Thursday Trim the Trash Time: August 10, 2017
Why People don’t get Started Investing
Welcome back to Thursday Trim the Trash Time, my weekly discussion on things you can eliminate from your budget. We are in Investment at Budget Boss, so this week is about investing and how it can help you achieve your goals. I have discussed how to find your investment personality and then what you can invest in. I believe the reasons for saving and investing your money are straightforward but that begs the question: “Why do many people not save and invest their money?” I look at saving and investing like having a healthy lifestyle. Saving your money is like going to the gym. You don’t want to do it but you know it’s best for you. Investing is sort of like eating healthy; it complements your savings program and makes for a complete package. You ultimately have to do both to accomplish your goals. In this post, I will discuss 3 reasons people don’t invest their money and solutions to those problems.
They think they don’t have any money
This is a classic excuse for many. I have met many, many people in my lifetime. One thing I have noticed is that the people, who are actually poor, rarely mention to others how poor they are. The people I have met who complain the most about being broke often make decent money but just spend it poorly. They often don’t even know what they make or where it goes when they make it. What I have found very interesting is that the people I have met that are actually broke seem to want the most help investing. They seem to be far more interested in saving for the future and getting on track whereas the people with bad cash flow seem to make up excuses or delay.
Solution
The best tool people can have to fight this excuse is a budget. Having a dedicated budget shows you exactly where your money is going and what you are doing with it. A budget sometimes gives people a reality check and the well-needed clarity in their financial picture. If you have a dedicated budget and still can’t seem to find enough money to save and invest then it’s simple, you don’t make enough money.
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They are scared and/or confused
This reason for not investing is far more legit than the first. People tend to shy away from things that confuse them. Even more troubling to would be investors is if the thought of investing scares them. The old adage holds true: “Scared money don’t make money.” You definitely shouldn’t be scared when it comes to saving and investing your money. Having some fear is natural and so is being confused. It is not, however, a good enough excuse to not save and invest.
Solution
Get educated on budgeting, saving and investing. (budgetboss.ca might be a good start). Seek out friends, family, and experts to help you with your learning. There is also something called the internet that has pretty much anything you want to learn about on it. Not knowing is not a good enough excuse as the stakes are too high. There are plenty of good books, pages, videos and people out there that can help you on your financial journey.
They don’t realize the importance of saving and investing
Many people don’t realize the importance and urgency of saving and investing their money. People will often procrastinate and put things off, sometimes till it’s too late. What seems to be more important to these people is today and living in the now. If you read any of my posts during retirement week at Budget Boss I mentioned how the government does not give you much money for your retirement. I also spoke about the decline of employer sponsored pension plans. Inflation is also very real and will eat away at your hard earned cash. Despite these facts, personal savings levels are historically low and personal debt levels are historically high. The importance of personal financial planning is at an all-time high, so what can be done?
Solution
This one comes down to education as well. I think the best way to see how important it is to save and invest is to look for real life examples. Many of us have family members that struggle to stay afloat in retirement. Even more of us have friends that are barely getting by. To know how and why to save solves this problem. You can go down to your local senior center or Kiwanis center to see how difficult retiring poor can be. Decisions made earlier in life greatly affect the quality of life later. This isn’t meant to scare you, just inform you.
The important thing to understand is that there will always be more reasons in your life to not save your money than to do it. Having fun, tough circumstances, a crummy job, and even a bad mood can derail you. The reasons to save and invest are few in number, but far outweigh any excuse you can come up with. Being debt free, a child’s education, buying a home and a stable retirement are all worthy causes. They far outweigh new cars, vacations, and expensive dinners. The question then becomes about priorities. What is more important to you? I’m sure if asked that question by a financial advisor your answer would be simple. So what’s the delay, let’s get started!
Thanks for reading my post today and don’t forget to tune in tomorrow for my final reflection on Investment Week here at Budget Boss. I will also be going live on Facebook to recap this week’s events so you won’t want to miss that. Have a great day friends!
“Investing is for wealth preservation, not wealth creation, so first, you have to make wealth.” – James Altucher
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at budgetboss.ca