Losing Money

Easy to Lose
Losing money is easy. There are many opportunities out there and unless you do your homework it is very easy to lose your nest egg. Day after day we are bombarded with investment opportunities in many US newspapers or from the radio or television. Some of these investments are fine and others are scams. Others do not meet the results that they promise. This means you have to carefully investigate any proposition put before you before you commit any of your time and money.

Watch if the company or institution involved is impatient to receive your cash before they are prepared to take you through the details of what the deal is all about. You need to carry out what is known as "due diligence".

“ Due diligence” in business means carrying out a full investigation.

This means you have to check every area and ask questions. Be prepared to check it out with your advisers or a trusted business associate. Don’t go into anything until it has been properly investigated. It is very easy to lose money in various ways and this will come about if you are not serious.  It will also happen if you are careless and omit to follow through the normal steps of checking before signing the paperwork involved.

Losing money is hindered if you are fully aware of the potential to lose money, and aware of all the proposals put before you. Be alert and when investing anything, look at it from the position of "devil's advocate". That is, look at it with suspicion.

Watch the Risks
It doesn’t matter what you do today, whether going into business or investing, there is always risk. Risks are part of life and the sooner you understand this the better. Risks can be minimised if you follow through the normal steps of checking and investigation.

Even if the funds available for investment, are surplus to your needs and if you lost the lot you would not be in a disastrous situation, it is still unnecessary to lose when the option of winning is there.

Make sure your risk profile matches the investment you are looking at. This means that if you are investing in a company or a business, it is advantageous if you know something about it.

If you are investing surplus cash then you can risk more, in order to get a higher return. If you are investing your life savings, you cannot entertain losing your money so it is best to spread your risk by putting it into a number of investments. Stay with safe investments even if the returns are less.

When You Can’t Pay What You Owe
You may have arrived at a situation where no matter what you try, you can't pay off your creditors. The first thing to do is keep a clear head and don't panic. Contact your creditors immediately and make arrangements with them to pay over time, by instalment.

If you don’t know how to put together an instalment payment plan, get professional help either from your accountant. If the creditors don’t accept your proposal you may have to go to court to seek permission of the court to compel the creditors to accept the instalment deal. You'll have to present a viable case and impress the court with your situation, because in most cases the court allows creditors the right to make their own decisions.

If the creditors are wise and there is a possibility of having their full debts repaid over a period, they will probably accept your proposal. This will avoid going to court and all the costs involved.

Your options are:

  1. Talk to your creditors and see if an arrangement can be made.
  2. Set out a plan for payment by instalments over a period until all debts are paid.
  3. If you cannot meet your debts and if the creditors will not accept a proposal then you will have to consider.