Think. Seems simple, eh? Think before you make an investment.
However, we are in the midst of suffering a small bout of “not having thought the investment through,” so we have some more specific advice for today. In the present example, we arranged for a small building project to be done without having thought through the following matters:
a. Do you have a detailed contract?
b. Details as in: total price, date of completion, penalties if project not completed on time; allowances for contingencies, like contractor breaking a water transmission pipe in two places???
c. Did you research the contractor’s license with the state contracting board?
d. Did you get two or more bids for the project?
e. Does the contractor have a clue????
As in, does he know to check for underground pipes BEFORE using a giant auger to dig post holes???)
Okay, so IFO sounds a little bitter. She is. She’s all bruised up due to mentally kicking herself for not following those rules.
It’s going to be okay. We’ve managed to save the day thanks to the serendipitous appearance of the brother of the owner of the property, who does have a clue, since he and bro remodeled her little dream cottage. She’s following her rules again now. He’s going to fix the boo-boo. The clueless contractor will be in sometime Monday to finish the job, which he assures is simple. Ha!
To summarize: the psychology of investing should be characterized by total paranoia – always ask: what could go wrong?