By Chinkee Tan
In my years of counseling and coaching, one thing that really pains me is when people make poor or bad financial decisions and lose all their money and savings. So in this column, allow me to name some of them.
INVESTING WITHOUT PROPER INFORMATION
There is a tendency that people will make WRONG INVESTMENTS and FAULTY BUSINESS INVESTMENTS.
People might have a firm belief that investing in a condominium is really promising. I have no doubt that a unit can be beneficial in several ways. But if the condominium is not generating an added income while the person who made the purchase is living in it, then it might not contribute to your present needs.
Have you ever heard of the phrase, “Wrong input, wrong output?” Once you make investment based on a wrong premise, this now will lead into FALSE ASSUMPTIONS.
Financial ignorance can sometimes compel us to make false assumptions. Businessman and book author Robert Kiyosaki, who is also the founder of the Rich Dad Co., believes that one of the biggest scams you and I are made to believe is that the house we live in is an asset.
In his series titled “Rich Dad Scams,” Kiyosaki explains that real estate agents tend to make you believe that your house is truly an asset. But an asset, he added, “is only something that puts money in your pocket.”
If your house, he explains, is taking money out of your pocket it is simply a LIABILITY. Here you are thinking, “Yes, I finally have a house I can call my own. What a real investment!” That’s a FALSE ASSUMPTION.
Don’t give yourself a pat on the back just yet. Remember, an investment is supposed to give you profit or material result.
Investment is something that is purchase with an intent to profit or have an immediate return. The question need to be answered is not about the potential but is it making income as of the present. If it is not giving you any immediate returns, we cannot classify under income.
Even if you buy the most expensive jewelry, painting, house and lot, or condominium unit if you do not sell it and profit from it, it cannot be considered as an income. Instead, you should have put your money where there is a potential for immediate returns.
Since you have already used up all of your financial resources, if there is an opportunity that comes along your way, you will now experience MISSED OPPORTUNITIES.
You will miss out on several opportunities because of financial ignorance. Instead of using your money to be productive, it robs you of your ability to invest on something that is better and bigger.
As I always say, “CASH IS KING!”
In this time and age, having cash on hand is one of the wisest thing you can do. So if there is an opportunity that comes along your way, with the right information and knowledge, you will be able to make good and better financial decision and choices.
THINK. REFLECT. APPLY.
Have you ever made some bad financial decision from the past? What can you learn from it?
How can you avoid it in the future?
To learn more how to handle your finances, please follow me at my youtube/chinkpositive and fb/chinkeetan.
