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Three ways to lose money

It becomes more difficult to save and increase money every year. People often fall victim of widespread financial mistakes that can cost thousands of dollars.
Three ways to lose money

Knowing the three most common financial mistakes is easy to avoid losses.

Avoid Risk

Over the past 6 years, the monetary policy has become increasingly unconventional: central banks have used instruments such as zero interest rates, quantitative easing, credit easing, forward-looking recommendations and unlimited interventions in the foreign exchange market. Now we are faced with the most unusual tool of all, negative nominal interest rates.

Such rates now dominate in the euro-zone, Switzerland, Denmark and Sweden. Besides, not only short-term refinancing rates became nominally negative. The asset interest rates of around $3 trillion in Europe and Japan with maturities of up to 10 years, as in case with Swiss government bonds, are now negative.

An investor is in risk of losing his fortune in several decades by putting money in reliable tools only. 

Ignore Small Print

Another common mistake is financial decisions based on emotions not on a sober calculation. It is, of course, necessary to listen to the feelings and recommendations of friends and neighbors, but they should not become the only basis for action.

Is it important to read all contracts and check the reputation of companies? Where do you intend to invest?

Unnecessary Things

You can often hear people's opinions on how you should live. If you are a company executive, you simply have to spend a lot of money on your appearance and drive an expensive car. It may often be seen in large companies. People try to emphasize their status with expensive things. They can spend the last money on a fancy bag or sneakers.

The owners of premium brands of clothing, accessories, etc. target such an audience. You should get rid of stereotypes in order to save your money. You should not care about strangers’ opinions and moreover, you should not compensate for your insecurity with unnecessarily expensive things. Always remember the gold “price-quality” standard. You can save a lot more this way.

Source: https://www.moneyweb.co.za/moneyweb-opinion/soapbox/three-common-ways-we-destroy-our-wealth/

Photos are from open sources.

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