If you had asked me 5 years ago, “do you invest in the stock market”, I would have looked at you pretty blankly. The only investing I had ever heard of was buy-to-let, and I had no money for that kind of thing! I had heard about the stock market, but I thought it was for snowy haired old men or coked-up “wolf of wall street” type characters! (I know that they are both massive stereotypes, but this was my thinking and I’m being honest!!).
It was only when I came across a group of people who were investing based on teaching by a woman in South Africa called Ann Wilson, that I started to pay attention. Pretty quickly, my pre-assumptions were blown away, and I had set up my first investment account.
It’s safe to say that I have been hooked ever since!
So here are the myths I used to think, and why I now know I got it wrong:
“I think it’ll be too hard to learn”
Learning ANY new skill is hard to do, whether it’s throwing accurate darts, doing an appendicectomy, or driving a car. We are ALL terrible at the beginning. The key is to find a source of learning that you enjoy doing and stay consistent and persistent. I won’t pretend that I know everything about the stock market, because I don’t, but I know enough to get my investments off the ground. I don’t need to know how my car works to be able to drive it, I just need to know some basic elements to do this. It’s the same with investing. Learn the basics, and you’re on your way! (You don’t even need to be good at maths!)
“I think I’ll lose all my money”
Yes, stock markets do go down as well as up, but losing money depends on HOW you are investing in the stock market. Putting everything you own on a few companies “just because you like them” is gambling. It’s like putting all your money on red at the roulette table. The company only has to have a downturn in sales, and the value of the stock plummets. There are people in London who are much more attuned to the ins and outs of how companies are performing and can trade stocks on this basis.
For me though, I’m not savvy enough to do this (or have the time!!), so I chose to invest in lots of companies within a fund called an index tracker. This way, when one company doesn’t do so well, another company “props” it up and I get an average of both. It also means my money will not go to “zero”. Yes it can still dip in value temporarily, but the cure for this is time. Wait long enough, and it will recover!
“I don’t have any money to invest”
This was a big one for me. I currently have A LOT of outgoings, so saving and investing was not on my agenda. Then I read “Rich Dad, Poor Dad” and read about the concept of “pay yourself first”. Coupled with learning how to invest, it suddenly clicked for me that I HAD to find a way to start investing. So I found a company that allowed me to invest from £25 per month and I have been adding to it ever since. I still have a lot of outgoings, but these are dropping off steadily one by one as contracts end and I reorganise my finances. It’s not a quick system, but it is certainly motivating me to do it as quick as possible so I can invest more.
“I can’t invest because I’m in debt!”
When I first started learning, I was so disappointed to read books that said “don’t invest until all debt is paid”. With the amount of debt I was in, this was soul destroying news. I would be in my 40s by the time I could start investing. Then I read about compound interest, and how time was a crucial factor to this being successful. Warren Buffett says that his fortune really took off in his 50s because of the way compound interest worked for him.
After finding out I could invest from £25, I decided to invest WHILE paying off debt so that I could take advantage of compounding as soon as possible. Obviously if I had debt that was spiraling out of control (like a dreaded pay-day loan), then I would have got rid of this first. Also, if my debt was causing me to not be able to eat or pay the electricity bill, then I wouldn’t have started either. It’s about balance and priority, but I think a lot of people should be able to find £25 per month to start (that’s lunch every day at £5 for 1 week!).
“People like me don’t invest!”
I honestly had it in my head that investors were boring, old and greedy, and had thoughts of the bankers in London (or Gringotts!). I didn’t realise that there are plenty of people like me out there investing. Not necessarily to becoming millionaires (although some people are doing this), but to secure a decent retirement for themselves and to help their children get onto the property ladder or into university for example. Ordinary people doing ordinary things all due to knowing how to invest.
So I hope this has gone some way to show you that my negative thinking had been holding me back for years. Investing is an essential part of our overall money management, and I really believe more of us need to be in the game.
If you want to learn more, I will be holding a FREE masterclass soon all about it. If you want to be on the list to hear first when seats are available, then fill out this form, and I’ll be in touch within the next few weeks.
Until next time,
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