Manila, Philippines

Investment Vehicles to Avoid

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As you make important decisions about your money and what to invest in, it’s good to know which investments are good and which ones aren’t. Unfortunately, this isn’t always clear. You might end up confused about what to do. Confusing policies are everywhere. Along with this, some investment brokers act more like salesmen than teachers, which can leave you feeling lost.

It’s necessary to remember that this is your money that you’re investing. You might be planning for retirement or another major expense. The wrong investment can leave you in a tough situation. By doing your research and understanding which investments to avoid, you can end up in a great place financially.

Let’s look specifically at the investment vehicles you should steer clear of.


Whole life insurance

Whole life insurance is a bad idea when it comes to life insurance and investments too. Often, people don’t end up getting the returns they were promised. The costs and fees are rather steep too so you can lose a lot of money here. One of the biggest problems with whole life insurance is that it has confusing terms. It’s not worth the money and you also probably don’t understand what it actually means for you. In reality, very few people actually need what whole life insurance policies have to offer. If you’re wanting to get life insurance as an investment, do some research and find a few other options. A good independent life insurance agent or advisor can usually help you with this. These days it’s not unreasonable to purchase life insurance online without having to visit your local agents. Many life insurance agents have adopted the digital approach to help save time on all fronts.


Timeshares allow you to purchase a share of a vacation resort. When you do this, you get to stay at a resort through an interval-ownership setup. The problem with this is that you actually won’t be saving any money or getting very many benefits. Another downside is that you’re stuck going on vacation in the same place. You can’t mix it up and explore new places. Timeshares usually go down in value and have high maintenance fees. You aren’t going to be getting any extra money from owning a timeshare anyway—even if you try to sell it.

Lottery tickets

What’s shocking is that some folks see lottery tickets as being a good investment—or an investment at all. Lottery tickets should be avoided. You may throw hundreds of dollars away on lottery tickets and walk away with a couple of bucks. They’re entirely dependent on luck, which indicates they’re a bad investment. Some people buy lottery tickets for fun once in a while. They aren’t counting on these tickets for their long-term financial plans though. You shouldn’t either!

Hedge funds

Hedge funds are a bad idea. They usually draw people in because they are somewhat exclusive. Not everyone has the ability to invest in them. In reality, not everyone should actually want to invest in a hedge fund. Hedge fund usually cost a lot of money. Keep in mind that this is money that you likely won’t see again. It will probably go directly to the hedge fund’s manager instead of you. Plus, there is a huge risk with hedge funds. Lastly, they aren’t liquid. Choosing hedge funds means that you’ll be missing out in several areas and it’s just not worth it.

Futures trading

Usually, currency and commodities are involved when it comes to futures trading. The problem here is that these types of investments require you to use leverage. You have to make guesses based on what the return might be later on. This means that you’re putting yourself at risk and you will probably end up losing a lot of money. This is one of those things that should be reserved for people who are into day trading and other risky investments.

Savings bonds

Savings bonds are often given to children by their relatives. They’re seen as a sweet gift, but they really don’t do much good. There’s an extremely low return rate. They’re not really worth it. Savings bonds might have been more popular back in the day, but they’re still around and in use today. It’s best to find another investment option if you’re considering savings bonds. Mutual funds are a good alternative to savings bonds because the rate of return is much higher. Plus, mutual funds can be diversified.

CD savings accounts

CD savings accounts are another type of investment that provides you with a low rate of return. In most cases, you will get about 3% back. Depending on the size of the savings account, you may get essentially no money. Not to mention, you can also lose money as a result of inflation. It’s best to save your money elsewhere so that you don’t lose it.

When you understand the investments to avoid, you can make smarter decisions about the good ones out there. As you navigate the world of investments, you should be aware of what all is available. There are lots to choose from, which can be confusing.

It’s important that you select investments that are actually smart. By doing this, you can get a better rate of return and plan for your future as well. Don’t waste your time with investments that are too risky.

You should do some research, talk to trustworthy professionals, and make sure you understand an investment before you decide to go through with it. This will protect you and your money long-term.



While you’re navigating the world of investments, there is one good rule to follow. You should make sure that you fully understand the investment before signing any papers or making any payments.

All too often, people end up with bad investments because they simply don’t know what the investment actually means. There are a couple of reasons for this. Some people don’t do enough research on their own. Additionally, they rely on an investment broker to teach them what they need to know. This can lead to further confusion and mistakes too.

Now that you know the investments to avoid, you can begin investing your money where it will actually count. Be sure to learn everything you can about an investment. This will be beneficial in helping you to get the most from your money!

To learn more about various investment options, and to apply in your life the WISER PINOY = RICHER PINOY framework, download your copy of the #10Steps to a Richer Life now!

Contributed by Sean, a freelance writer and co-founder of InsureChance.

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