We have heard our parents, teachers and even actors in ads that mention the importance of maintaining savings. This is because without savings, we fall into a debt trap which is very difficult to climb out of.
Below are some instances how people take high risks with their savings and how it affects their financial stability:
Believing blindly on people’s advice:
In a country like India, we have seen people give free advice and others listen blindly. This is wrong as without any research and validation you must not invest in any high risk products. Word of mouth is only good to a certain extent. If you blindly take advice, you are bound to lose a lot of money.
Taking high risks will yield more money:
We believe that taking high risks will only bring high money back to you. While this statement is true to a certain extent, there is a lot of research that needs to be done. You can also check mutual funds and how investing in them can also bring in lot of money.
Wanting to earn BIG money in SMALL time:
People want to earn lot of money in very little time. Hence they are willing to invest in high risk products that have the possibility of earning higher income. What people don’t realize is that you can earn a lot of money BUT also lose all of your money. Hence mutual funds and stocks can earn you better yield when you stay for few years.
What you must do?
The best thing you can do is to save money first. If you don’t have enough money in savings then trying any high risk investment is not a good idea for your family’s future.
Secure your family first by saving enough money. Once that’s done, you can begin researching and investing to earn more money.
You can also read – 7 Factors That Affect Your CIBIL Score