Yahoo Finance I’m a Self-Made Millionaire: Here’s What I Learned From My Biggest Money Mistake
It’s easy to look at self-made millionaires and think — simply by viewing their surface-level achievements alone — that they must have always been good with money to get where they are today. In reality, self-made millionaires are on a personal finance journey just like everyone else and deal with their fair share of hits and misses along the way.
Read Next: I’m a Self-Made Millionaire: Here’s My Monthly Budget
Explore More: 4 Genius Things All Wealthy People Do With Their Money
GOBankingRates put out a call to the self-made millionaire community. Here’s the biggest money mistake that one individual made and the valuable lesson it taught him moving forward.
Wealthy people know the best money secrets. Learn how to copy them.
Investing Outside My Area of Expertise
Vitaly Gerko is the chief business development officer of the AI-powered video platform Viqeo and a limited partner at True Global Ventures. In 2021, he invested $100,000 of his own money each into Coursera and Udemy, investing $200,000 into the companies.
Both companies are viewed as major players in the educational technology space. Coursera made headlines during the COVID-19 pandemic when Yale University announced it was free to enroll in their online course “The Science of Well-Being” through the Coursera platform, according to CNN.
There is trouble with investing this much money into both companies, though. Gerko said that making this investment was venturing outside his core area of expertise.
“The post-IPO market correction resulted in a significant decline in their share prices, which led to an unrealized loss of roughly 70% on my initial investment,” said Gerko.
Try This: 3 Types of Investments Predicted To Plummet in Value in Summer 2024
Learning a Valuable Investment Lesson
As massive as this mistake was, it taught Gerko a valuable lesson he has since applied throughout his investment journey: it is important to align your investment strategy with your area of expertise. No failed project should result in you left empty-handed.
Gerko uses the example of someone who puts their money into a startup which does not perform well. What does the investor walk away with? In an example like this one, the investor essentially funds someone else’s learning experience. This isn’t a bad thing necessarily, but for Gerko it’s not the most productive use of capital.
“Ask yourself: what can you get back besides just hoping for a big win?” said Gerko.
From here on out, it’s important to apply learning to better finesse one’s investing skill set. Gerko said he will dig deep into learning why a project went south.
“I can gain valuable knowledge about the market, or an understanding of the challenges of building a business in a particular industry. The learnings I gain fuel my approach — investing becomes a constant process of sharpening my skills.”
At the end of the day, the investor’s money is on the line. The only person who has the most interest in its performance is you.
The Coursera and Udemy investment misstep aside, Gerko now primarily focuses on investments in the AdTech sector. Here he’s able to leverage his experiences to identify and invest in the most promising projects.
“Since you have a deeper understanding of the underlying market dynamics, you can make more informed investment decisions,” said Gerko. “Your experience can also be instrumental in potentially mitigating downside risks within your portfolio.”
He acknowledges that there will be projects where ideas, founders and teams inspire you to invest, but it’s generally the best practice to keep any allocations made into these companies on the smaller side.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: I’m a Self-Made Millionaire: Here’s What I Learned From My Biggest Money Mistake
