? Unfortunately, it probably is. There is no sure thing when it comes to investing and anyone who promises otherwise is probably lying.

Keep Private Information Private:

Be careful with giving out important information- like your personal information or bank account numbers. Once you start giving out your personal information, scam artists can wreak havoc in your financial and personal life.

Don’t Bet Your Bottom Dollar:

It may seem like a great investment, but don’t sink all of your money in it. There is no guaranteed return with investing and even if the company or person behind the investment is on the up and up, you still might not end up coming out ahead or if you do, the payoff might not be immediate. If this is money you need for your living expenses, for food, for tuition, or for any other necessary expense, you shouldn’t invest it. Invest only what you can afford to lose. That way, if things don’t go your way, you won’t be in a dire situation.

In addition, you should diversify your investment portfolio. Again, it might seem like a great investment, but why don’t you try spreading your money across multiple investment options? This way, if one tanks, you might still break even or come out ahead on the other ones.

There are no guarantees in the world of investing and sometimes the glitter of potential gold can blind us to reality- believe me, I’ve sunk money into projects that very quickly came to naught. But by taking our time before committing our money, doing thorough research on the investment, and making sure we only invest what we can afford to lose, we can lessen the chance that any investment misstep leaves us high and dry.

This article contains some tips to help with your investment journey, but this is, by no means, an exhaustive list. These are just suggestions- I am not your financial guru and cannot direct you on how to spend or invest your money or make guarantees on what will happen to your money or investments.