If you haven’t yet started investing for one reason or another, you’re not alone. There are some misconceptions about investing that paralyze some beginning investors in fear and convince all too many that they’re not cut out for investing — at least not right now. But, despite these investing barriers, you absolutely can (and should!) get started investing your money to save and grow for your financial future.
5 Investing Barriers
Let’s unpack five of the most common investing barriers — and how to break through them.
1. I don’t understand investing enough to get started.
The investing world can be intimidating — and you’re not alone in feeling that way. In fact, research suggests that about 61 percent of adults admit to finding investing “scary or intimidating.” Most millennials feel financially behind and grapple with anxiety over their financial futures, research reports. Simply, studies show that they just don’t feel knowledgeable. Women are adversely affected, as well. Some research indicates that women, more than men, cite a lack of investing knowledge as a key reason for putting off investing. They’re far less confident in their financial futures and, yet, don’t invest nearly as much — a regret, studies suggest, women tend to have.
2. I don’t have enough money to invest.
You don’t need a six-figure salary or an impressive savings to start investing. You can start investing today, even if you only have minimal income to spare. All you need is an investment plan and a commitment to it to start seeing results.
While some securities, funds and investment opportunities do require a minimum investment amount (the smallest dollar or share quantity you can purchase when investing), there are plenty of options to invest with as little as a few bucks. For example, some funds will allow you to deposit as little as $5, $10 or $100. The more money you invest upfront, the more potential you have to grow your funds. But you can always start small and work your way up, too.
3. I’m more concerned with short-term financial goals.
Maybe you’re hoping to purchase a home in the next few years or you’re in over your head in student loan debt. Short-term financial goals feel more pertinent, and that’s fair. But turning a blind eye to your long-term financial future and putting off investing for “sometime down the line is a mistake. For one, you can still set a chunk of your extra income aside in a savings account and use the bulk of it to pay off any debt. Again, you don’t need a lot of money to start investing.
Moreover, the longer you invest your money, the longer you have to compound your investment (grow it by reinvesting your earnings). Likewise, the younger you are, the more years of earning you have ahead of you, and the more time your funds have to recover from any market dips. This means you can stomach more risk than you would in your later years and invest in a portfolio that’s subject to more volatility but has the potential to produce even bigger gains.
Don’t believe us? More than three-quarters of Americans regret not investing earlier, according to a survey. You don’t want to be one of them.
4. I don’t trust the market.
The market changes — conditions swing up and down and, for some highly risk-averse investors especially, that instability can be hugely anxiety-inducing. The fact of the matter is that the market will hit lows, but it’ll also pick up again. And some securities or asset classes will outperform others at various times throughout the economic cycle. That wave can take you on an emotional journey from caution to confidence, optimism to greed, denial to fear, and panic to caution — only for this cycle to restart all over again. It makes sense, then, to be untrusting.
But, too often, investors worry about the short-term ramifications of their investments instead of staying focused on bigger-picture investment goals. Ultimately, we invest to save and grow our money for our financial futures — and it’s just that (your future) that you should keep in mind. If fickle market conditions and high-risk strategies lose you sleep at night, you can choose to invest more conservatively than your aggressive peers.
5. I don’t have the time to manage my investments.
Who has time to research the market in between working over-eight-hour days — let alone spending over 200 hours commuting to work each year? After all, American families only get about 37 minutes per day of quality time together, and it’s safe to say that most don’t want to spend it studying up on the stock market.
One solution is using a financial advisor. But, contrary to popular belief, you don’t actually need a financial advisor to do your investing for you. Sure, a financial advisor can assist you in making informed investment decisions and help hold you accountable in sticking to your investment plan. But, today, you can get simpler (and much more affordable) investment support in your pocket.
For a more hands-off approach, there are robo-advisors that are available that don’t cost much at all. The biggest downside with these robos is that it lacks product differentiation, as 87% of all assets in the ETF market are managed by five issuers.
This is a big reason why we decided to develop Q Invest, an AI-driven investment app that not only structures a top-performing portfolio tailored to your investment goals, but it also manages it for you. We use advanced algorithms to automatically adapt your portfolio to changing market conditions so you don’t have to worry about keeping abreast of them yourself — though you can still have peace of mind with full transparency. In other words: Managing your investments takes no time at all.
The bottom line
The reality is everyone starts somewhere, even despite these common investing barriers. And with the tools out there today, you really don’t need to be a seasoned Wall Street veteran to get started. So what are you waiting for?