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Can You Afford Not To Look After Your Personal Finances?
By: Mika Hamilton
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 do—as 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 you—saving 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 words—in 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 “Wall Street”,
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.
About the Author:
Mika Hamilton is editor and founder of the Global Investment Institute. http://www.beginners.global-investment-institute.com
An organisation setup to aid people in the pursuit of a better lifestyle through
investing and wealth planning. |
