Investing is something that people are usually afraid to do because to them it is some sort of gambling and they’d rather not have a lot that to literally lose some that they may regret in the long run. Turns out that there are tons of myths and lies that people usually believe in when it comes to investing, and there are even some that make the biggest mistakes.
Based on a recent poll, it was revealed that there are now only 54 percent of Americans who are investing in the stock market. That is a major downfall from the 62 percent from 10 years ago. When people talk about it, one of the most common things that being pointed at is the fact that investing is just way too risky.
This may be a fact but what most people don’t realize is that even if it can be risky, the stocks don’t ever stay down. That’s one of the most important parts that are usually stopping people from taking risks, what they don’t realize is that in the long run, they could earn so much more than they will lose.
For instance, you have invested $100 in the S&P 500 back in 1928, no matter how many times there has been a crisis, you would still be able to let it grow and end up having about half a million dollars this year because of the average annual rate of return that is almost 10 percent.
Another worry that people usually have is that they will definitely lose all their money, which may be a lie since the said investment is something they know nothing about.
Financial experts believe that investing may only lead to you losing all your money is when you invest all of it at once on something that you are clueless about. This leads to another excuse from people who don’t want to invest, and that is because most people believe that investing is something that is so complicated.
Experts say that people find it very difficult to get into investing because they feel intimidated by it since they don’t know much. Some people even think that the people in Wall Street speak a different language, but the truth is that you don’t necessarily need to be a financial analyst in order to invest.
Mistakes On Investing
People may have their own reasons when it comes to investing or not investing, but then there are also those who make mistakes and decides to stop instead of learning from them before moving forward. It turns out that even some of the most successful people made major investment mistakes back in the day.
Just like one of the richest men alive, Warren Buffet, who now has about 75 billion under his name. In an interview with Buffet a couple of years ago, he admitted that when he invested on his current company, Berkshire Hathaway, it cost him $200 million which is not something he was very proud of. Buffet even said that he considers it as one of the worst investments he has ever made, but he obviously didn’t give up on it since he has been the company’s CEO for more than fifty years now.
Experts believe that one of the biggest mistakes new investors make is usually with the fact that they don’t have a plan. Keep in mind that it is best to spend so much time planning your financial future than your holiday vacation. What you can do is to create a plan that can be based on the mathematical expectancy so that you are investing and not unintentionally gambling.
Take time to study what you are getting yourself into before you actually make a move. Gamblers usually just put their money on the bet in the hopes that they will win, so that is something that you wouldn’t want to do. By simply being aware of what is going on with the stock market and how everything works, can totally change your views on investing. That is why most people believe that those who don’t know how to take such intelligent risks, can’t exactly get to where they want to be. That same goes to people who want to get rich.