3 types of investors

An investor is someone who puts their money into something with the aim of making a profit or profit from it. When it comes to investing, there are three types of investors:

1. Foolish investors

2. Average investors and

3. Wise investors.

Dumb investors are people who invest all their money in their needs and wants. They look for the latest shoes, they design this and that, even when they have little money. They hardly know what it means to delay gratification. All they know is that they must have what they want and crave NOW, so they just invest in it. Of course, such things do not bring benefits. They mainly buy liabilities rather than assets. It may be best to pause here and define liabilities and assets because many are under the impression that assets are items we spend money to buy, while liabilities are debts or items that are of no use to you. This may not be entirely true.

Assets are simply things we own that make us more money, while liabilities are things that take our money away. For example, if I have a car that I use personally, it’s a liability because it takes money away from me in terms of maintenance to keep it in top shape to serve me optimally. But if I use this same car as an airport taxi, it becomes an asset because it makes more money every day. When foolish investors try to venture into what could possibly be profitable, they do so in things they barely understand. consequently, they end up losing more money

Average investors invest in their necessities and necessities of life. They make sure they have food to eat, send their children to school, pay medical bills, etc. They first buy luxuries when they get a lot of money. They want to please and compete with their neighbors and friends. Imagine someone earning $25,430 for the first time in their professional career after working for 20 years and the first thing they do is buy a new car for about $23,500. What makes this situation even more ridiculous is that the guy already has a pretty nice car, is in debt, lives in a rented apartment, and is not married! Are you in this category?

Wise investors make sure their money works for them. They invest heavily, consistently and with a focus on investments that they clearly understand and generate high returns. When it comes to money matters, sending your money to work for them comes first. The delay in gratification and the purchase of luxuries lasts after the first investment. In fact, they use some of the money they’ve earned from their investments to ultimately buy the luxuries they want.

LET’S TAKE ACTION right now. What category do you belong to? In the last month, what have you found yourself doing with money? Take a look at all the things you bought. How many are active and how many are passive? Ask yourself if you saved, spent, or invested money.

Learn how to save and invest money today so you can be a smart investor. This is another secret to increase wealth.