Investing is scary. Not Freddy Kruger scary, but scary in the way things are when we don’t do them very often – like getting insurance or giving a laudatory speech.
But investing is one of the necessary evils of modern life. That means one thing: new investors have to face their fears and look under the bed. There are no monsters lurking there if you invest properly.
The scariest part could be all of the questions a new investor has. How much do i need to retire? Pay school? Buy a house? And that leads to further questions. Is a Home an Investment or an Asset? What is an asset anyway? And then: am I a growth investor or a value investor? Do I like the thrill of trading, or does a sharp drop in a single stock make me feel sick? How much money will it take? Is there anyone who can help me? Is there anyone I can trust who can help me?
So many questions and most of them are for later. It is best to start at the beginning: why invest at all?
This question is easy to answer. Because up to a point money can buy happiness. Really. That’s what researchers say. Having enough money compared to too little can improve happiness. Nobody wants to worry. And people want to look forward to things like home ownership and retirement.
And it is possible to have enough money. A little savings, a little effort, and the magic of compound interest can make this trip to Venice for a milestone birthday possible – even while the kids are at school.
In this video I tell you more about how to get started. But first a pop quiz:
How much do you have to invest every month to become a millionaire at 65?
For the answer and much more: Clock.