At some point in your life you may start considering investing your money. Hopefully this happens sooner than later, but if not, it’s never too late to get started!
Unfortunately there are plenty of misconceptions, lies and awful opinions. Below is a list of common myths about investing because knowing the difference between reality and myth could be the difference in hitting your investing goals!
It’s Hard To Get Started!
It’s a common myth that getting started in investing is too hard for the average person! In fact, this couldn’t be further from the truth in today’s technological age. Because of the advancement of technology, investing is actually easier than its ever been.
There are all kinds of companies that offer services specifically designed and tailored for beginners. These companies make it easy to start investing with almost no knowledge of stocks, bonds or other forms of investments.
Companies like Acorns, who automatically round up money you spend and invest the change in a managed portfolio and Loyal3 which lets you buy the most popular stocks are great examples of these types of companies.
Also, there has never been more free information on how to get started investing because of the internet! You can find free articles, blogs and books on investing that will take you from a beginner to an investing whiz with just a bit of effort on your part!
You Need a Lot of Money to Make Money!
You need a lot of money in order to get started! This simply isn’t true! The only way to get started is to simply get started. You can invest $100 dollars and start earning returns on that or you can start saving that money in an account and wait for the day you get to $10,000 and earn nothing the entire time you waited.
Start where you are at and you’ll be further today than you will be tomorrow. Even if you can only invest $25 dollars a week, it’s better to start now then continually waiting for the right time!
In fact, once you start investing and saving money it almost becomes a game in which you try to save more so you can invest more. You start second guessing getting that coffee from Starbucks every day!
Investing is Too Risky!
Is there risk to investing? Sure, but personally I believe doing nothing and sitting on cash is even more risky.
Did you know the currency here in the United States isn’t even backed by gold anymore like it use to be? In fact, it hasn’t been for quite some time!
Cash is simply a piece of paper formed by our government that is said to be worth something. Investments at least give you something instead of just owning a piece of paper made from cotton and linen.
Whether it’s physically owning gold, silver or some other commodity vs owning part of a company through stocks you at least own something.
Also, statistically the stock market and other forms of investing have proven time after time that they produce gains if you invest. Why do you think most rich people invest? Because it works!
I’m a big believer that if you want to achieve something someone else has already achieved, look at what they are doing and copy them! Financially secure people invest their money!
It could be in your own business, stocks, commodities, etc. Invest in something.
Heck I even consider enrolling in a class to learn a new skill an investment!
You Need an Investment Professional!
This myth goes hand in hand with the myth that it’s too hard to get started but I felt it deserved a separate section.
Years ago, if you wanted to invest you had to find an investor who could do the work for you, as I said above this is no longer the case.
There have been studies done that show actively managed funds, that is those funds created by investment professionals more time than not fail to beat the average if you would have just invested in an index fund that tracks the top given stocks in that index.
If you simply take a bit of time and learn about investing you’ll be better off than simply relying on an investment professional. It’s worth it!
Investing Comes With High Fees!
There was a time that investing did come with high fees, but with the rise of technology those fees have dropped tremendously.
With traditional stock brokers like TradeKing who only charge $4.99 per trade and new brokers like Loyal3 who don’t charge anything to buy and sell “popular” stocks, it has become increasingly affordable to own your share of companies!
In fact, companies like Loyal3 even let you buy partial stocks meaning you can invest as little as $10 dollars at a time towards companies that may even be trading at a couple hundred dollars per share!
Investing is The Best Way to Get Rich!
While I think investing is great and everyone should be doing it, I should point out that simply investing won’t necessarily make you rich nor is it the best way to become rich!
Sure there have been several investors who have ended up making a killing in the stock market and became millionaires, but I like to think of investing as simply a tool to help you accumulate and keep your wealth!
If you truly want to become rich the best investment you can make is in yourself and starting a business. Entrepreneurship has been associated with wealth time and time again!
While I highly recommend setting aside a portion of your income towards investments like stocks, bond, real estate, etc. I also highly recommend setting aside a portion of your income towards building your own business.
You can either have someone pay you and then sell your time to someone else at a retail price or you can sell your own time at a retail price by owning your own business. It’s your choice!