Financial security expert Pamela Yellen, author of Bank On Yourself: The Life-Changing Secret to Growing and Protecting Your Financial Future, believes that business owners are prone to making financial mistakes that undermine their efforts to build wealth. Here is the second of the top five mistakes (#2 of 5) she sees and strategies on how to avoid them...
2. Confusing "Saving" with "Investing"
Wall Street and the financial planning industry have led us to believe that saving and investing are the same thing.
They are not!
The money you have in savings is money you don't want (or can't afford) to lose. Money you invest is subject to loss. Most people today invest to save, and as a result, have no idea what their nest egg will be worth when they plan to tap into it.
Don't put money you can't afford to lose into stocks, real estate or other traditional investments.
Before investing, ask yourself if your money didn't grow for 20 or more years, or even went backwards, could you live with that?
2. Confusing "Saving" with "Investing"
Wall Street and the financial planning industry have led us to believe that saving and investing are the same thing.
They are not!
The money you have in savings is money you don't want (or can't afford) to lose. Money you invest is subject to loss. Most people today invest to save, and as a result, have no idea what their nest egg will be worth when they plan to tap into it.
Don't put money you can't afford to lose into stocks, real estate or other traditional investments.
Before investing, ask yourself if your money didn't grow for 20 or more years, or even went backwards, could you live with that?
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