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How To Invest
Wealth inspiration part 10
Wisdom can often come in small packages, and wisdom about building wealth is no different.
Today’s quote is from Tony Hsieh, the late entrepreneur and CEO of Zappos:
“Don’t play games that you don’t understand, even if you see lots of other people making money from them.”
To me, this is the fundamental rule of investing. It is similar to Buffet’s famous rule about never losing money.
If you invest in things that you don’t understand, then you are taking a lot of risks and could very well end up losing your money.
Investors first learn about what they want to invest in by studying, reading, talking to others with experience, then practicing with either paper dollars or small sums of money before going all in.
Throwing your money into Bitcoin or Tesla because you heard your neighbor say they made a bunch of money that way is a recipe for disaster.
If you don’t understand options, you will likely lose money trying to trade them.
If you don’t know anything about investing, consider making regular purchases of a low-cost index fund like the VFIAX from Vanguard that tracks the S&P 500.
