The flow of money is predictable. If you are familiar with the financial system, you can tell which venture is going to make money and which one is not. You can even be able to say how much money a business is going to earn. If you understand consumer behavior and spending preferences, you can easily point that out. But sadly, too many people are blinded by optimism. And they attempt to make money from business ventures that never work out. The 7 business ventures here are things people often get excited to jump into but produces pain afterward.
A Little Story
Recently, I was working in my home office and one of my younger ones approached me. With the way he was walking I knew he needed something. He proceeded to ask me for a certain amount of money. And I had my suspicion.
The time he was asking for the money was odd. It was nighttime. And he was just through with a phone call. It was rare for him to ask money like this and he knew I would give him if it was a true emergency. And the money he was asking for wasn’t much. But I suspected something.
I asked what he wants to use the money for. At first, he was reluctant. But he knew he wouldn’t get anything from me if he doesn’t come out clean. And that is what he did. He told me he wanted to buy Ethereum. And that was interesting.
First, he knew nothing about cryptocurrency and I know quite a lot. I have been involved in crypto since 2017. Second, he is not the kind of guy that understands paper or digital investments. He is more of a hands-on kind of person. So, why was he asking for money to buy Ethereum? Someone called him to do it.
What he got from me was an education, not the money. I didn’t discourage him to buy, I just told him I wouldn’t give him money to do that. The reason is that he knew nothing about it and would likely get played.
This is so common in the world today. People getting excited about business ventures that never work out. So instead of finding out painfully in the end, here are a few ventures to avoid:
1. Passive (or Casual) Stock Trading
There was a movie about Wall Street where an older man was talking to a young guy who just started as a trader. He said:
“Let me tell you something here, boy; Nobody knows nothing”
This meant that the young guy should not trust anything anybody says regardless of how highly placed they are. The sentiment is that everybody is just gambling.
In reality, most successful traders on Wall Street do very little gambling. The professional ones that have stayed successful have insights, historical patterns, experiences, and tools that limit their guesswork to a bare minimum. The average person trying to play the game will be run over.
People get tempted to get into stocks as a result of stock tips. And stock tips are super catalysts of failure. Those who share them often boast of a previous result, like a stock surge of 80%.
The problem with this is that once you put your money in, getting it out is very hard
They can make you happy a few times by saying your stock is up by a certain percentage. But they will do everything legally possible for you not to take the money out but just keep it in and keep adding more.
If you want to be a professional trader, train yourself for it, and dedicate yourself to it. However, being a casual or passive trader never works out well. Just dump the idea. Stock picking will never work for you.
2. Gambling
The problem of gambling is that there is no sense of value to money if you win. If you ask the average person what they would do with the money they win from gambling, you would get very absurd answers. And that is why casinos exist.
The concept of gambling is a scheme to collect money from people who don’t value it to give to those who understand how money works
In gambling, the system is designed to make people lose money. And also to make someone feel lucky. Gamblers lose much more than they gain over the long term. But that is not the greatest disadvantage.
The moment a person wins money from gambling, the person’s mind will always go back to gamble as a way to make money. It often creates an addiction that keeps people in penury all their lives. Just the odds of winning should get any sane person uninterested.
The temptation to gamble comes to people who have gambled before and made a winning. Their mind tricks them that it is some kind of skill. And it is not a skill.
Gambling is not a skill
Cheating while gambling can be a skill (which will send anyone to prison). But if you think you are good at gambling or you finance someone with gambling skills, it is not going to end well.
3. “No-Product” Network Marketing
This is just a simple description of a Ponzi scheme. Of course, nobody tells you that their stuff is a Ponzi scheme. There is always some form of a logical explanation that introduces the concept. The problem is that the logic always caves in somewhere in the middle.
Anything that can suffer a significant loss of value by a rumor should never anything to do with network marketing. The problem of Ponzi network marketing is not just the money you lose, it is also the relationships you destroy.
A network marketing without a product will eventually turn into a form of ponzi scheme
Network marketing as a business is good. But when it is all a game of moving money around and no value is being added to anyone, then it is just a matter of time before it collapses.
4. Providing Service for Family Members
This may work out fine in some societies and cultures. But in most societies, this never works out well. In fact, it is the beginning of many troubles. Don’t assume that it will work out fine in your case. It is better to assume that it won’t.
If your family members don’t pay, will you arrest them?
Don’t let how they need your assistance to bother you. It is always better to refer them to other people. Refer them to your competitors. They will take strangers more seriously.
Family members will not take your service seriously. That is the most dangerous part. So, if they pay you your charge and your service doesn’t produce the result they want, you know that you are in bigger trouble. Just find a nice competitor and help the competitor’s business. The goodwill often comes back to pay off in a big way.
Don’t be too desperate to sell your services to family members.
5. Playing With Cryptocurrencies
If you understand the crypto market, do as you wish. But if you don’t, deceiving yourself that you do will only harm you. Investing in cryptocurrencies requires a strategy like every other business. It doesn’t just magically make people quick cash.
Crypto is not a way to make money, it is a way to keep money
Trading cryptocurrencies is more like trading forex. You can win big very fast and lose big even faster. It is not like stocks, although some make it like stocks. If you don’t know what you are doing, you will be full of regret later.
There is a reasonable strategy for everyday people concerning bitcoin. But that’s about the limit the regular person can go. To go any further, you need to become very knowledgeable about the industry.
6. Real Estate Investment Without Real Estate Education
You can begin to spot a pattern here. A good business without the knowledge of how the industry works is a recipé for disaster. As it is true with stocks, it is also true with real estate.
Go to a real estate seminar and learn before you start buying properties
Do you know about homeowners’ associations? Do you know about zoning? Do you know the different land permits in your area? There is a lot of information that goes into buying properties. If you think you can just jump into real estate business because nothing can hardly go wrong, you must be kidding.
The first step in investing in real estate is investing in its education. Even if you are going to be a silent partner, you still need to know what is going on. Don’t let anyone tell you that one property is a deal of a lifetime. If you let the desire to make fast money overpower you, it won’t work out well in the end.
7. An Online Business Working Well for a Friend
There are all kinds of online businesses where many people have achieved tremendous success. Some of them include e-commerce, dropshipping, affiliate marketing, and many more. People who enjoy this kind of success are either the early birds who got into the business when it was unpopular or the had workers who worked extra hard to get to the top.
The idea that an online business will work for you because it works for a friend is very dangerous. It never works out. In most cases, people underestimate the level of hard work required for an online business to get good results. Just because you paid for an online course doesn’t mean they will do all the heavy lifting for you.
There is no smart and easy online business that can yield quick cash
You have to do what you are passionate about. You make up your mind and focus on something you are willing to spend the next 10 decades doing.
If you get in business to copy a friend, you can be certain that it won’t work out.
In summary, people expect to make money because they have put in their money into something that promises a higher yield. The game of making money doesn’t work that way. There is always a better way.
Don’t get tricked into any of these 7 things.
Cheers.