I am going to explain this, so we are clear about investing.� The term �investing� is perceived to be such a loaded and complicated word when it means merely: � Expend money (or time) with the expectation of achieving...
I am going to explain this, so we are clear about investing.� The term �investing� is perceived to be such a loaded and complicated word when it means merely:
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Expend money (or time) with the expectation of achieving a profit or material result.
That�s it!� Now, where it gets interesting is when we start asking the question, �What should I invest in?�.� I get asked that quite often, and my response is always �what are you trying to accomplish?�.
The most common answers I get are �I don�t want to work anymore� and �I want to have money for retirement.�.� It is rare that I would hear �I want to be rich� or �I want to leave something for my kids�.� I�m shocked by that, but not really.� Here are three reasons why investing seems complicated.
1. Not Knowing Why We Want to Invest
I�m sure you�ve heard the term �Knowing is half the battle.�.� If not, you�ve heard it now!� This statement is true in everything you do in life, especially when it comes to investing. �By doing that, you are setting a target to hit, an end game, an object of attention to attack, a goal to work towards, a satisfaction mark.
If you want to invest (and you should), know why you want to invest.� Seriously, think about the specific thing or reason you want to do it.� I�m not talking about �I want to have more money�, be specific!� Example:
I want to own and live in that house on the hill. I want to retire in the next three years with $xxxx monthly/yearly I want to pay for my kids $20k a year tuitionAnswers like �I want to make money� is like saying �I want to be a better person�.� These are too open-ended and have no end game.� Answers like �I want to make $20k before the end of the year� and �I want to adopt a pet and give it a home�.� Set your end game up.� Now go more in-depth into those specifics until you�ve reached your conclusion.��Once you completely understand why to a conclusion, you are ready to move to the next part.
2. Not Realizing What We Have to Invest
Resources!� Investing in an everyday context revolves around money.� There�s a quote I use to hear a lot that goes, �You need to spend money to make money�.� While that might be true, not everyone has a lot of extra money to spend.� That�s good!� That means you have extra money do invest!� �see what I did there?
Let�s keep this simple.� You can invest Time or Money.� These two aren�t mutually exclusive.� They often work together, and one can assist in gaining the other.� Money can buy you time (in a timeline context), and time can get you money.� The goal is to figure out how much of each we have and to use it wisely!
A person can spend time getting an education in a specific area or even spending time on a blog like this one or BiggerPockets.com.� Resource help is readily available to help guide in seeing your potential and answering the original question.
3. Taking Action To Invest
I can come up with plenty of reasons why many of us don�t take action to invest; however, most of it revolves around the �unknown�.� We get excited when we have figured out why we want to invest.� We get even more enthusiastic when we�ve realized what we have to invest.� Oh boy!�It�s getting good!� Yep!� It�s that time to invest! Yay!� Let�s do it! I�m all in!
OR you might still be saying to yourself, �I�m not sure yet.�.� Then start at the top and reread it until it clicks.� Once you know why and what you have, the take action part should start to take shape.
The �action� goes back to the first question of �what should I invest in?� and the answer is �what are you trying to accomplish?�.� Remember, be specific!
With these specifics, the road becomes more apparent.
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Example: You now know making $20k before the end of the year is what you want to do, you�ve realized you�ve got money on your side and not much time.� The $20k is for your childs tuition at school.� �Your child will be in this school for the next three years, and it�s a monthly payment of $1,666.� Now, you can focus on the action and options available.
I am not a financial advisor or an expert, so my thoughts around this scenario are strictly my opinion.� In my opinion, I would probably invest in a passive income asset that will bring me the $1666 or more in cash flow monthly.� This way, I won�t have to worry about working myself like crazy to keep my child in school.� I would find an asset like real estate, dividend stock, etc. that is attainable which will meet all the requirements found in my �why I want to invest?� question.
Now take action!
I hope this helps.
-A
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