What's Your Excuse? Break Down Your Money Barriers
Why You Feel That Way
For many women, there's a huge disconnect between making and spending money and investing money. When it comes to investing, you don't trust yourself. I know half a dozen accomplished professionals and fabulous stay-at-home moms, all of whom can do just about anything, except invest.
Why do they feel this way? There are a few reasons. For some, investing is boring. Just the words "Wall Street" elicit a big yawn. For others, it's the numbers. If you can't get past the basic math, it's very difficult to get yourself to make even the simple decisions about how much of your money you want to invest and what percentage of your income makes sense.
And still others are just plain scared. When it comes right down to it, they're afraid that if they invest their money, they'll lose their money. If this is you, you probably keep your money where you think it's "safe" in the bank. Let's face it—losing money is no fun. In fact, it's a horrendous experience. If you saw your tech-stock-heavy 401(k) get cut in half by the market bust a few years ago, or if someone you know bought Lucent, IBM or—more recently—Enron and lost his or her shirt, you've got plenty of reasons to be wary.
But you have to realize that investing losses are like any other losses. You have to lament them and move forward. That means understanding why you made a mistake or had the problem and determining what you need to do to have a better experience in the future.
How to Get Over It
As a formerly fearful investor myself, I'm here to tell you that the most successful investors use fear to their advantage. They see a best friend get divorced and her standard of living plummet. Forget about trips to Europe! She has to curb her trips to the mall. And they decided, "That's not going to happen to me." They see their mother lose a spouse and have little to no idea of how to run the family finances, and they decided, "Not me. I am never going to be in those shoes."
The key is positive thinking. Where investing is concerned, I need you to become a glass-half-full person instead of glass-half-empty. Instead of focusing on possible losses, think instead about all you could accomplish if you started investing a little bit today.
If you don't invest, you won't have the money you need for a long, comfortable retirement. You won't have any extra cash to give your kids a helping hand, and you won't be able to survive the burden of an ill or dependant parent. You can decide today that you don't want to be in that situation tomorrow.
What else can you do quickly, cheaply and easily?
- Open your statements. Each quarter, you need to keep track of the direction your investments are going in and where you stand. Paying attention means you'll spot any errors in your account immediately.
- Ask questions when something seems wrong. If you don't understand something on your statement, call the toll-free number and tell the customer service rep what's on your mind.
- Make changes when appropriate. Changes in your life will dictate changes in your retirement and other investing plans. What sort of life changes? A raise, bonus, tax refund or inheritance.
Next: "I'm too old. It's too late for me."