Smoking. Everyone knows it is bad for them. Yet many struggle to give it up, putting it off for later.
Personal finance gets stuck in a similar situation. Everyone knows creating these plans is crucial for their long term wellbeing, yet they struggle.
Here are the top 5 reasons why. Do any of these sound familiar?
- The achievement delay: It is so great to finally be earning and spending, that the whole concept of planning feels far away… until it isn’t
- Terror Paralysis: Fear of getting it wrong. It’s money – the stakes are high. This keeps people from taking action. They worry their lack of expertise will lead to bad decisions, so they take… NO decisions
- Time Delusion: It is easy to keep putting it off. After all there is no visible urgency while earnings are coming in.
- Confusion: Don’t know what to do, who to ask and how to get started. So they wait.. and wait.
- Knowledge gaps: Like the difference between saving and investing. Or inefficient tax planning. And the like.
Fact is, getting started and being IN the market almost always beats all the issues. Basic investing with large diversified exchange traded low-cost funds can get this underway. Many successful investors build their entire portfolios with 1-5 funds and just let them sit there, quietly compounding in the background.
Investing done right for the majority of people is boring, passive and even lazy.
Get and Forget.
