Five of the Worst Investments You Can Make

People are always quick to brag about the wise financial investments they made, and even quicker to share how much they made. However, few are willing to speak up about any financial blunders they made beforehand.

When it comes to investments, it is difficult to determine which one will yield the highest return in profit especially when no one mentions what investments should be ignored in order to avoid financial disaster. The problem is, many people use investments as a tool to “get rich quick” to get out of debt. When it comes to debt, people should use practical methods to relieve themselves of it, such as a balance transfer credit card. When it comes to investments, people should be looking for longevity.”

In order to avoid making a financial mistake, here are the top five worst investments you can make:

  1. Penny Stocks

To many, penny stocks are extremely appealing because their low price. Penny stocks are generally priced under $1 per share. Although that sounds phenomenal and like a quick way to spend a little and gain a lot, penny stocks are priced low for a reason—trade volumes are low. As such, websites and marketers can easily manipulate penny stock prices, which makes it exceedingly difficult to determine which stocks are fraudulent and which ones are real.

  1. College

financewand.comAttending a university itself is not a financial mistake because attaining higher education truly is an investment for your future. But, the problem with college lies in what college you attend. Attending a disreputable university is a poor financial investment because you will be stuck under student loan debt with few employment opportunities.

Make a wise investment by researching which universities have a high statistic of post-grad employment. These universities are usually inundated with well-respected professors who have quality contacts, giving you an opportunity to land a well-meaning job after graduation. Because student loans come with a hefty price, make sure you invest in a university that will pay off.

  1. Timeshares

Timeshares tend to trick investors—especiallynew investors. Owning a timeshare sounds like a great investment and looks like one on paper as well. However, it is one of the worst investment choices you can make because while the business model looks promising, realistically, timeshares offer little in return.

The main reason a timeshare is a poor investment is because unless an investor spends a great deal of time there, it costs far more than it’s worth. Most timeshares only get rented out about 40% of the year, which means the investor is earning nothing during the other 60% of the year. Additionally, if an investor wants to sell the timeshare, he or she will only make about 50% or less of the original price.

  1. Large Homes

Much like a timeshare, investing in a large home well above your means makes the house more of a burden and less of a valuable asset. A big house does not automatically yield a big return investment. In fact, many large homes yield very little in a return investment because regardless of house size, a house is only worth as much as the neighborhood is. Just because you qualify for the expensive mortgage does not mean you should risk your savings and pay for it.

  1. Ill-Researched Investments

Any investment you did not accurately research will probably be a poor financial decision because they potentially could have hidden fees, hidden interest rates, or require you to do work in order to yield a profit.

Before opening your pockets and making a financial decision you will regret later, be sure to give each potential investment ample research.

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