Top 10 Worst Things to Invest Your Money In

Top 10 Worst Things to Invest Your Money In

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You might as well just burn all that hard-earned cash.. Welcome to WatchMojo.com and today we’ll be counting down our picks for the Top 10 Worst Things to Invest Your Money In. For this list, we’re looking at investment opportunities that tend not to lead to a positive return. Only legitimate methods will be considered – no illegal stuff like Ponzi schemes.

If the movies have taught us anything, it would be that diamonds last forever. While that’s not actually correct – as everything degrades with time – waiting for a piece of jewelry to offer a return on investment might actually feel like an eternity. Like a fine piece of art, jewelry's true value is only known after a few years. In the case of gems, diamonds, and jewels; their appreciation goes up after around 20-30 years when they could be considered as antiques. Experts recommend buying pieces for your own personal enjoyment rather than as an investment.

Knowing when is the best time to take the plunge is far from easy, especially when it comes to CDs. Investors can loan part of their income to a bank for a certain amount of time, with a pre-determined interest rate leading to a small but steady inflow of excess cash. Themoney cannot be withdrawn before the time period is complete however, and the interest rates offered in the 2000s have not been great. Once an investment is made, there is no going back; even if the rates suddenly skyrocket, someone who already invested in a CD would be stuck with their lower return on investment.

It’s an investment scheme so notorious that there are YouTube channels dedicated solely to advising people on how to get out of one. A timeshare is basically renting out a vacation villa for a few weeks in the year – with a substantial markup in price. Sales agents might suggest that the residence can be rented out for a profit, but in reality, this rarely happens. Renters also need to pay for maintenance, development, and advertisement – while agents take a commission on any successful sale – because sometimes... life is just not fair. At the end of the day, it will usually be cheaper to just rent a different place every year.

Exclusivity is not always a good thing. Hedge Funds offer a flexible and diversified portfolio that might lead to a sizable return in the long run – if the investor knows what they are doing. Hedge funds require a huge investment of at least a few hundred thousand dollars and include a lock-in period, meaning the money is truly tied up. The fees are hefty as-well, with most asking for around 20% of the profits, in addition to a 2% initial charge. Mutual funds are cheaper, but they have seen such a poor return in recent years that they’ve also lost their appeal.

#6: Bitcoin

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Ah yes – the digital currency, the alternative to paper money. Or is it? In the 2010s, due to a handful of mainstream entrepreneurs backing it, Bitcoin rose in value to $6165 USD. While it could very well increase further over the next few years, Bitcoin is so volatile that there is always the risk of a sudden drop in appreciation. More importantly, as there isn't a physical representation, no country is obliged to honor it and most companies have yet to accept Bitcoin payments. Combined with the high transaction fees and the slow processing time, we are unlikely to see a world where this digital currency replaces debit cards anytime soon.

Before investing in anything, a proper understanding of the market is crucial. When it comes to foreign currency, they are influenced by a variety of factors and their value can easily change overnight. An investor not only needs to constantly follow the global economic scene, but also be able to accurately predict the impact caused by critical world events. There is also leverage to take into account – where someone risks more than the value of their capital – which could lead to a profit or a substantial loss, depending on how the cookie crumbles.

Everyone dreams of buying a share for the next Amazon or Microsoft. Unfortunately, the aforementioned companies are definitely the exception to the rule. When a company goes public, people can get in on the action by buying shares to hopefully trade for a profit later on. The thing is that just because a company goes public does not mean it is doing well, and the only near-guarantee of a return on investment is to already be a shareholder when it is made available to everyone. More often than not, you’ll be late to get in on the action and the shares will be worth little in under a year.

We all need somewhere to live, but the decision of what to buy should not be impacted by its potential resale value. Houses do appreciate with time, but they are one of the only assets requiring constant investment. Even if sold for a substantially increased price, the cost per month for taxes, insurance, interest on the bank loan and utilities are likely to eat away at any profits. There is also the chance of being forced to sell while the market is low due to necessity – leading to a hefty loss. It’s always worth evaluating the neighborhood before you move in… just don’t treat it like an expected source of income.

#2: Business Partnerships

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When setting up a business, investors are needed to provide the start-up capital. Usually taking the form of close friends or family members, they supply a certain amount of cash for a stake in the company. If the business ends up blossoming, this could lead to a great return, but the risks are high. If the expenses eclipse sales, the stockholders’ equity is the first to suffer a loss. There is also the option of a debt investment, where money is loaned instead of invested, which is a safer bet in the case that the business goes bust. Before we unveil our top pick, here are a few honorable mentions. Restaurants 10-Year Treasury Bonds Art & Collectibles

Seemingly offering a low-risk alternative, penny stocks are rarely worth considering. Priced at under $5 per share, with some going as low as 20 cents, the value of these companies fluctuates continuously. Some could easily double in appreciation over a week, suggesting a decent return on investment. The problem is that assets are only worth a damn when there are buyers on the market, which tend to not come easy with penny Stocks. Building a diverse portfolio is a must as investing in only one stock is a disaster waiting to happen.