Investment Fundamentals

Change is the only constant in life, right? We all grow, and everyone wants to improve their circumstances for themselves and their families. Money's a big part of that, so getting educated about finances is super crucial. These days, it feels like everyone is rushing to make a quick buck. It’s not just about greed; the struggling economy and pressure from friends have definitely pushed people to act fast. Many jump into the "investment" game without really knowing the basics, and that can lead to some serious regret. I’m no financial guru, but I want to share my basic insights on investing, especially if you’re looking into crypto, real estate, or just about any investment. Here are some key things to keep in mind: 1. Know the Business You’re Getting Into Whether it’s coins, forex, real estate, or whatever, make sure you do your homework. Get a solid understanding of what you’re diving into. I’ve seen it happen firsthand. Someone bought a Keke (tricycle) and rented it out, thinking he’d make some nice returns every week or month. But then it was just one headache after another. Crankshaft issues, local government troubles... it got messy and even led to an arrest, all because someone wanted to profit off someone else’s hard work. I’m not saying the Keke business is a bad idea, but you really need to know how it operates to avoid stress.

The basics of any investment starts with financial education. One must be financially literate to embark on any business venture. This is the minimum entry requirement even before we begin to talk about the other key principles that have already been mentioned, like risk awareness, diversification, patience, strategic withdrawal, and others. On the other end of being financially literate is patience. Patience will keep you in the game for the long term and guard you against falling for scams because you want to get an ROI of 120% in a short time. My top recommended book on investment is this: The Intelligent Investor by Benjamin Graham

Thx will have a look,  with Zero to one from Peter Thiel, well I found it a little boring.

Right, You made best thread about Investment and I didn't see that kind of thread in Which OP explained each and everything about that . Knowledge about business matters a lot because there are people who are doing business and they know which kind of things should be for the successful business. There are thousands of people who are doing business but they blindly follow other people. You should read all scenarios about the business in which you are investing. If you will invest more money then you will get reward on your investment and skills which you developed in couple of years .Always do small investment if you have little knowledge because it will give you knowledge.

I think these are the two most important points and all the rest are rather irrelevant. Starting with point two, many people see in the media and movies that people put one sum of money into an investment and get super rich from it - but that is extremely rare and not how most people find success. Success for the average person is a long road that requires commitment and understanding that they should keep adding funds through good times or bad. It takes most people decades of investing before they will be able to enjoy the fruits of their labor, but when it comes it is abundant enough to retire on. As for point one, 99% of people would do much better just investing in diversified ETF funds rather than trying to pick individual companies because unless you have the time to research them you will be wasting money.

I don’t think you can lose it all if you play your cards right. Show me one person who bought a broad US index fund and lost all of his money. That’s impossible as those funds never went to zero and since their inception they rewarded their investors handsomely. Here is a rule which you can trust if don’t know anything about investing. Rule 1- Buy VOO and chill. You don’t trust crypto? You don’t know how to pick stocks? You don’t want to hire a fund manager? You want consistent long term returns? The answer is clear: Buy VOO and chill. It is so easy, even a monkey can do it and get rich before seeing his 50’s.

Diversifying Income Sources This is one of the most important principles of successful investing. It means not having a single, fixed source of income. Rather, it is necessary to diversify these sources of income, whether by diversifying investments (i.e., having a diverse investment portfolio that ensures income does not stop or become disrupted), or by having multiple sources of income from the same investment. Example to illustrate: I would prefer to invest in poultry farming to achieve medium-term profits despite the risk, rather than investing in real estate, which offers long-term returns but is less risky. Why? Because raising chickens allows me to sell the chickens themselves less than two months after they hatch. I can also establish a flock to produce eggs that generate daily returns. I can also sell chicks to those who want to raise poultry. Here, we have approximately three or four different sources of income from the same investment.

I like this part because most investors only think about the positive aspects of their investment without thinking about if thing happens the other way round. As an investor, there is need to calculate your the risks involved in your investment and bear in mind that there will surely come bad times when it look as if you have made the wrong investment decision but those challenges are what makes an investor become stronger to still continue without feeling the impact of how the market turned out. Having the feeling that you can lose all your investment will give you the idea to not invest all your money but with just what you can afford to let go without feeling bad about it.

This is very correct in investment as I have seen it happen. There was a time in my country when people lost all their money due to the bankruptcy of some banks, as a result of this, both share holders and depository lost their money. Due to these incidences, a lot of new policies have been introduced such as minimum capitalisation needed before operating a bank. I did not see where the post mention insurance which is one of the things that prevent an investor from losing it all. It's just unfortunate that many investors do not take insurance seriously. Insurance save the business and make the investor have rest of mind. It is therefore important for investors to always out insurance policy in place because you never can tell how thongs will go with the business.

Investing is a long journey, reason why most person fail because they don't see it that way. Choosing the right investment also matters according to surroundings and economic state, if your investment is not suitable according to standards, all efforts put into the project will fail causing the investor to lose large portion of his capital. Investors are meant to be strategic, expecting greater achievement will demand plus size application of ideas, doing it the common way will give same results as a mere investment return, best pay off demands extra strategic effort.

That's probably the biggest problem among investors these days, because as you said, they are in a hurry to make money, and due to that, they don't spend enough time understand what they are getting into, and they go ahead only because they've heard people say that they can make good money from this industry or business. We shouldn't look far, and take the example of the crypto market. So many newbies enter the market with very high hopes, because they've heard or seen people talk about how much money people around the world are making from cryptocurrencies, so they decided they are going to do it as well, because it's good and can make them a lot of money. One should ask them, can one become a doctor without studying medical sciences and attain practical experience through various tests and sessions? No, then how come they expect themselves to become traders and successful investors without even learning anything about the industry they are getting into? Yeah, you can say that some people get lucky, and they manage to make good money without any knowledge, but that doesn't mean it should be the case with everyone.

i get it tho because we really can't afford to slow down with how fast our world is going and we would not be able to survive if we slowed down unfortunately there really is no good shortcut to being rich people often do this because they believe this is how they will maximize their profit but it is quite risky to put all your money on one thing it is like in betting, putting all your money into one bet is high risk

Many invest through hype and that's a huge mistake that they do. Instead of knowing what they're investing to, they're only looking at the investors who have good stories of how much they've made with the profits they've got through those investments that they did. There is always risk in investing, low and high. And you're right, be ready with the moves that you'd do with that. Make sure that whichever is the outcome of it, you've been prepared and you'll accept it lightly because that's how investing works.

You can lose it all, a lot of people don't consider this before starting up an investment, it's all risky and it's possible for you to end up losing everything you invested this is why it's advised for people to always invest what they are capable of losing, no matter how legit or sure you think that investment might be there's a possibility that it might go south at the end. Always learn to think smart and have a plan b

Or maybe we can add one more thing, be consistent, specially in the world that we live in. That's why we will hear and see the term DCA in this community, because it's where we can save and be really have the mindset to be a investor as we have the mental discipline to be a long term and looking at the bigger picture. All other advises are good, but we all know that it's going to be very very hard that's why I said consistency is the key. There will be times that we are down and no money to invest. But it doesn't mean that we will stop totally, it's just another set back. Maybe in the next couple of weeks our problem will go away and then we are back to our regular investing strategy - DCA. This game is more of mental so we will have to fight it out and grind every time.

I see great deal of people thinking that investment will give them money and there's no risk, in truth even investing in the safest asset there's always a risk involved. Countless of people losing money when market crashed despite investing in a blue chip stock is enough proof that investment always have risk, the activity of creating money out of money has always been a risky ones. If there's no risk involved everyone would've been warren buffet.

Yeah all of them are correct, this might make people think investment is very risky and could destroy someone else life. But, people have to know if you not invest your money, you will stay poor forever. When you're young and productive, you can make money and pay bills, you think life is simple. Once you're getting older and no longer productive, you will not have enough money to pay bills. There are only two choices: 1. Never invest and stay poor forever. 2. Invest, chances are either you become homeless or rich.

Investment is not an instant money making strategy but a life long or even inter generational process hence we must give it all the times, this way, I agree it is a journey for multiple generations. Another important basic principle of investment must be, 'diversification', this may fall under the risk management category as well. Still, when we cannot speculate about future development, it would be much better to risk on multiple opportunities to ensure at least something will survive when unexpected scenarios rising up. Exit point theory might differ for person to person but in general like for the case of bitcoin, when we are not sure about the upper side potential of bitcoin, I guess we may leave any bitcoin investment for decades may get you the maximum benefits. When you are confident about the fundamentals, you will not have any problem to hold forever.

you made an excellent point in your explanation but i chose 2 out of all. the number one is very important because you need to know the type of business you want to adventure before doing it. i have equally done this type of business and i can boldly tell what the result turns out to be, instead of me to gain i lost. so it is good to DYOR before engaging into any business otherwise it will lead to loses. and secondly no matter how a business look so real or to good to be truth, we should not put all our fund to it because if it turns out to be bad he would find it difficult to bail ourselves out. so its important to invest what you can afford to lose so that when the worst comes we can swap to another business with our reserved fund, instead of planning to start afresh.

Is it just me or did this guy post in the wrong forum? We’re talking crypto here — the same crypto that turned people like CZ and Justin Sun into billionaires in barely a decade. If you wanna see how fast people got rich, just compare Warren Buffett and CZ. Buffett made his $100B over 70 years and got called the Oracle. CZ? Pulled that off in 6. Personally, I stick to my own simple plan: 1️⃣ Just HODL. 2️⃣ Only pick coins the masses actually use. 3️⃣ Grab digital assets as soon as they hit the top 50