They say that to truly start generating passive income and have money for your retirement, you have to get into investing. Unfortunately, investing can be quite confusing and intimidating to those inexperienced in the industry.
If this sounds like you, just know that you’re not alone in this uneasy feeling towards investing.
A survey was recently conducted and found that 70% of Americans between the age of 18 and 39 were aware that they need to make better financial choices and decisions now to become more financially secure in the future but just didn’t know-how.
Out of that 70%, 61% stated that investing in the stock market was scary and intimidating to them.
But the real question is why are so many people afraid to start investing? They know it’s one of the best ways to form passive income to plan for a bright financial future, so what’s the hold-up?
Well, it’s pretty safe to say that because a lot of people don’t know much about investing, they probably assume that the only way to invest is to invest in the stock market, and that’s a myth.
There are several different ways to start investing that people don’t realize, and it doesn’t even involve the stock market. For example, more and more people are consulting with lenders to invest in real estate. And with the value of the dollar on a slow decline, people are also investing in gold.
The bottom line is that people know that investing is important to get started in and the sooner you start investing, the better. The only thing is that despite knowing its importance, people are too scared, uncertain, or too intimidated by it to even give it a fair shot.
The great news is that there are some simple ways to get past those fears so that you can start your journey to investing today, regardless of how much money you have or how much you know about investing.
Take a look at some of the biggest reasons why people are so intimidated by investing.
Top Reasons Why People are Afraid to Start Investing
Afraid of Making the Wrong Investment and Lose Money
Being afraid of making the wrong investment is a perfectly understandable fear to have because we all work hard for our money, and depending on how much you invest, it can be a financially devastating blow to lose money from it.
So how can you tell if an investment opportunity is good or not? Well, there are a few ways to tell, like investing in something that’s already popular or keeping up with emerging markets; oh and you can’t forget about watching the news as well.
But one thing you have to understand about investing is that it is indeed risky, and at some point, you are guaranteed to lose money if you invest in something like the stock market… but remember, the stock market isn’t the only type of investing you can do.
Take real estate for example. Yes, you could lose money in real estate but buying and owning rental properties is a more safe and stable way to earn passive income, and it has nothing to do with stocks… You just have to keep your eyes open to find the right investing opportunities.
Not Knowing Who to Trust With Investing
Everyone is out to get everyone, it seems like, and in the world of investing, scam artists have made a fortune taking innocent people’s money, and sometimes their life savings.
And the truth of the matter is that a lot of the times when novice investors get their start in investing and lose money, it’s not always from malicious people… In many cases, investors lose their money from putting their trust in someone who doesn’t know what they’re doing.
Again, this is still no reason to not start investing. According to investor.gov, simply taking the time out to ask questions, conduct research on various companies, and to know the red flags of investment fraud, you’ll be equipped to weed out individuals who are genuinely there to help you make the best financial decision and who isn’t.
Not Having Enough Money to Invest
This particular reason is probably the most popular reason why people are intimidated to invest.
Now, true enough, certain stocks have a minimum amount you need to have in order to invest in certain companies but there are investment opportunities that don’t require you to have a lot of money. In fact, we’ll look at real estate investing again.
With real estate investing, unless you have thousands on thousands of dollars saved up, you’re not going to have enough money to invest in a rental property, right? Right, and most investors don’t have that kind of money, especially when first starting out. So what do they do? They turn to direct lenders specialized in rental loans.
So, there are indeed investment opportunities that require money upfront but there are also investment opportunities that allow you to use leverage as well… You just have to be able to identify which one is a good investment opportunity for you.