People get in trouble when they don’t understand something. Not understanding something makes us:
- Buy the wrong thing
- Invest poorly
- Pay unnecessary fees
- Get scammed
There are countless people that got a “stock tip” about a company in an industry they know nothing about and bet the house on it only to find out it was not really a slam dunk. They did not understand what they were investing in.
At WECU we see members that are told by a scammer that they’ve won a lottery, and they don’t really know anything about the lottery. A little research to understand the “lottery” would uncover it’s a scam. Now, it’s impossible to be an expert on everything in finance, so don’t make that the goal. But, you can understand the basics and develop a gut instinct on what’s realistic and what is not. This is important and is a skill that is within everyone’s reach. It’s just about effort and curiosity.
At some point things can get really complex and that’s why professionals exist. Though, since you may not have full understanding, it becomes important to work with an expert you trust. To find someone you trust, can you ask anyone you do trust for a recommendation? Can you do some research on the individual or company? Can you sit with the expert, ask them some questions with minimal pressure? Those are all signals you can trust them. Be careful about jumping into things you don’t understand. In the financial world, it can bite you.