This article was originally published in Money Magazine, on October 14, 2022.
We all know that investing is good for us, but a few common misconceptions can act as roadblocks, holding us back from getting started.
Let’s sort fact from fiction by looking at what Australians see as the three biggest impediments to long-term wealth creation based on the results of a recent Syfe Investor Pulse 2022 survey.
Myth #1: I don’t have enough money to start investing
If you believe investing is only for the rich, think again.
Close to 9 million Australians own investments beyond their super and the family home. It’s safe to say plenty of these investors are ordinary people who don’t regard themselves as uber wealthy.
Yet it’s a common myth that it takes a decent cash stash to start your investment journey. Research by fund manager Vanguard for instance, found that seven out of 10 Australians believe you need at least $1000 to be able to invest. One in three think you need more than $10,000.
These numbers couldn’t be further from the truth.
A generous selection of investment platforms let you start investing with small change – often five bucks or less. With Syfe it takes as little as $US1 to start your investment journey.
The key is to understand your current financial situation so you can figure out exactly how much you can afford to invest. Streamlining spending can help you find extra money to grow your portfolio.
Myth #2: I don’t have the time to invest
We all lead busy lives. Between juggling work, friends and family it can be hard to find time for ourselves let alone our finances.
But it’s so important that we make time for money matters. Your future self will thank you for it.
The good news is that investing doesn’t have to be a time thief.
The new breed of online investment platforms can have you up and running in as little as five minutes – less time than it takes to order a takeout latte.
Better still, many have a ‘recurring buy’ feature that lets you schedule a day in a week or month to automatically purchase the shares or ETFs of your choice. It’s also an effortless way to dollar-cost average, helping smooth out market volatility while setting you up for long term investing success.
And features like Wall Street insights can help investors quickly and easily understand where top investment analysts think stocks like Apple, Amazon, and Tesla might be heading next.
Look for a platform that includes all the information you need to get up to speed on investing, plus the latest market news and analysis, and it’s easy to invest with confidence and efficiency.
Myth #3: Investing is too risky
Let’s be quite clear here. All investments carry risk. And it’s not just about the risk of a short-term market dip that could impact the value of your investments.
Even a savings account brings the risk that the purchasing power of your money will be nibbled away by inflation. And with inflation currently at multi-decade highs in Australia, looking for ways to help your money do more for you – to do money better – is more important than ever before.
So rather than try to avoid risk altogether, it makes more sense to think about how much risk you’re comfortable with. It’s an area where you may want to speak with a professional adviser.
We each have different circumstances and tolerance for risk. And of course, no one can say how financial markets will behave over the next week, month or year.
Ultimately, what we can say with certainty is that history has shown investors who are prepared to have time in the market are rewarded with healthy long-term returns. The bigger risk lies in doing nothing at all.
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About Syfe Whether you’re just getting started investing or just want to take things to the next level, with Syfe you can invest in over 10,000+ US stocks & ETFs, all from the palm of your hand. Not only that, but when you invest with Syfe, you get FREE monthly stock trades, access to powerful features like recurring buys and fractional trading, as well as daily customer support. All of this means you can take advantage of new investment opportunities when they emerge, any time, any where.
Investing involves risk, including the risk of losing your invested amount. Any information that may be in this communication is general in nature only and is current at the time of writing. Syfe does not make recommendations of any kind or provide personal advice that take into account your objectives, financial situations or needs. You should therefore consider the appropriateness of the information in light of your own objectives, financial situation or needs before acting on such information, and/or speak to your financial or tax adviser for personal advice. Past performance figures are based on information provided by third parties and may not be accurate. Any references to past performance and future indications are not, and should not be taken as, a reliable indicator of future results. Syfe does not intend for any statement made here to relate to the acquisition or disposal of any shares in the companies or other financial products named here. Syfe makes no representation and assumes no liability as to the accuracy or completeness of the content of this communication