Making money is a patient art form that many fail to understand when undertaking financial ventures

 

Trading and investment (frequently the same thing) are often made out to be easy ways of making money. If you venture around the Internet for long enough, you’ll probably see lots of advertisements claiming just this. After all, isn’t it just as simple as putting your money into an asset and then just sitting back? Isn’t your money supposed to be doing all of the work?

It clearly isn’t as simple as that, I’m afraid. The vast majority of investors and traders fail to make any profit, which makes that sad fact quite accurate. So what are the main reasons why people fail? Many will be content with blaming greed. Getting greedy is a frequent cause of failure in gambling, for instance. Isn’t that basically what this business is? Gambling?

Greed certainly plays into it, but it can play second fiddle to much quieter but no less damaging problems.

Tricking the vulnerable

A lot of it boils down to the simple fact that many stockbrokers don’t intend for their clients to succeed. Whether their client gets profit or not, the stockbroker is going to be earning money from them. Of course, this isn’t to sully the name of all stock brokers; there are some great ones out there. But some simply look for any client they can get. People in financially vulnerable positions may therefore be easily taken advantage of.

Fear of new territories

People like to invest close to home. Many of us have a chauvinistic need to make sure our money doesn’t leave the country. But this can prevent us from making very smart decisions. You could begin by looking into other regions within your home country. You could also consider areas that speak your native language, or share the same continent. You could even search for promising opportunities in completely new lands. South Africa trading is vast, so you could give that some thought.

Undercapitalization

One of the more annoying truths about this sort of business is that you need to spend money to make money. Which means you have to have a fair amount of money in the first place. The problem is that a lot of people don’t understand just how much. A lot of money managers will allow people to open trading accounts for as little as a few dollars or pounds. But this is rarely enough. Different trading methods will require different amounts. But you should generally be starting off with at least hundreds, if not thousands, just for small-scale trading.

Jumping ship early

Most investors are impatient. A lot of them are overly cautious. They want to make money, but they can’t stand risk, nor can they stand bad news. The fact is that investing is a very unsteady ship indeed. There is not one hugely successful investor who didn’t have to suffer years of bad outcomes. It’s unlikely you’re going to see big wins in your first few years. This waiting period causes most investors to bail, leaving them with a loss. But, in their mind, it would only have gotten worse. Learning to stay the course then, is something you really need to master early on in this game to make your venture a success story.

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