Do you invest all the time? Economists teach us about opportunity cost as it relates to everything we do. What exactly do you sacrifice in exchange for making an investment? This is when you should not invest.
By Ugodre Obi-Chukwu
When you cannot afford a three square meal
We have often read of people making several sacrifices in life just to invest. Some sleep in their car, sell their houses, quit their jobs etc. However, will you go a hunger strike in exchange for an investment goal? It is foolhardy when you have to starve yourself just because you want to put that extra money you would have used in eating a decent meal in an investment that is yet to yield a dime.
When you have a health problem
It certainly doesn’t make any sense investing cash you would otherwise use to cater for yourself when you are sick or have a major health setback. Your health is certainly not an opportunity cost to an investment no matter how viable. You want to be healthy enough to execute your dreams and not sick. An investment is not wealth rather Health is Wealth.
When someone dear to you is in need
There are times when we have people dear to us who have need that in all fairness supersede our personal goals. It could be that they have a health challenge or even a financial need to avoid bankruptcy. How does one explain sacrificing a sick wife or child in a bid to pursue an investment goal no matter how viable?
When you haven’t paid your children’s school fees
Imaging telling your child, daddy can’t pay your school fees because he has to buy shares? It makes no sense sacrificing your child’s education for an investment goal. They are mutually exclusive investments and shouldn’t even be thought of as close substitutes. The most important investment is the education and welfare of your kids no matter what.
When you have a debt to pay
How many times do we see debtors giving us excuses to repay their debts despite seeing them making significant investments in other areas. You have someone owing you money that is over due and telling you he does not have the cash to pay now, yet they end up investing. Overdue debts should be serviced ahead of investing to avoid bankruptcy litigation.