Why people put off investing #2

For part 1 of Why people put off investing

Following up on the previous post, the second reason why people put off investing is because of the belief that

#2 that they do not have enough money to make significant impact to their financial status

This is especially common with the younger crowd who are dealing with more immediate financial needs & wants.

Is there truth to this? Yes.
Is there another side to the story? Most definitely too – because while you may not have enough money, you have enough time.
So let’s first illustrate this the usual boring way and imagine that you are 25 and that you set aside $500 a month for retirement at 65. At 7%p.a return, you would have a nest egg of $1.3million then – is this a significant amount considering inflation? maybe not. but thing is, you would still be better off than not doing anything at all.
Despite this, many of the people I meet also go with the mentality they can put off investing now and make up for it by investing more in the future, when their income increases. I know of multiple reasons why that may not pan out as successfully but what I really want to share is this:

The impact of investing early goes beyond just wealth accumulation. When we start investing early, we are also accumulating experience early- which is what will make all the difference in the future. The significant impact.

Starting early allows you the opportunity to experience the ups and downs of the stock market – enough for you to understand and learn what to do and what not to do. And to put it really bluntly, the whole experience would be easier to stomach now than in the future, precisely because the invested amount would be much smaller. The emotional attachment to an investment of $20k would (should) be much lesser than an investment of $500k.
And as it is, the earlier you experience it, the more chances for you to do it over again – because fact is, there is a limited number of market cycles that we get to participate in, in each of our lifetime.

as always, the next time you think you do not have enough to invest to make a significant impact to your financial status, think again and think beyond money.

while writing this, it also got me thinking about the other conversations that I had with a couple of friends… about how so many of us go about life with the internal conversation that we do not have enough – not enough time, not enough money. or.. believing that we do not have enough to give, to love and to lose. maybe it’s time we have a paradigm shift. hm