- 16th Jan 2015
What are your reasons not to invest?
The subject of investing can strike fear into some, make others glaze over with boredom, and perhaps spark a little interest in a few. Regardless of which camp you fall into, the benefits of investing are clear. It’s all about growing and protecting your savings and preparing for your future.
You can probably think of a number of reasons not to invest. Some may be valid, and some may not be. And, to be honest, you probably know which ones are and which aren’t.
So, if you’re not investing your money, why not? Here are a few reasons that may be familiar.
4 common reasons not to invest and how to overcome them.
Fear of the unknown
As a whole, the finance industry doesn’t help itself and investing has been made a lot more complicated than it needs to be. In turn, this doesn’t help potential investors. For someone that isn’t involved in the investment industry, listening to lots of jargon is never going to encourage any form of interest or involvement. Investing buzz words are just noise. Loud but inaudible noise.
Unfortunately, this can become a real barrier for a lot of people – and understandably so. The trick here is to try and cut through all the noise and jargon and concentrate on why you want and need to invest. Most of what you hear and read about is, quite frankly, irrelevant. An expert level of knowledge doesn’t need to be a requirement. Investing should be straight forward and easy do to for all. Our manifesto says just that, in fact.
So, as long as you know you should be investing, and have a way to do it, that’s all you really need to know. So what’s stopping you?
This is a big reason not to invest for a lot of people. And it can be a costly one too. Procrastination can creep into life on a daily basis and investing is no exception. The cost of delaying the decision to invest, however, is clear; it’s the potential growth your money has missed.
The problem with starting to invest is it requires you to think about lots of things you’d rather not. “How much money do I spend each month? How much can I afford to save? How much do I need to save?” And then, once you’ve answered all of these, you still need to decide where and how you are going to invest.
Making sure you don’t procrastinate too long is the key. Accept that sorting your finances isn’t always a fun or interesting job, but a necessary one nonetheless. Set some time aside and break the task up to make it more manageable. Once you’ve worked out how much you want to invest, then it’s time to decide if you want to be managing your investments yourself going forward or you’d rather someone did that for you.
Worried about losing money
We are programmed to be loss averse, so having this type of worry is fully understandable.
Having diversity across your investments is an important method for reducing the risk within your portfolio. The rise and fall of different asset classes are often correlated so by holding a mix of different asset classes you can look to shelter your investment portfolio from potential volatility.
With most things in life, there’s a degree of risk. What’s important is managing that risk and only exposing yourself to the amount you can tolerate and have the capacity for. Working this out, and putting your money into a suitable portfolio of investments can be easier than you think. And can take a lot less time too.
Procrastinators often tell themselves they don’t have enough time to think or do anything about investing. And sometimes it can actually be true – especially if you’re considering DIY investing. Doing it all yourself can take up time, and your life might just be too busy to give it the time it deserves. If this is the case, it’s important not to neglect investing completely. The conundrum of not having time to manage your investments yourself, and not being able to obtain financial advice now has an answer. Put a little time aside to work out what you’re spending and what you have available to invest, and leave the rest to us.
A short amount of time spent now can save a lot in the future.
If you do fall into one of these categories, hopefully you feel like you can take the next step. Or you at least know what you need to do, if you didn’t already. At the end of the day, investing doesn’t need to be glamorous or interesting, but it is something you need to be actively considering. Take a little time to question your reasons not to invest and sort out your finances, then get back to doing what you enjoy. With one less thing to worry about.
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Any news and/or views expressed within this article are intended as general information only and should not be viewed as a form of personal recommendation. This article is not directed to, or intended for distribution or use in, any jurisdiction where such distribution would be prohibited. To the extent permitted by law, Wealth Horizon accepts no duty of care or liability for loss occasioned to any person acting or refraining from acting as a result of any material contained within this article. Where past performance is shown, this should not be taken as a guide to future returns. Investment in the stock market is not a suitable place for short term money. The value of investments and associated income may go down as well as up and you may not get back the full amount invested.