How many times have you heard someone say this or told yourself any of the following:
“I can’t afford to lose any money
I don’t understand how the market works
I don’t have enough money to invest
I don’t have time to track my investments
Investing is risky “
Probably too many to remember. Whilst these types of statements naturally deter people from investing, it has the ill effect of discouraging people from saving as well.
Investing can be intimidating for beginners and that’s why they put it off. The above reasons are all good reasons not to invest (If you have no clue, stay out the market). But the above reasons are not good reasons to delay saving. By having a ‘fear’ of investing, people inadvertently put off saving. (Read my articles on how to invest).
Now that you understood the underlying reasons as to why many people don’t save, it all makes sense.
So what is the solution?
Like every other problem in the world, it’s easier if you break it into smaller parts.
The simple solution is just to start saving. Don’t worry about investing, just start saving. Read my articles on how to save. If a person doesn’t have any savings, they would hesitate about investing.
Then when you have built up some money in your savings account, it is far easier to convince them to invest with low risk methods.
The biggest mistake most people make is that they think they have to start investing with bucket loads of money. They suffer from the “not enough” mentality; namely that if they aren’t making £5,000 or £10,000 investments at a time, they will never become rich. What these people don’t realize is that entire armies are built one soldier at a time; so too is their financial arsenal.
Investing money is the ultimate goal. By investing money, you let your money work for you instead of you working for money. Investing can lead you to having an early retirement and to a more financially free life. So take baby steps first and start saving.
Savings should come first ALWAYS.. You can Invest those savings later.