Sometimes, you are better off not doing some things. Here are 66 such things that you shouldn’t be doing:
- Don’t spend to show off. (why)
- Don’t forget about inflation.
- Don’t save less than 10% of your annual income.
- Don’t keep money in stock market that you’ll need in next 5 years. (why)
- Don’t ignore the importance of keeping cash. Both as a part of your emergency fund (why) and as a market crash fund (why).
- Don’t put off saving now in the hopes of saving later. (why)
- Don’t try to save everything and sacrifice your present.
- Don’t think that spending money beyond a point can make you happier.
- Don’t keep an emergency fund of less than 6 months worth of expenses.
- Don’t invest 100% in stocks or 100% in bonds or 100% in bank deposits.
- Don’t think PPF, EPF, NSC or SSY are dull and for losers.
- Don’t ignore the importance of reading. Your end-of-life corpus can be reduced by lacs if not crores.
- Don’t think that just by reading great investment books, you can beat the sh** out of the market.
- Don’t have ‘being-the-richest-man-in-graveyard’ as the aim of your life.
- Don’t watch business channels too much.
- Don’t envy your friends / colleagues’ portfolio returns. (why)
- Don’t think that insurance and investments are same things.
- Don’t buy endowment or moneyback insurance plans.
- Don’t be under-insured. Being over-insured is pardonable. (why)
- Don’t die without an insurance (if you have dependents).
- Don’t die without adequate insurance (if you have dependents).
- Don’t die without a will.
- Don’t buy based solely on past performance and expect future performance to be a repeat of past.
- Don’t think risk is just about short-term volatility. For most, its about earning low returns (why).
- Don’t think that a long-term goal will remain a long-term goal forever. They become short-term goals as deadlines near.
- Don’t expect stocks/equity MFs to give more than 12% average returns, even in the long run.
- Don’t believe those who make promises of more than 20% returns in markets.
- Don’t believe anyone who gives you any guarantee in stock markets.
- Don’t ignore the importance of index funds. Their day will come (in future).
- Don’t underestimate the power of automating your savings and investments.
- Don’t underestimate the power of compounding. (why)
- Don’t give up on stocks if you lose money at first. (why – here is another why)
- Don’t think that successful investing is easy. If it was, everybody would be rich. (why)
- Don’t assume you are smarter than the market.
- Don’t invest in anything you don’t understand.
- Don’t forget god in good times and equities in bad times. (why)
- Don’t think that simply following Peter Lynch’s advice to “Buy what you know” will work. Better to research what you know and then consider buying it.
- Don’t think that all your stock picks will give positive returns. Even a 40% success rate can make you a great investor.
- Don’t think that it will be as easy to implement, as it is easy to say “I’ll be greedy when others are fearful”.
- Don’t expect stocks to behave like bonds and give fixed returns. (why)
- Don’t assume that 2008-09 like crash can never happen again.
- Don’t assume that 2008-09 like crash will regularly happen in future.
- Don’t think that the next recession will be like the last one.
- Don’t be afraid of falling stock prices or bear markets. (why)
- Don’t invest in IPOs. (why)
- Don’t forget that a high potential return means high risk.
- Don’t think that those who use a lot of maths (or excel) are great investors. If they were, mathematicians would be the richest people in the world.
- Don’t think that traders are idiots (if you are an investor).
- Don’t think that investors are idiots (if you are a trader).
- Don’t think you know every method of making money in stock markets. There are ways to make money you don’t even know off.
- Don’t believe everything that experts have to tell you. Especially in stock markets. (why)
- Don’t trust you agent or broker or advisor
or wifeblindly (or maybe you should trust your wife).
- Don’t be surprised if every solution offered by an insurance salesman involves insurance. (why)
- Don’t be surprised if every solution offered by an MF agent involves MF.
- Don’t think that complexity is necessarily profitable or a sign of expertise.
- Don’t think that the best sounding advice is actually the best one in the long run. (why)
- Don’t think that a person without a formal (expert) background in finance cannot be a good investor. “Expertise is great, but it has a bad side effect: It tends to create the inability to accept new ideas.”
- Don’t invest only to save taxes. (why)
- Don’t think about saving taxes in the month of March. (why)
- Don’t take a large housing loan just for the sake of tax deduction. (why)
- Don’t think about buying investments without first settling on your financial goals.
- Don’t think that the loans (which can give sleepless nights) will vanish automatically. You will need to plan and work towards making them vanish.
- Don’t think that one day, you will automatically get out of the living-paycheck-to-paycheck mode. You will need sacrifice a few things to make it happen. (why)
- Don’t think that credit card is a source of funding. Its a mode of payment.
- Don’t carry a credit card balance.
- Don’t be stupid enough to not read Stable Investor’s newletter. 😉
Post inspiration – this.
Well experienced good advice. I love your each and every post.
Thanks Jatin 🙂
Hi, very informative article.
I am 28 years old and I am searching for good investment options. I just came to know about peer to peer lending as an emerging platform in India and wanted your views on that.
I have not delved deep into P2P lending platforms so I can’t say much.
But by structure, P2P lending can be quite risky. So unless the platform takes care of the default risk, etc. it is something to be cautious about.