How to Stop Making These 4 Excuses for Not Investing Right Now
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Investing is one of those things we all know we should do but for a variety of
reasons excuses, don’t. However, it’s common to hear excuses for not investing and why it’s ok not to start as soon as possible. Numerous reports indicate a majority of Americans have nothing invested in the stock market. In fact, there are more people who own cats than who invest in the stock market.
With more older Americans working well into their retirement years than ever, it’s critical to understand why you need to start investing now if you aren’t already. The reality is that if you invest sufficiently when you’re younger, you’ll likely be able to enjoy the kind of retirement you want, when you want it.
Excuses are what stop us from getting started with investing. Sometimes the excuses seem legitimate and other times they suck. Nevertheless, an excuse is an excuse and it can hold you back from building your nest egg now and can leave you regretting your decision in the future.
Here are four common excuses that can hold you back from investing along with how to push past them and start investing now.
excuse #1 – I Don’t Have Enough Money to start investing
Feeling like you don’t have enough money is a very common excuse for not investing. Having a significant amount of money to invest with is nice, but it’s very simple to start investing in the stock market with little money.
You can start investing with as little as $1,000, $500, or less. Here are some great ways to start investing with $500 or less that will help you grow your money.
Some automatic investing apps, like Stash, will also let you invest spare change so you can open up an account with just a $1 – $5 contribution.
Focus on lowering your expenses and increasing your income to free up more money to invest. When you make extra money or receive payments, consider investing the extra cash instead of spending it mindlessly.
Compare some of the best online robo-advisors and determine your budget and investing goals. Betterment, for example, lets you start investing with as little as you want and they even manage the investments for you.
If you have a 401(k) plan through your employer, you can contribute just one percent of your gross income. That money will be taken out before you even see your paycheck so it’s an easy way to get rid of this excuse.
Excuse #2 – I’ll start investing Later
Procrastination is one of the biggest excuses that can hold you back from investing. Before I convince you to push past this excuse, let’s figure out why you’re procrastinating in the first place.
Most people procrastinate either because they run out of time or simply just don’t want to do whatever the task is and would rather push it off for as long as possible. Your reasoning could be a combination of both of these things.
If you’re procrastinating when it comes to investing, you could just not have it at the top of your priority list. It’s important to realize that investing is often a long-term process and it pays off (literally) to get started as early as you can – that’s why it’s so important to start investing in your 20s if you’re able.
Thanks to compound interest, if you start investing now, you won’t have to save nearly as much as the people who start years after you and your money will still grow just as much if not more. Plus, you have no idea what the future will hold and you don’t want to look back and wish you would have just gotten started.
excuse #3 – investing is too risky
Risk is unavoidable with investing and many use it an excuse to not be in the stock market. Many see the potential for loss and hold back out of fear. It makes sense as no one wants to lose money.
While it’s inevitable you will lose money when investing, it’s important to look at the overall picture. Historically for the past 100 years, the market has always bounced back and improved. The average return since the turn of the century is around nine percent.
People who kept their money in the market have always ended up with a portfolio that recovered from the losses. When done wisely, investing is not like gambling at all.
There is risk in everything you do whether it involves driving your car to work or attending a football game. The difference with investing is that the reward can often greatly outweigh any risk or short-term losses.
excuse #4 – I Don’t Know how to Start investing
Have you been putting off investing because you honestly have no idea about how to start investing in the stock market? This used to be my excuse. I was embarrassed because I wanted to invest but didn’t know the first thing about how to get the ball rolling.
The first step is to admit that you have no idea what to do. The next step is to take action and figure it out. You should read our posts about how to start investing, read books, take advantage of the resources available through your 401(k) and use the free tools available through your online broker.
Betterment is one of my favorite brokerage options because they invest on your behalf and manage your portfolio based on your goals and preferences. All you have to do is set up automatic transfers.
Wealthsimple is similar to Betterment, allowing you to start investing with as little as you can afford and managing your investments for you.
If you prefer more of a DIY approach, Ally Invest has no minimum balance requirement and has many free tools to help you manage your investments.
Identify Your Excuses for not investing, Then Crush Them
If you’ve been putting off investing, figure out why. It’s likely due to one of the excuses below:
- I don’t need to worry about retirement because I like my job and plan on working forever
- There are too many fees to investing
- I’d rather buy more stuff now
The truth is, there’s a solid path around all these excuses so you can start investing in the stock market and secure your financial future. Investing is one of the most important things you can do for your finances, which is why I believe everyone should do it.
Nine times out of 10, you’ll end up using or needing the money in the future and if you don’t, you can leave a nest egg for loved ones or for the charities and causes you care about. While investing is for you, it also helps increase your net worth and leads you closer to financial independence so you can feel more confident with donating and making charitable contributions if giving back really interests you.
You can’t help others without helping yourself first and investing can create an all-around win-win solution.
Have you ever used any of these excuses for not investing, or currently dealing with one of them? When did you start investing in the stock market? What do you think is the top reason so many choose not to start investing?