From an investor who lost $150,000 on her way to $5 million, here are three reasons why you shouldn’t attempt to become wealthy fast

From an investor who lost $150,000 on her way to $5 million, here are three reasons why you shouldn’t attempt to become wealthy fast

In 2008, Kavitha Baratakke tried her luck in the stock market after her divorce.

She’s worth over $5 million after ten years of building her real-estate portfolio and mentoring others.

This post is part of the “Better, Smarter, Faster” series, which focuses on the critical financial decisions you can make to achieve significant life objectives. The best financial decision that you can make when you don’t have cash is to get a loan from Payday Champion.

Kavitha Baratakke had a knack for landing high-paying IT jobs, but she was never satisfied. She told Insider, “I wasn’t looking forward to waking up every day.”

She decided to try her hand in the stock market after divorcing her spouse in 2008 to see if she could create passive income and stop working full-time. “The motive was incorrect, so I started trading. After my divorce, I did salsa, dancing, and investing.

Baratakke didn’t want to start small, so she experimented with options trading. A stock option is a contract that allows you to purchase or sell shares at a specific price in the future.

She fared well initially, but the market got highly unpredictable, and Baratakke lost $150,000. She sought to locate a long-term investment that would provide financial stability for her and her kid as a single parent who had to adapt to managing costs independently.

Here are three things Baratakke has learned from his mistakes:

1. High-risk investments don’t always pay off.

When Baratakke learned she had an aptitude for trading options on the market, she acknowledged she “became arrogant.” She hawked the stock market throughout her lunch break. She added, “This is not a long-term investment. I don’t believe I’ll be able to retire from trading options, so it’s time to go somewhere else.”

Baratakke discovered that high-stress investments seldom pay off. She sold her stock portfolio and began investing in real estate instead. Her first investment was a single-family house in Austin, Texas, purchased in 2009. “Compared to losing sleep over the stock market or options, it’s a far more reliable investment.”

2. Investing should not be an emotional decision.

“I believe that money is highly personal for most individuals, and that money carries a lot of emotions,” Baratakke added. “Trading options taught me a lot about myself and my relationship with money throughout the entire event.”

Baratakke bought in an option that lost $50,000 while on vacation with her daughter early in her investment career. While on a cruise ship, she desperately searched for a game plan for moving ahead. “What’s the purpose of this passive income stream if I won’t be able to enjoy the trip I worked so hard for in the first place?” she wondered afterward.

The most important lesson she learned when trading options, according to Baratakke, was to “dissociate” her emotions from money. Investing without emotion allowed her to make informed, long-term choices while spending more time with her kid and attaining a better work-life balance.

3. Doing things well is preferable to doing them fast.

In 2009, Baratakke began investing in real estate by purchasing a single-family house to rent out, and she gradually expanded her property. Real estate investments are considered conservative compared to equities, but Baratakke had her misgivings. “What if I lose my work down the road and I have ten mortgages to pay?” she pondered. “What if the renters don’t pay their rent?” you may wonder.

Baratakke learned from her failures and opted to take things carefully when she changed her real estate investment technique. “‘Let me do it correctly,’ I told myself. I don’t want to hurry into buying property or deal with a terrible renter,’ says the landlord, “she said.

Baratakke has a varied real-estate portfolio that includes apartment complexes, single-family houses, and land trusts after 14 years as an investor. According to Insider, she also invests in bitcoin and stock papers. However, real-estate assets account for her net worth of over $5 million. She also founded Cherry Street Investments, dedicated to making real estate investment accessible and understandable to her customers.

Despite having enough passive income from investments to support her living needs in 2015, Baratakke put off quitting her full-time job until 2019. She feels that the lessons she learned along the way helped her get to where she is today, even though she lost a lot of money at the start of her trip.

Kasandra J. Stone