Let’s face it, we all have regrets in life. From an ill-advised hairstyle (bangs anyone?) to staying at home instead of attending what turned out to be the party of the year…
Some regrets are trivial and quickly forgotten but others not so much. When it comes to money, one regret pops up more than any other amongst women: not investing enough and/or sooner and not working on growing your wealth.
In fact, more than 41% of women recently surveyed by Merrill Lynch said they wished they had invested more of their money.
As women, we are less likely to invest in the stock market than men. Unfortunately, that can make it far more difficult (if not impossible) for us to reach our long-term goals.
We come up with excuses that prevent us from putting money into the stock market.
Yet, they are one of the few investing methods that actually grow our money.
Sure you could invest in bonds or put your money in a savings account to reduce the risk… but those types of investment vehicles don’t have the earnings potential of the stock market.
Frankly, after factoring in taxes and inflation, you’re likely still at a loss with bonds or savings accounts. You need stocks to (at the very least) maintain the value of your money over time.
Are you letting these 4 things stop you from growing your wealth?
Excuse NO 1 – I’m scared of losing money
All though the market does go through periods of recession, in the long run, you’re not going to lose.
Why is that? Because the stock market has never lost money over a 10-year period.
As long as you’re investing money that can stay in the market for longer periods of time, it will ride out recessions and grow over time.
Most investors have a tendency to be hyper-vigilant to any and all potential downward trends on the market. Yet, for some reason when we own real estate and the market dips, we are far more likely to ride it out.
Part of the problem is that we can obsess over even the smallest changes. Since you can track market movements every minute of each day we are quickly scared off by dips. Comparatively, property assessments aren’t just a quick click away so we can’t track them as obsessively. In a way, that keeps us from becoming our worst enemies.
Regardless, we tend to be more emotional (irrational?) when it comes to the stock market.
Excuse NO 2 – I don’t know how to pick stocks
Start small and educate yourself. Here’s a great post with 5 simple steps that show you exactly how to pick the best investments and stocks to invest in.
If stocks aren’t your jam, invest in index funds. They’re a great way to diversify your portfolio with basically no work or research.
What exactly is an index fund again? If you think of the market as made up of thousands of companies, an index is a segment of the market.
Let’s put it into perspective.
You want to start wearing lipstick so you decide to go to Sephora (I might be biased…). Since you don’t ever wear lipstick, you’re not sure what shade works for you. So, you decide to buy a lipstick pack of 5 which includes multiple shades.
Think of the lipstick as the market (it includes a ton of different shades). One specific lipstick shade is like a company listed on the market. The 5 pack you bought is the index fund.
It doesn’t include all the lipstick shades that exist but it does have several shades in it. That variety pack gives you diversity. If one of the shades in there sucks you still have 4 other shades to fall back on.
An index fund can be thought to work in the same way. If one stock tanks, the impact on your overall portfolio is minimal.
Excuse NO 3 – I don’t have enough money to invest
There’s no such thing as not having enough money. You can start investing with just about any amount. Some brokerage firms have $1,000+ minimums but others don’t have any. Find out how you can start investing today with less than $100 and ZERO overwhelm.
The beauty of compounding interest is that even small amounts contributed regularly over time can add up to significant growth.
If you don’t think you’ve got enough, think of it this way… starting out small might just help you build up the confidence to invest more. It’s kind of like a diet. If you can get your foot through the door by managing not to eat a cookie today, you’re off to a good start.
Take a look at the chart below to see just how much your money can grow on the stock market compared to other ‘safer’ investment vehicles.
Chart assumptions: the initial amount invested is $1,000. S&P 500 return is based on a 7% annual average return. The savings account interest rate is assumed to be 1%. 10-year t-bill average return at 3%.
Basically, your money would almost double on an index fund (in this case the S&P 500) but only give you a few hundred bucks with bonds and not even $100 in a savings account.
Not only does it illustrate the beauty of compounding interest in growing your money but it also clearly shows how the stock market blows other ‘traditional’ investment vehicles out of the water.
Excuse NO 4 – It’s too much work
Honestly, it’s a lot easier than people think. Especially if you’re starting with index funds which take virtually no effort. All you have to do is:
- Sign up for a brokerage account
- Set up automatic recurring deposits to your investment account
- Forget about it (basically)
Sitting on the sidelines isn’t the place for you.
You’re shooting yourself in the foot by not growing your wealth now.
Don’t delay, don’t play catch up!
You’ve got this!
Join me on my quest to empower you to save and invest like a pro! Let’s talk about everything.
Here are a few resources to help you get started on growing your wealth:
- A simple step by step guide to learn how to start investing with less than $100 and ZERO overwhelm
- checkout the Freedom Framework program where I teach you EVERYTHING you need to confidently start investing (you’ll know how to read financial statements, screen stocks, minimize your taxes, pick winning stocks and much much more).
- 5 Simple steps to easily evaluate and improve your financial health
What steps are you taking to start growing your wealth?