You’ve heard it many times: there is power in numbers.
Going into a project with a group of like-minded investors has plenty of attractive benefits:
You can pool your resources to take advantage of opportunities you wouldn’t otherwise be able to alone.
Investment groups or networks are a great way to share your ideas, learn about new opportunities, learn from the market, and explore new possibilities.
Yet sometimes, even the most well-intentioned deals can go sour.
Imagine a classic example: A married couple, close to retirement invests their dollars with an investment group with the promise of a 10% return.
The project looks promising. The group discusses the project and appears to have a great deal of knowledge on property management.
As new investors, the couple has no reason not to trust the information shown to them. They review the project details, and after careful consideration decide to invest their resources with the group.
In around 6 months they should get their money back and a healthy return.
Here’s where things head south.
After 6 months, there’s no feedback about the project, and certainly no money back.
Eventually, it becomes clear there will be no return anytime soon. Things take longer than expected. They realize they will not get as much return expected either. This happens occasionally, and doesn’t solely stem from bad intentions.
There Are a Few Reasons This Happens:
1. They are amateurs.
Even the most well-intentioned, seemingly credible investment groups can fall flat; and it usually happens when there is a lack of knowledge and experience. Everyone has to start somewhere, but you don’t want to invest your money with beginners.
Every investment has a risk — that is normal. But some risks are better left untested. Do your research and only invest with groups who have tangible experience and can demonstrate results.
2. They have on blinders.
They believe so much in their product or service that they do not take the time to check the facts. They are so blinded by their belief in their service, that they don’t go back to their proformas to see how their deal actually performed.
Imagine if they did go back and checked their investment documents — what do you think they would find?
Again, always do your research and ask for examples of prior projects. What you want to see are real-life results — not projections and “could be’s.”
Only work with people you have references on, or those referred from people you trust who have already invested with them.
3. They have bad intentions.
Yes, there are a few of these as well. Be wary that not all investment groups are created equal, and some will act with malice. They are sometimes quite convincing. Always do your own research and be wary of promises or “sure things.”
Tips for Investing With Groups
- Always do your own research.
Knowledge is power!
Learn as much as you can about the world of investing, the different kinds of investments, who you are working with, and the kind of projects in which you’re interested.
You can’t rely solely on the knowledge of others — you have to do the work yourself!
- Think long-term.
What are your long-term goals?
Do you need cash in a certain amount of time, or are you looking to the broad future?
Align with projects and groups that meet your timeline.
Let’s connect and I’ll share my journey towards financial freedom and why I’m now so passionate about helping others do the same.
When You’re Ready to Talk, We’re Here.