5 lies you need to stop telling yourself about investments. Investing can be an intimidating goal, but it is absolutely necessary. Despite being one of the pillars of wealth building, too many people avoid the stock market because it is unfamiliar to them. Others approach it with too much confidence, which is equally, if not more, negative. Furthermore, we all have prejudices and emotions that make money management very difficult. Often our beliefs about money and money can lead to misconceptions, which hinder our ability to achieve financial success.
So, here are 5 lies you need to stop telling yourself about him investments if you want to build long-term capital.
- I don’t know what I’m doing. You don’t need to be a finance wizard to invest. You just need to know what goals you are investing in, and how much risk you can bear. If your investment knowledge is limited to stocks and bonds, don’t worry. There are a lot of low cost online investment services full of tutorials. And then you are reading this article on the most important Italian site related to finance, investments and markets. Here you will find all the information to be able to invest consciously, starting from contacting an investment advisor, because helping you invest is precisely his job. Always remember that your knowledge is limited to your desire to seek answers.
- I do not have enough money. OK. You may not have enough money to invest if you are maintaining an emergency fund with three, six months of cash. Or if you are paying a lot of high interest rate debt. But if you think you don’t have enough money to invest because your net worth isn’t six or seven digits, and you’re running out of cash, you’re wrong. A few tens of euros are enough to enter the market. The landscape has improved immensely for small investors in the last decade, with the proliferation of ETFs. Their basic costs are really minimal, and can be used to open a PAC already with only 50 euros per month. So no excuses.
Other lies you need to stop telling yourself about investments
- This is not the right time. Be serious: you will never win if you try to enter the market at the right time. Most of the biggest money making opportunities on the stock market come without warning. If you are waiting for the “best” time to invest your money, you are missing out on all the potential growth in the meantime. “The best opportunities to grow your money are always to be on the market.” Ask any investment adviser.
They will all tell you rightly so.
- It is too risky. Investing in the stock market is risky. You are loosening the hold on your money to (hopefully) multiply it. You can’t think it’s not risky. But rest assured. There are ways to reduce overall risk and still yield a return. The things you can control are the level of risk you invest in, the commissions you pay, the level of diversification you assume. You can invest more successfully when you align the risk level of your investment with the time horizon for which you need to save. Your investment advisor knows what to do.
- I don’t want to settle for an average return. If you are constantly looking for the latest miraculous suggestion of stocks that promise to make you wealthy, you will likely end up disappointed. Or you will spend too much time tinkering with your investments, and you will get little. But when it comes to building long-term wealth through investment, the average is exactly what you should be aiming for. You should simply adapt to the market, because in the long run the market yield typically hovers around 8%. And 8% is fantastic, 8% is amazing. 8% allow you to double your money every 10 years. And then, simply invest. The simpler and leaner your investments are, the better. They don’t have to be fantastic. They also don’t have to be in the newspapers. They don’t have to make headlines. Your investments just have to be really simple. And they have to make it as average as the market, as you have just seen.