There are many people who simply have not invested before and are unlikely to start. About 52% of Americans never invest. This can have all kinds of obvious negative effects on an individual’s future.
Illness, loss of job, reduction of income, death of a partner, these are all common challenges that people run into as they get older.
Clearly, half of the people in the country aren’t preparing themselves for these eventualities altogether. But just because the other half of our citizens are investing, doesn’t mean that they’re going to be ready.
Most Americans who do invest will have insufficient resources to live a comfortable lifestyle once they are retired. A slim minority of American investors have enough in their portfolio to preserve their current way of life without bringing in income from a career.
These statistics show that too few people are ready for retirement, even if they do retire. So, if investing is the way to avoid this dire situation, why do so few people do it, or learn to do it well?
There are a number of reasons, and none of them should seem unfamiliar.
- Fear of Markets. All American adults have lived through troubled financial times. Even if they came of age in households where money wasn’t a worry, they remember the financial crisis of 2008 and the resulting problems it caused.
And those for whom that crisis is a foggy memory, the recent upset of the Chinese market is enough to jog their memory. This worry about the ups and downs of a fickle market is enough to keep many people out of proper investment at all. What they don’t seem to realize is that drops are a part of the system, and markets have always rebounded higher than they were before a drop.
Many people also don’t realize that there are alternatives to the ETFs and mutual funds that so many people use to get into the stock market. Forex trading, precious metals, real estate: these are all ways ways to become a real investor without risking money on a market they don’t trust.
- No Money to Spare. Many people feel they don’t have enough money to start investing. Problems like debt and hand-to-mouth living can make it difficult to invest meaningfully. But this can be a motivation to better one’s financial situation. Furthermore, there are services that take all the guesswork out of stock market investment, making it a truly easy approach for beginners.
- They Don’t Know How. This may be the biggest deterrent of all. But it’s easily remedied. With so many good books on the market, and endless personal finance blogs out there, learning the basics of investment are just a couple hours of reading away. Most people find that when they learn about investing, they want to try it for themselves. Education tends to get rid of some of the worries and fears that many people carry into investment.
There are other reasons why people don’t try investing. But with so many ways to overcome these fears, and alternatives to the traditional stock market model, investing truly can be for everyone.