6 Reasons why even Proven Investments Fail!

Mr. Abhishek Kumar, a resident of Nainital, was not happy these days. The reason for his displeasure was that despite investing in the best of the investment plans of the best company, the ROIs could not meet his expectations. When his Investment Plans’ ROI backfired, so did his plan to meet many financial goals in life.

He discussed the same with one of his friends who had also invested in many plans and received good dividends who gave him an idea what may have gone wrong! If you are one of an investor such as Abhishek whose investments did not see a good return, let’s provide you 6 reasons as discussed between him and his friend.

Reasons #1 – You did not know your motive

Your investment may not have worked because you did not know why you needed to invest? Did you invest just because your relatives were doing? The motive behind investments differs from person to person, and this is crucial to know. Once your motives of investments are clear, and you put your money in a good vehicle, you can get good ROI.

Reason #2 – You have no idea about your risk appetite

Before investing, it is religious to know your risk-taking ability. If you invest in a venture that your finances can’t handle, you won’t get the expected results. You should select a safe option such as Fixed Deposit if you want to gain profits without hindrances.

Reason #3 – You may not have an idea about your spending ability

As you must know a popular saying – You must not save what is left after spending, but always spend what is left after saving. As a result, you should have the complete know-how of your expenditure and income. It helps you know how much investment capacity you have or you can handle. If your income is allowing you to make frequent investment options, you could go for a one-time investment option such as an FD to help you out!

Reason #4 – You may not have selected a good investment venture

Many people go by the advertisements and apply for investment, not by their needs or goals, but what the market is trending. Hence, they end up enrolling for wrong investment tools and suffer. In the same context, opting for mutual funds may be a good idea for a long-term investor but not good for a short-term as its ROI is impacted by the market. Hence, such investors should go for risk-free investment option such as a fixed deposit as its ROI is fixed and unaffected by fluctuations of the market.

Reason #5 – You may not have patience

Excitement is a good thing, but that does not mean overruling the facts! Yes, you may have invested to reap the rewards and set goals accordingly and when that does not happen, you panic! This happens because you don’t have the patience to give an investment plan the time that it deserves to offer you its deserving profits. Thus, the key is to wait, not panic and have patience and see your investment grow over the years.

Reason #6 – You may not be giving reinvestment a chance

Once you have decided to invest, you need to know the power of compounding as well. Once you invest, you get some ROI on it. And if you reinvest the amount, you earn interest on previous interest figure as well as the principal. Hence, compound interest assists you convert a small invested money into a large one over a tenor.

The Bottom Line

Now that you know the mistakes that may not be helping you reap the expected profits try to avoid them by doing proper planning. If you don’t want to take risks, lock your money in a Fixed Deposit Scheme of an NBFC and earn huge! Even you can calculate your maturity amount online with the help of FD Calculator.

All the best!