Time and money are fleeting and as you think about the future, you might encounter some investing myths that can hold you back. These myths can set you off on the wrong direction and rather than getting to where you plan to be, you end up making the task ahead harder that it should be.
You will encounter financial mistakes regardless what you set out to do. The important thing in all these is for you to learn and move forward. As most people say, what matters is not how many times you fall down but the number of times you pick yourself back up again. These mistakes will help you become better and wiser down the line.
But when it comes to making investments, one thing that can truly hurt you are investing myths that you would believe in. It does not help as well what Time.com found out in one survey they had about investments and retirement. You might be surprised that one out of three Americans has saved absolutely $0 for their retirement.
Investments need to be a big part of your financial repertoire because as you get older and near retirement, you would need to rely on these to get you through the rest of your days. Investments will also help you reach your financial goals faster such as paying off a house or even setting up a business on your own.
Harmful investing myths preventing you from reaching your goal
If you are looking at making investments but are concerned about some of the myths that seem to proliferate around, here are a few of them and the truth behind each.
- It is complicated. A lot of people might be quick to tell you how complicated the investment world is. They would then start to ramble off confusing acronym or terms that would make cold sweat run down your forehead. You might also encounter people telling you about financial risk and how you need to take this into consideration. They obviously know a little more than you as you are just starting out. But the important thing is you get started. It can be complicated at first but you will get the hang of it. You will understand the ins and outs of investments and be able to strengthen your funds as you learn more about it.
- It is too risky. There will always be a risk involved when you consider investments and the way to handle it is to understand how much of it you can handle. When you start talking to an investment manager, this is usually one of the first things you need to uncover through a series of questions. It can start from how much you can afford to lose if it ever comes to it or even how long you plan to keep your investments under before taking it out. It only becomes risky when you start being greedy and diving head on first for a promise of high return neglecting that it usually means high risk as well.
- No one will work with me. You might think that just because you are a newbie that no one would want to work with you. That is just a myth and one that you should look over because help is most needed when you are just starting up. You can ask for recommendations from friends and family members on who worked with them when they were just starting out. You can also check with your bank because they usually have investment managers who would be more than willing to help you.
- Big money is needed to start investing. This is one of the biggest investing myths that you might believe in simply because you hear about stocks and other type of investments and popular people dropping hundreds of millions of dollars and earning the same. But you might be surprised because according to CNN.com, consumers can start investing for as little as $5. That is an amount you can set aside from abstaining from your signature coffee for a week. Imagine what one month’s worth can be and you can get started with
- You need to wait for the perfect time. People would also tell you that you need to wait for just the perfect time before you can start to consider making investments. If you keep on waiting for the perfect time, you might not be able to accomplish anything in life. If you wait for things to be perfect, you might never get married, have kids, go to college or even start investing. When thinking of strengthening your financial future, the best time to start is now and the sooner you get on that road, the sooner you get to enjoy its benefits.
How to get started with investing for your future
CNBC.com shared that over 50 million American consumers prefer to stick it out with zero risks and return frame of mind which is usually in the form of cash. This can be a good start but relying on this strategy for the long haul could cause your investments to lose value over the account of inflation. Here are a few things you can do to get started with investing the right way.
- Take a look at your budget. Even before you can start saving and even breaking investing myths, you should first have a clear understanding of how much you have in your budget first to know the amount you can use to invest. You cannot just try to pick a number out of thin air and hope it works for you. You need to sit down and take a look at your budget to determine the amount you can put in investments.
- Make sure you set a goal. When you start making investments, it is ideal to set a goal in mind to be able to track your growth and see if you are making any progress. Otherwise, you might fall into a false sense of security thinking your money is growing when in fact, it might already be losing value. Make sure you have an end goal to aim for to be able to properly measure your financial growth.
- Know if you need help. It is not a sign of weakness to ask for help. In fact, others view it as a sign of strength and wisdom because you know your limitations and need the help of others. This can be family and friends or even a professional financial planner to point you in the right direction. It is better to start off on the right foot rather than trying to wing it and end up losing money along the way.
- Do not stop learning. The digital age has made access to information a lot easier and you need to take advantage of this. There is, of course, the task of weeding out false information but once you find the right ones, they can help you grow and learn. Try to learn as much as you can about investing so you can arm yourself with the proper knowledge and be able to make well-informed financial decisions.
There are a lot of investing myths that you carefully have to investigate because they could do more harm than good. The best approach is to learn as much as you can with investments and if possible, surround yourself with people who knows a thing or two about financial management.