offered an answer in his2009 article: the third stage is…investing.
This post originally appeared onGet Rich Slowly.
Why Investing Is Important
Why invest?
1 and work their way to No.
It’s what J.D.
did, and he’s been at No.
2 (gaining his income from investments) for a while now.
2, whether we articulate it as such or not.
Despite a few mishaps, that’s where I am too (albeit not in J.D.
2 do you obtain the freedom to pursue your dreams to the max.
For some reason, many people still haven’t made peace with the notion thatinvesting isn’t optional.
There was a time when I hadn’t, either.
Someone asked me recently why I took so long to get started with investing.
After all, I had a financial education, and I should certainly have known better.
The number one reason I heard came down tofear.
I asked my friend if she was going to invest the windfall.
To my surprise, she wasn’t even considering investing it.
It turns out that she was afraid she’d lose it.
Fear was the barrier stopping her from reaping the benefit millions get every day.
But should she be afraid?
Should You Be Afraid?
So why is that the case?
You have learned how to drive and how to work.
Driving is straightforward; work, less so.
Learning successful work skills takes a long time, and we all make mistakes along the way.
Some are costly, but others are just fodder for a good after-dinner laugh.
However, many don’t invest because of those very same reasons we heard someone lost money somehow.
How do you overcome the fear of losing all your money?
The list of alternative investment opportunities is long.
Bonds can be safe too, if you hold them till maturity.
The chances of losing your money in a CD are pretty remote.
What’s that I hear?
The return on those investments is lousy?
You said you wanted asafeinvestment.
You didn’t say you wanted an investment with a high return.
Alaska is huge and doesn’t have many roads.
Alaska is notorious for some pretty bad weather … not a pilot’s friend.
The same is true of investments.
There are safe investments and there are high-yielding investments, but there are no safe, high-yielding investments.
The point is: If safety is your only concern, you have viable alternatives to choose from.
Learn the Basics
Your job has risks, and driving has risks.
You reduce those risks by learning.
If a particular stretch of roads attracts cops, you learn to watch your speed on that stretch.
Likewise, you’re free to reduce your investing risk significantly by understanding investing fundamentals.
The good thing about learning about investing is you might do itbeforeyou actually have dime one to invest.
With the Internet, knowledge these days is freely available.
Fear of the unknown is understandable, even rational.
But maintaining fear through maintaining ignorance, that’s something different.
Find out what makes the difference between success and failure.
We’ve all heard stories about a supposed sure thing, from horse racing to stock investing.
Someone whispered to Debbie to buy Chipotle stock and, oh my, she’s a millionaire now.
Tips are especially prevalent with penny stocks.
Can we just say it, though?
Tips are good for restaurant servers, but not for investing.
(You don’t want to be a novice when you have real money to lose.)
So why use the fear of losing money as the reason to not invest?
Especially when there are lots of free knowledge resources to overcome those risks.
About a year ago, Lisa Aberle put togethera great resource listingto get you started.
Photos byWolfgang LonienandMaxime Mc Duff.
