A lot of people refrain from investing because they have too many misconceptions about how investing works and what it takes to get started. In this article, you will discover five misconceptions about investing that will hopefully shatter any doubt you may have about making your first investment.
Thanks to the internet, it has never been easier to start investing than today.
1. It’s difficult to get started
Probably the most common misconception about investing is that it is difficult to get started. That could not be more untrue. Today, there are several investment apps, online brokerages and investment platforms you can register with to become an investor within days. Thanks to the internet, it has never been easier to start investing than today.
While it is true that you need some money to start investing, the reality is that you do not need large amounts to get started. You can, for example, invest as little as $100 a month into a mutual fund investment plan to get started and benefit from the wealth that will accrue over time.
Misconceptions about investing keep people from making their first investment.
3. Investing is very risky
Another very common misconception is that investing is inherently very risky. While some investments are considered to be high-risk, investments such as bonds or property are considered rather safe and the chance of losing your invested funds are very low when investing in these asset classes.
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4. You need to be an insider to make money
Some people also believe that you can only make money in the financial markets if you are an insider or an investment professional. Again, that is far from the truth. Anyone who builds a diversified portfolio composed of stocks, bonds, commodities or property and regularly monitors it, can make money in the financial markets over time. No insider knowledge required.
5. Investing can wait until you are older
There are also people who believe that they can hold off making investments “until they are older”. While everyone can decide for themselves when the time is right to make their first investment, the sooner you get started the more wealth you can accumulate over time as an investor. Hence, it would be wise to start saving up for your first investment property or to make your first stock purchase today, rather than tomorrow.