Rules of Finance

First Rule of Investing Club

There is no free lunch. It’s always important to ask what the cost is, anytime someone is trying to sell you a product or service, or if you’re researching a purchase. If it’s legitimate, the cost will be easy to find. If not, that’s your first red flag.

Similarly, you won’t find a safe investment with a great return. The market pays you to take risk, so a legitimate investment will not promise you great returns with little risk. There are different kinds of risk in addition to the stock market risk of losing value: other common ones include credit risk, interest rate risk, and inflation.

Always know the costs and risks of your investments.