For all the good that investing can bring, it can be equally powerful in the other direction in the event of a wrong choice. Say, for instance, you put a majority of your money into a tech stock that crashes quickly after it hits the market. Or, maybe you fail to properly balance your portfolio and a downturn on Wall Street ends up affecting your income more than it should.
Regardless, there are myriad reasons why you might find yourself in need of debt recovery services after an investment goes sour. While it’s never an easy thing to realize that you’ve made an unwise investment, the good news is you’re never too far gone to reverse the damage significantly. Here are three ways to reclaim your financial freedom and get back on track.
1. Ask for a refund.
If you’ve noticed your investment is bad off the bat, there is a slight chance you can ask for a refund on your money. Most are refundable for around 15 to 30 days if a refund is in the policy at all, though it may take longer than that for you to realize the how your decision will affect your bottom line. Sometimes, this part of the policy is known as the “cooling off” period. Even if you’re unsure whether or not it’s included in your terms, it never hurts to ask.
When you do, don’t automatically assume a refund is unavailable. Instead of asking whether or not you can get one, inquire about how to start the process instead. This may open up a conversation about how to reclaim at least a fraction of the funds you’ve already lost.
2. Know when to stop paying.
In the investment sphere, there is a thought process known as “sunk cost bias.” In short, this is the belief that because you have already lost money on something, you should go ahead and keep paying on it to avoid losing any more money and potentially recover lost income. Over time, we simply become attached to the things we’re paying on, even if it means we’re losing money at an astronomical rate, and we lose sight of the big picture. This is especially prevalent in the real estate investing sector. Say, for instance, you invest in a $2 million downtown condo, only to realize that the location isn’t as prime as you thought it was and the investment was unwise.
You could keep sinking money into the condo month after month just so you continue to own the property and your equity isn’t going to waste. Yet, you’ll ultimately be out even more and could be filing for bankruptcy by the time you realize the err of your ways. Instead, know when to walk away. Yes, you’ll lose the money you’ve already spent on the asset, but you won’t lose any more money moving forward.
3. Research short-term assistance options.
If you’ve lost immediate funds in an investment, you might have a difficult time paying your routine expenses, including your current mortgage, utility bills, and even your taxes. If this is the case, you’re not alone and you do have access to resources that can help you sleep a little better at night.
From personal loans to home equity lines, there are several lending options available through which you can obtain money quickly in exchange for agreeing to pay it back (plus any interest and fees) in a timely manner. If taxes are a struggle, the IRS has installment payment options in place to help you pay the balance off over time. You can read more now to see how it works, how to request the plan and which forms you’ll need.
Overall, though it might be easy to get down on yourself, it’s important that you get back into the investing game. This time around, partner with a financial advisor who can lend his or her expertise to help you choose the asset mix that will generate income rather than leave you at a constant state of loss. In the meantime, take it easy on yourself and try to remain confident. Getting caught up in the “what ifs” and “if onlys” will only render you disappointed and unable to move forward. When you see your setback as a setup for success, you’ll be better able to move forward with your head held high.
