1. Don’t lose all your money
The biggest risk in investing is not making too little profit, but losing everything that you invested. Don’t go after risky invest that may bring you huge profit, but may also result in lost of all your funds. Remember that even if after some time you are able to get back the money you originally invested without any profit, it’s still a good deal.
2. Invest only in something you know well
The easiest way to lose money is to start investing in something you don’t know. A lot of successful investors after making huge profit feel that they are now experts in everything and start investing in industries they don’t know well and have never invested before. This usually does not turn out well. Stick with what you know.
For example, if you have invested your whole life in real estate, don’t dare start investing in tech companies, as you probably know nothing about it, and people who are asking for your money will just fool you.
3. No NDAs
There are no unique ideas. If someone thinks they have something unique, they are overvaluing themselves. People who ask you to sign an NDA (non disclosure agreement), just for telling their business plan are either stupid or paranoid, and you should not work with either of them.
4. Invest in people not ideas
When investing make sure that the people behind the company are truly the ones who can execute the plan in the best possible way. Interview them, like you would interview a person who you are about to hire to work for you. Most businesses fall not because of the bad plan, but because of bad execution.
5. Don’t invest in overpriced projects
There are too many start-ups that have no product, no clients, no money but are already asking for a million dollar evaluation. People like that will most likely never make you profit, their whole business idea is to live by getting new investments.
6. Don’t invest outside of your comfort zone
This can mean a lot of things, depending on your comfort zone, but usually, it means not to invest in businesses that are established in countries you don’t know well or trust.
7. Forget about ethics
You are here to make money. If you want to invest in the company because it’s ethical and not profitable, that’s not business. That’s charity. There’s nothing wrong in charity, just don’t expect it to make any money for you.
It’s much wiser to invest into the non-ethical business, make a lot of money and then use that money to do good than invest into bad, but ethical company, that will make no impact on the world and will also lose your money.