In investing and in life generally, we want to pay for assets, products or services that are at least at a fair price in order for those to be valuable in the longer term.
Running your life is not much different than running your investments and many investment principles can be adopted very successfully to real-life situations that will help to improve the long-term quality of your life. There is no reason to buy overpriced items as that is certainly the surest way to drain your wallet faster than you can imagine.
In trading, we are used to evaluating whether a particular asset or currency pair is cheap or expensive. Based on the conclusion we later make trading decisions which result in either a profit or a loss. In real life, the effects of our purchasing decisions are not evident as clearly or as quickly as in trading, but you can be sure that they are real!
Finding out roughly what is the fair price of a purchase is important information to know before making a decision. The fair price acts as our anchor in determining what we are comfortable with spending on this product/asset. Not knowing the fair price makes us susceptible to paying too much for low-quality offers and even for outright frauds.
Unsurprisingly, whenever we consider purchasing something there are 3 possibilities in terms of its fair price, and the same is true for trading and investing.
Whatever the reason, it’s a good idea to find out what is the fair price of this property before making the purchase. Of course, for important buying decisions, it’s also wise to hire a professional if you are not competent or cannot determine the fair price on your own.
Here are some suggestions to help you to filter out better deals when you need to making buying decisions:
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