I just read Mark’s April edition of Creating Wealth. In it, Mark discusses his trip to visit the Indian chapter of the Wealth Builders Club. The speech he gave at the event forced Mark to review the decades of wealth-building knowledge he’s accrued. He distilled his reflection into 15 salient points on how to live and invest well.

Here’s one of them, below:

From Mark Ford, editor, Creating Wealth: As a group, our Indian club members had a psychological quality in the game of wealth that put them on par with their counterparts in the U.S.: They had a wide appetite for investing.

Not only were they interested in stocks, bonds, and gold, but they also had a hunger for natural resources, real estate, and entrepreneurship. However, they seemed likely to invest their hard-earned money into opportunities they knew little or nothing about.

One young man, for example, told me he had been investing his family’s money in commercial real estate developments in various small cities. When I asked him about his valuation criteria, he didn’t have any. And a woman told me she had invested one year’s worth of personal savings in a friend’s new business—a patisserie in Kerala, of all places. I asked her about the rental cost per square foot, the expected monthly sales, the cost of help, and so on. She didn’t have a clue.

[A patisserie is a pastry shop—particularly a French pastry shop. And Kerala is a state in coastal southwest India.]

Investing in opportunities about which you know little or nothing is always a big mistake. It’s probably the most common error that investors make. It’s also the most costly.

But when speaking to this group of people, I realized that you have to be careful when talking about this idea. It is easy to sound like you are being critical or condescending. So I decided to tell stories about the bad investments I’ve made over the years, almost all of which were caused by breaking this golden rule.