4 Quick Tips To Avoid Investment Heart Break

Yves SchoofInvestments

Over the years, I have heard some heart-breaking stories of (medical) professionals who lost hundreds of thousands of dollars through bad investments:

– a doctor who lost over $500,000 in a boutique resort-style property syndicate – he had to sell his house to top up his retirement funding;

– various doctors who lost several hundreds of thousands on speculative, geared share portfolios – they were still paying down the loans years later;

– a dentist who lost over $300,000 on an investment property in a regional holiday destination – they couldn’t sell it and move on with their life;

– a lawyer who lost over $2m in a tax-effective forestry scheme…no comments needed!

And I could go on an on unfortunately. Every single time, these losses delivered a big financial blow to the families involved. Every time it involved very intelligent people who simply made the wrong decision.

It still breaks my heart when I meet new medical clients who have gone through a similar experience. Because I know the (financial) pain they are going through, and the shame they often carry with them for many years.

It should come as no surprise then that I have made it my mission to help medical professionals across Australia avoid these types of mistakes, which is why I share my tips, my experience and these stories with you.

You will find the details of my investment ebook at the end of this blog, but please see below for some quick tips.

1) Don’t mistake speculating for investing

Don’t speculate by buying ‘penny dreadfuls’ or other high-risk shares. Smaller company shares may have a place in your portfolio if that brings you excitement, but don’t bet the house on it! Always invest your core retirement savings, the money you can’t afford to lose, based on tried and tested investment principles. Please see my ebook.

2) Don’t have all your eggs in one basket

Don’t gamble everything on black…or red. Putting all your capital in one property, or a property portfolio raises the risk level to VERY HIGH. Yes, some investors make millions out of property, but many more lose hundreds of thousands. Make sure you have exposure to a range of assets, such as cash, shares, property, fixed interest.

3) Don’t mismatch your timeframe and risk

The younger you are, typically the more of your assets should be exposed to growth assets such as shares and property. Yet, I see 60 year olds who invest their entire super balance in shares. Likewise, I see 30 year olds with 60% of their super in cash and fixed interest. I think you get the picture…

4) Don’t invest because of a tax deduction

You should never invest because of a tax deduction. It is almost always a recipe for disaster, as it means that you are making an income loss on your investment – in other words, it is costing you money. Whilst this may be ok in the short term, make sure the investment is going to make you more money in the longer term.

My final word of advice: stay safe, be smart and seek advice. As Warren Buffet said, one of the first rules of investing is to not lose money!

Can you afford to lose hundreds of thousands on a bad investment? Then download my free ebook on the Principles Of Successful Investing HERE.

Yves Schoof
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Yves Schoof

Author | Specialist Adviser for Medical Specialists and Surgeons at Affluence Private Wealth
I specialise in managing and coordinating the financial affairs of medical professionals and have been recognised as one of the best financial planners in Australia. I am a Certified Financial Planner and member of the Financial Planning Association of Australia.

As I understand your time is extremely valuable and scarce, I am able to offer flexible meetings times, including outside business hours and during the weekend. I can even come and meet you somewhere convenient, or talk via videoconference on Skype.

My first consultation is free. I allocate up to 90 minutes to discuss your personal circumstances and to establish how I may best assist you. Where you already have an existing adviser, I would be happy to offer a second opinion. I always quote a fixed dollar fee before we start working together.

Please contact me on yves@affluenceprivate.com.au or call me direct on 0432 885 295. You can follow me on Twitter @YvesSchoof or connect with me on LinkedIn to receive new articles.

Yves Schoof and Affluence Private Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313. 

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs.
Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.
Yves Schoof
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