Some people always find an excuse to procrastinate their investing. Even though they keep saying they don’t want to waste time and earning opportunities by leaving money in the bank, they do nothing to double it. If you are one of them and trying to combat your procrastination tendencies when it comes to investing, this article can help.
“It’s too early to invest”
There is a sea of people who think so, especially the younger generation. The typical thinking process is: “We are too young to invest because we have just graduated or started a new job,” or “we can start investing later; there are so many other things to focus on now,” or “life is long, and investing opportunities are many, we don’t need to rush.”
How to overcome it?
People think so only when they don’t know the power of “compound interest.” Compounding is essentially an act of “adding interest on interest.” The amount of money you invest will generate earnings from both the initial principal amount and the accrued earnings from preceding compounding periods. Eventually, compounding helps grow your wealth over time.
For example, both Jason and Kevin are of the same age. When Kevin was 30 years old, he invested $50,000 in an investment opportunity, which avails a return rate of 6% p.a. (compounded annually.) By the time Kevin reaches the age of 45, the initial investment would grow to $107,000. On the other hand, Jason started the investments at the age of 40 years with the same amount of money ($50,000) and rate of returns (6% p.a.). When Jason turned 45, he would only earn $66,911 thousand.
Now, let’s do some math for yourself. Compare the amount of money you can earn when investing now with the earnings starting in 10 years. The loss of potential profits may incentivize you to start now.
A deep fear of losing money
One of the main reasons we put off investing is that we’re afraid of losing money, especially when we have been working too hard to have it. This is a cognitive bias in which we tend to prefer avoiding losses. Thinking about having nothing left to make you soon give up on the idea of investing, even if it means wasting potential gains.
That is normal for so many people because of the psychological pain we feel when losing 10,000USD, for instance, is more powerful than the pleasure of gaining the same.
How to overcome it?
A small tip in shifting your mindset may help. Try reframing your thoughts about investing from “I’m afraid of losing money” to “Here’s how much I might lose out on if I don’t invest.” This may create a different point of view wherever you think about investing.
To gradually defeat the fear, you can try making small, safe investments that are easy to accomplish and have few negative consequences. Some typical ones are Bank accounts, term deposits, asset renting… Any investment has some risk. However, if you put money into the low-risk investment, you’ll almost always get back what you put in – usually more.
Have no knowledge about investing
Some people think that investing is just the gameplay of seasoned investors; some believe that we need to know the market in and out to start our investing journey. This is true. Starting investing without knowing anything about it is the same as throwing your money to nothingness. Before starting, you must research and equip yourself with enough investment knowledge.
How to overcome it?
The good news is that you will never have to do it on your own. Investment experts can consult you on a proper portfolio to reach your target. You can find them by your networking. Or you can come to a credible investment company that can offer you a trustable and safe investment package or has an advisor team.
“I don’t have enough money”
This is one of the most common reasons to procrastinate investing. Many people do not plan their budget and end up with no money at the end of the month.
How to overcome it?
To avoid this, one should have a saving plan and strictly follow it. The 50/20/30 budget rule should be considered in this situation. According to the rule, we should spend 50% of our income on our daily needs and obligation. The other 50% should be split into 20% and 30%, 20% for investing, and 30% for unexpected spending.
Or you can start with an investment type that does not require much money. Remember that you don’t need to start your investment journey with a fortune. As long as you have a financial plan, you can reach your target step by step.
Your emotions make you put off investing
We sometimes put off carrying out a task because we have strong negative emotions associated with that task. Those emotions may come from some bad experiences in the past. It makes you put off investing because you feel anxiety, fear, or doubt about money-related matters.
If you’ve identified that your emotions are holding you back from starting investing, don’t beat yourself up over it. You are on the right track since acknowledging your negative emotions is the first step towards overcoming your self-sabotaging tendencies.
How to get over it?
You can keep yourself accountable for starting and continuing your investing. Set small goals, enlist the help of a friend, or automate your investments, so you don’t have to think about it is some method you can try. And if you always delay funding your investment portfolio, set up a standing instruction from your bank account in your portfolio.
Or you can go for a passive income method such as putting money on a long-term and safe investment deal and waiting for the annual interest. You usually don’t need to make investment decisions but still gain profit.
Now that you have a better understanding of why you hesitate to invest and how to overcome it, it’s time to start investing. Remember that a reasonable margin requires lots of effort. If you are still unsure about what you are investing in, always start with a low-risk investment.
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