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Posted 9 November 2020
By DustedPenny
Bad investments are not new. If many people lose more than they make in an investment, automatically, it’s a bad investment. Some might say that the same investment people call bad made them rich, then we say, “They’re lucky.” 

Yes, you can make investments that might keep you in a deep hole for a long time. These investments have been tested, tried, and proven not to work. Hey, you might take the risk and make big bucks, but do you want to risk your hard-earned money? I know you don’t want to go broke too. 

Investing is risky; even the best investors in the world lose money. You can read this post by MarketWatch to see how Warren Buffett lost $7 billion in his last three investments. When you invest, it’s best not to put all your investment in one deal. Warren Buffett lost a lot of money in some investment deals, but other investments made money. He has been doing this for many years, and he has a good team behind him. 

You might be starting your business journey, but that doesn’t mean you should invest in any shiny objects. When everybody is investing in a particular thing, that doesn’t mean it will bring a return for you. 

As a small investor, you need something that will bring returns in a short time. Those who wait for years have large sums of money, and if, for example, a particular stock goes up one percent, they will be taking home millions. But let’s say, for example, you invested $1,000, and the stock market goes up a percent you will only go home with just ten dollars. 

Below is a list of investment options you should stay away from if you are a small investor:

1. Lottery

Like it or not, when you buy lottery tickets, you are investing. You take out a budget and decide to buy a lot of tickets in hopes of getting a return. But do you want to do this to yourself? Before you play a lottery game, you’ve lost; you are more likely to lose money than win. I know the winning prize is large, but have you asked yourself why the jackpot is that big? It’s because a lot of people are losing money. 

Did you know that winning the lottery does more harm than good? See for yourself below.

  • The Tax That Comes With Big Wins

Oh yeah, big wins, significant tax. When you win the lottery, the state will collect some of the money; this is how they say, “Give us our portion. We did the work". When people lose money, the jackpot increases. 

The government doesn’t make money at the front end; they let the pot become so big that everyone would buy more tickets. Well, that’s what they want. If everyone in the country throws a dollar at the game, it will amount to over $300 million. Yeah, there are expenses, costs of printing tickets and employees, and many more. But they profit or make back some money when they heavily tax you. Learn more about how much the government will take from your winnings in this post by CNN Money.

  • Lack of rest

When you win the lottery, say goodbye to rest, at least for the first year of winning. Everyone would want to get in touch with you, and even if you ask to hide your identity, people will still figure out who you are, where you live, your social media accounts, and your family members. 

There will be stalkers, of course. Oh, what about the press? Yeah, they’ll be your neighbors. If you like, leave the country, people will find you. It’s nothing to be scared about, but that’s what comes with winning the lottery; you become famous immediately. If you are a private person, forget it, because people will always disturb you. 

2. Digital Currencies

Are you a bitcoin fan and want to invest? Well, if you have little money, then you should be thinking of cryptocurrencies. I mean, you can grow and even add more money to it and make a lot of money. But is this possible? The answer is, “Yes.” You can see top bitcoin millionaires in this article by Investopedia. 

Cryptocurrency is an excellent investment for some. But for others, it’s a money sucker. See how this man lost his savings when bitcoin crashed in this post by CNN.

The facts on investing in bitcoin or any cryptocurrencies:

  • Very Risky

When you invest in cryptocurrencies, you are saying, “I don’t care if I lose my money or not.” If you’ve never had this in mind or said it at all to yourself, I hope you won’t feel bad when something weird happens to your money. 

Due to the volatility in the cryptocurrency market, you could wake up one morning and find out that you’ve lost fifty percent of your money. While this can happen, what can also happen is you waking up to find out that you’ve gained fifty percent because the market went up. 

  • No Government Backing

Cryptocurrency still exists because people believe and see others use it as an exchange. For example, I can choose to give you my car in exchange for your house. If we think the home and car are of the same value, there’s no reason we can’t make the trade. You can learn more in this post by Brad.
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