Investment and saving are often used interchangeably, but they have a different meaning. Saving is the amount you put away as your reserves, and investment is about earnings on your savings.
Investing is a complex process, which has diverse avenues or instruments. Typically, investing means making money to beat inflation.
But why do people fear to invest? The reason may be varied - personal beliefs, lack of confidence and knowledge, and purpose.
As the saying goes: to defeat the fear is to face the fear. There is always a first time for everything, and so is with investment.
The following are five tips to conquer your investing fear:
Set Your Life Goals – Personal and investment goals go hand in hand. Set your life goals first after considering your personal and professional ambitions. Your goal should be achievable, and time bound. Once these are figured out, the next steps are easy.
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Set Your Investment Goal – It is vital to plan where you would want to reach financially after some years. Investment goal must be flexible, considering the sudden changes in life and the need to accommodate those changes. Goals should be simple and straightforward, like “I want to have US$1 million after ten years”. The clearer the goal, the better are the chances of achievement.
Goal setting will reduce your investment fear when done sincerely. It will inspire you and make you confident about the future.
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Find Out Avenues - Get help from professionals who have invested their money and have earned well. Learn from them about various types of investments.
Once you have set your financial goal, these financial concepts will start making sense to you.
Start Small and Grow - Often, we bump into obstacles or issues that do not go as planned. Setting a financial goal and working on it in the long term is itself a challenge.
There could be a rise and fall in the market, the political and macroeconomic situation may change, besides other uncertainties.
Hence, start small and learn. Also, keep an eye on your investments to minimize losses. Seasoned investors in the stock markets do not lose patience even under challenging situations. You will need a lot of patience to succeed in your investing goals.
Make A Safety Bet – When you define your investment fear clearly, you will find ways to deal with it. If you fear investing in the stock market because you have never invested in it before, it is not real. But if your fear is about your poor health, then it is real, and you can plan your budget to accommodate the health issues.
Put aside a certain amount as a safety net to address your health needs. Conquer your fear first before planning your investments. Investing is a marathon, and you must adjust it from time-to-time for a rewarding future.