Do’s and Do-Nots Of Investing

  1. Do use common sense. High rewards mean high risks. If you are told otherwise run away
  2. Do due diligence on the company. If they sound desperate to get you to invest there is a reason. You would be amazed what you can pull up in a few minutes. Be careful with social media it can be manipulated. I am talking more about company formation, office address, time of operations, etc.
  3. Do not invest in start ups. Yes the rewards can be huge but your chances of success are next to nil. Everyone uses examples of Facebook, Google, Amazon etc. But they are 1:100,000. Even on a much smaller level of success your chances of success are about 1:300 IF you do all the initial checks on the company. The odds are hugely stacked against your success.
  4. Do take a long term time horizon. At least a few years. People that want income are not really investing. I have found many of the riskier investments are the shorter term ones.
  5. High rewards means high risks. Generally lower returns mean safer. I have never seen any exception to this.
  6. Do not ever think anything cannot go wrong. It’s changing fast all the time and to think nothing could go wrong is dangerous.
  7. Do spread between high, moderate and low risks. Obviously much less in the higher risk investments. High risks should be treated as money lost and hope for the best. Only invest here what you can afford to lose.
  8. Do think outside of the box. Not all great investments are registered financial packages. As long as you can trust your own due diligence on an offer consider them all.
  9. Do not trust anyone. Most of the alternative investment offers are scams. If you carry out basic due diligence you will see this right away. Easily. Never rely on what you are told go by what you know.
  10. Do consider private equity investments in already established companies that need funds for expansion. It’s one of the very best investments you could ever make. It is not risk free. But it puts the odds of huge success well and truly in your favour. Imagine for example a small mining company in operation, pulling out gold that would now like to sell of 30% of the company for $15 million in order to expand. Not a start up or risky “exploration”. They have proven they are successful (HUGE POINT) and need capital to expand. Perfect (as long as they are legitimate of course)
  11. Do put some effort into it. The rich plan for generions ahead the poor plan for the weekend springs to mind.