Too Intimidated To Invest?

One of the biggest factors that most newcomers to the financial world have to overcome is feelings of intimidation when it comes to investments

. For decades, investment portfolios and the stock market have belonged to a very small percentage of the population: the wealthy, the heavily business-oriented, or those with a degree in economics. It has long been a field in which knowledge is power, and power translates to a nice, fat bank account.

Unfortunately, this type of thinking leaves few options for those with smaller savings accounts, no working knowledge of the finance world, or an inability to trust the traditional system with their hard-earned funds. The sad truth is that many people avoid seeking the help of a financial advisor for both personal and financial reasons - none of which should be a barrier to a sound future.

Investment Myths

You have to have thousands of dollars set aside to begin investing. One of the biggest barriers to investing is that people believe in the old adage that you have to have money to make money. After all, how can you even begin to think about investing if you can't even save enough money to get started? Although there are certain types of accounts that require a minimum investment, you can also start small. You may get a lower return to start out with, but small investments in bonds, common stocks, and IRAs are typically easy to do, don't require huge funds, and allow you to learn as you go so that you can grow more comfortable with investing as you are able to save more money.

I won't be able to access my money in an emergency. Another common financial fear is that your money will be tied up in investments so that you won't be able to access the funds in the event of a medical or family crisis. While there are some types of accounts that will charge you a heavy fee for early removal of your money (like CDs), there are other types of accounts that won't (likemoney market accounts). The trick is to determine the best types of investments for you and your lifestyle - there is no right or wrong way to do it. In many cases, it's best to work with a financial advisor who can help you create a portfolio that is a good balance of long-term savings and shorter-term options that will give you more freedom with your money.

I might lose all my money. When investing in the stock market, there is always a chance that your savings will be lost or drastically reduced. However, this isn't very common, and it usually happens to those who rely only on high-risk investments. When you invest moderately and under the guidance of a financial advisor who will spread your money out in several different types of accounts, you stand a very good chance of making money over the next ten, twenty, thirty, or even forty years. The trick is to view investing as a long-term plan; you might not become independently wealthy by next year, but you will have something to fall back on when you're ready to retire.

The benefits of investing are too large to ignore, even if you don't have a large savings account, are currently in debt, or know virtually nothing about finances.

Your best first step is to meet with a financial advisor who can help you determine what you should do first and how you can begin to get a better control of your future. The best financial advisors will look beyond the figure in your bank account and work with you to make sure you are comfortable every step of the way.

by: Wesley Watkis

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