Learning to invest for the first time is part of the many Millions of people overarching financial plans. Mostly, at the beginning of a new year as part of their new year resolutions or goals.
Along the way, many people end up not investing at all. This is due to different challenges that newbies face in the process.
Most successful investors faced the very same challenges when they were starting out, in spite of that, they manage to swim with the tides.
Below are 5 challenges that first-time investors face.
Messing with your personal finance
Most people are not good with their money, every coin they earn they spend it all. Almost 8 out of 10 working class live paycheck to paycheck.
For a long time, people living this kind of life don’t realize that they need to make a change, they just pretend that they are not in massive trouble.
You can only improve if you start to have honest conversation about money, remove the ego and actually try to learn.
Many personal finances advisers recommend that the basic formula to win at personal finance is to spend less money than you make.
More often than not, it’s just saving enough, having a couple of investments, and having cash on hand to afford the lifestyle you want for yourself and family.
Plaguing yourself with excess Information
We are living in an age where there is so much information being thrown at us.
For instance, typing “HOW TO INVEST” into Google search engine, you will get over 1.95 billion results in less than a second.
When people are overloaded by too much information, in most cases, they tend to pull back from the decision-making process and reduce their thinking efforts.
You may find it difficult to understand an issue and make decisions that may be caused by the presence of too much information.
As an investor, if you want to create wealth, learn to ignore voice and noise around you, learn to stay cool, calm and collect as often as possible.
Stay away from emotional news headlines. Newspaper headlines can tell you about yesterday but remember, your portfolio or investment return is based on tomorrow.
Remember, one cannot become a successful investor listening and following what others say. Not just any kind of wisdom, but the one that makes you feel small.
Not seeking support from those who have done it
Many people are afraid of investing. Or worse, they are stuck with big losses that are as a result of their own mistakes when starting to invest.
There are a lot of new investors who don’t know what to do or even how to go about it before they start investing.
They simply don’t know where to start, if you are on the same hook, you can help yourself and receive support from others as ways of kick starting or improving your investing strategies.
The powerful education is not only at the university.
The knowledge and skills to produce the results you haven’t yet produced is to find someone who has done 10X the things you want to achieve.
There is nothing wrong with free knowledge as long as you are acting on it.
Concentrating on preventing Unknown risks
Before getting into investing, new investors should understand different types of risks that are either hidden or unknown.
Risks are hidden in many situations for investors.
The best way to handle the risks is to have a long-term plan. Basically, an investing plan. This will help in identifying and taking advantage of unexpected events of disruptions.
You can create your investment philosophy as an investor. for example, create your two or more investments baskets and fill them with different Investment products / instruments.
If anything unexpected happens, probably, you got something in one of your two baskets that you’re gonna profit from.
As an investor, your job is not to predict the risks or the future. People who try to predict or guess the future are the enemies of risk management.
Don’t guess what is going to happen, prepare for anything that is going to happen.
Underestimating the power of slow-and-steady progress
This could hold you back especially where you are supposed to make progress and grow your investments, and also grow as an investor.
The key to slow-and-steady progress is to start investing immediately even when you feel like it’s not the right time to invest. Don’t wait for the perfect time or enough money, start small and make progress.
The reality is, you can accomplish a lot and you can get further than you are right now. But comparing yourself to others and thinking where you should have been at this point can be a little bit frustrating.
Keep your eyes on your investments, make progress as you can, at the speed at what you can and you will be getting the results a lot faster.
Almost every investor at some point will have to confront some of these challenges. Those who manage to maintain focus and push through will reap the largest rewards.
Even if you are already in the game of investing, these challenges can help you identify the same struggles in your own journey only in different forms as an investor.
You can start investing right now, no matter how much you know about investing and how much money you have, there is nothing wrong with that.
Your investing goals are unique and special from other investors around you. Checking in with your intuitive knowledge about who you are and what you really desire to achieve as an investor is essential to let go of others opinions.
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