Resisting easy money allure

GREED: LEADS TO POOR DECISIONS WITH POTENTIAL TO ULTIMATELY DESTROY YOUR SAVINGS

- Hardi Swart

When it comes to managing your finances, two powerful emotions – greed and desperation – can wreak havoc on even the best-laid financial plans. Both are dangerous in their own way, and both can lead to poor decisions that ultimately destroy your life savings.

While they may seem like opposite ends of the emotional spectrum, greed and desperation are closely linked by one thing: the potential to cloud your judgment.

Greed: The desire for more, at any cost

Greed is a powerful force. It's the voice that tells you to chase higher returns, take bigger risks, and go all-in on an investment that promises massive rewards. Often, greed surfaces when the market is soaring, and it feels like everyone is making money but you.

The fear of missing out kicks in, and before you know it, you're pouring money into the next big thing without fully understanding the risks.

But here's the problem: greed blinds you to risk. You start believing that this time, the rules don't apply. Whether it's chasing tech stocks, cryptocurrency, or property booms, the allure of "easy" money makes you forget the fundamental principles of sound investing – diversification, patience and long-term planning.

Greed pushes you to:

Overinvest in high-risk assets: You become overconfident and put too much of your portfolio into volatile investments.

• Ignore red flags: You overlook warning signs and trust in promises of guaranteed returns.