Top Investing Mistake #2: Failure to Launch
Many people are absolutely terrified of taking any risks. They stay in a job that they hate, settle for relationships that don’t fulfill them, and take the same route to work each day. It’s easy to become a creature of habit. And it’s very safe.
This kind of thinking does not work when it comes to investing. There is always risk involved in any investment. Even putting money in the bank is risky. The bank can default. They can just steal your money and say that your balance is zero or your account doesn’t exist. And, besides that, there is the reality of inflation. People think money in the bank is risk-free, but I am not sure if that is really true.
When people are afraid to make a decision, they often resort to getting more information. This means doing research on the internet, reading blogs, buying books, and even listening to CDs and going to seminars. The problem is that more information does not make it easier to decide. It actually makes it more difficult. People often feel like they need to know all the information, and spend years “doing research” before starting to invest. The technical term is paralysis by analysis.
I am not advocating investing without doing research and learning successful strategies to achieve financial freedom. I am just suggesting that there is a limit to the information that we need to get started investing. We don’t need to read every book on the subject. We don’t need to read every blog for a year. We need just enough information to model someone successful, and not too much more.
It is perfectly natural and healthy to be afraid of losing money when we invest. And this fear can even serve us when we start out. It is important to keep this fear in check so that it does not become the dominant emotion in our investing decisions. Let it remind us to manage our risks, but not prevent us from taking action.
Related posts:
- Top Investing Mistake #5: Not Managing Risk
- Top Investing Mistake #4: Not Getting Enough Information
- Top Investing Mistake #8: Not Getting Buy-In from Important People
- Top Investing Mistake #15: Not Managing your Spending
- Top Investing Mistake #6: Going Big Too Soon
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
