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Investing is a subject a lot of people don't
want to think about. And there is good reason
for that. Investing seems scary. It either
sounds like something only the rich do or
something that only a skilled professional can
do. But the truth is that investing is something
that everyone can and should doóas soon
as possible.
Why should you start now?
Think about this. There are two ways to make
money. You can exchange your time for money or
you can make your money work for you. Most of us
work 40 hours a week. In this case, you are
trading your time for money. But wouldn't you
rather earn more than you are making? If you are
making $1,000, wouldn't you rather be earning
$5,000? Most people think the only way to earn
more is to work more. Work overtime is their
motto! But there is more to life than working.
Investing gives you the chance to let your money
work for youósaving you time and earning
you money.
But is the purpose of investing to get rich?
Some people don't invest because they think that
investing is something you do to get rich. They
figure they'll never earn enough to get rich, so
why bother. But that's not what investing is
for. Investing is a way for you to be able to
maintain your current lifestyle.
Think about this: what if the company you worked
for suddenly closed down? What are you going to
do when you get to retirement? Sometimes working
more is not a viable option. Investing gives you
another source of savings and earning income.
You don't invest to become a multi-millionaire
(of course no one would stop you if that
happens); you invest so that you can provide for
yourself in the way you are accustomed to both
before and after retirement.
Many people are convinced that investing is the
right thing to do at this point, but, there are
some misconceptions people have about investing
that prevents them from actually doing it. These
misconceptions are that:
Investing is too hard
Investing is too risky
You need a lot of money to invest
Let's look at each one of these
misconceptions.
Investing is too hard
You may think that investing is just too hard.
But a lot of that has to do with the terminology
of the investment industry. I mean who knows
what Fed Fund rates, mutual funds, indexes, or
blue chip stocks are? But you don't need to be
scared off by a bunch of wordsóin the end
they are just words. Just like you probably
didn't know what PMI was before you bought your
first house or what APR was before you got your
first credit card, you can learn what these
things are. And you will find that they aren't
so hard to learn. And if you seek the advice of
a professional, they can explain it to you.
Investing is too risky.
Some people have the idea that investing is
risky. Movies such as ìWall
Streetî, no doubt, lead people to think
that. But the fact is that investing is only as
risky as you want it to be. Do you want to take
huge risks? You can invest in international
stocks. Want to play it safe? Go with bonds. The
risk level is up to you and only you.
I can't afford to invest.
Many people think they can't afford to invest.
But when you look at the alternatives (social
security may not be there, job security is not
100%), you really have to ask yourself how can
you afford not to invest. And the earlier you
start, the more money you will earn. Even if
it's only a small amount, the money you invest
today will earn you big in the future.
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