“You’re out of school and working in the real world. You may not be working the job you want, or making the money you thought you would at this point in your life; but it’s time to make that money work for you. I deal with a lot of clients on a day-to-day basis that vary in age and income, but what really drives me crazy is when I see young people who are too afraid to invest their money into anything. Instead they keep it under their mattress, or worse, spend it on things they’ll find useless about five minutes later.
I’m not here to scrutinize every cent people spend their money on. Despite being someone who is a relatively young investor and professional in his field, I spend money on some pretty stupid things too. What really gets me are the countless excuses that people come up with for not putting their money to work. Whether it’s hearing about bad experiences from other people, not having enough money, thinking it’s too complicated, or just not knowing their options, people are very quick to give up before they even start.”
The following are four bad excuses for not investing:
1. “I know people that lost money”
– Yes, investing comes with a risk; just like riding your car comes with the risk of a car accident. Despite the fact that we can turn on our TVs at any given time and hear about the most horrific car accidents, many of us still drive.
2. “I don’t have enough money to invest”
– People have more money than they realize. Not having money and not managing it well are two completely different things. There are a lot of sources that money comes from (other than your 9 to 5 job) that you can use to start with. Tax refunds and grandma’s birthday money are great starting points. The problem is that this money ends up getting spent on a new iPhone that will be out of date in about six months.
3. “Investing is so complicated”
– Before diving head-first into investing, it’s definitely worth it to grab a few books and get some background knowledge. Still confused? Ask someone who knows more about it. Look at your friends and tell me that not one of them might be able to help you clarify things. Even if you’ll be getting a professional to manage the finances for you, it’s worthwhile to have some kind of idea about what is going on with your money while it’s in someone else’s hands.
4. “I don’t know where to start”– Not comfortable making a call on investments yourself? Have a professional do it for you. Just remember that using a professional to invest your money doesn’t rid you of the risk of losing that money. What you’re really getting is someone who has invaluable experience and won’t make beginner’s mistakes.
“As a young investor, you have a big advantage on your side; time. You can afford the riskier investments that have the chance for the greatest payoffs. If you lose your first $1,000, you will have the rest of your life to make it back. That $1,000 over the next 50 years of your life is insignificant, especially if you get a good lesson out of it.
The bottom line is this: where there’s a will, there’s a way. Most of the fears young people have about investing their money are just misconceptions that are blown out of proportion. Don’t let that keep you on the sidelines.”
This is a write up is based on the following article:
Bad excuses for not investing while you are young by Sasa Jurovicki.
It was posted on August 3rd 2013 on the Financial Post website.
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