A Firstline Securities Limited Blog by: Dalia King
Right now, out there in the world, are wealth managers without personal investment portfolios, insurance agents who aren’t insured, traders who’ve never bought equity positions for themselves – and the list goes on. In other words, if you are unhappy with the current state of your savings and investments, you’re not alone. Saving and investing is a no-brainer in theory but very much up for discussion in practice.
The key however, is the discussion. Financial pundits have decided views on how much you should save and in what you should invest. Often, their edicts are so far away from your reality that you simply do nothing at all, which is the worst choice you could make. There’s an entire cosmos of options between zero and one hundred.
So, in this article, I’m going to set out some of the reasons why you may not be saving & investing as you should; and then offer some practical work-arounds. It’s not going to be all-encompassing because there are as many reasons as there are people in the world; but I hope some resonate with you – and the solutions do too!
The above words are re-fashioned from a Destiny’s Child lyric and apt for this situation. You need to keep the lights on, the water running and the car functioning. However, when you deal only with life’s short-term expenses, you’re doing a disservice to your future self.
This can either be about self-control (and how much you lack it) or symptomatic of an unrealistic savings plan.
You fell off the wagon, boy did you. Maybe it was a health emergency that decimated your savings, leaving you despondent. Perhaps it was actually the achievement of one of your goals – the downpayment on your house for example – and now you’re unsure of the next goal and ‘taking a break’ from saving. This happens in all spheres of our life when we have not yet inculcated habits. Story of my life: I decide to exercise four times a week at 6 pm. For two straight weeks I exercise like the Olympics is coming up and the nation’s hopes rest in me. One day I have to attend something at 6pm so I miss my gym session. Your girl never returns. Exercising is not a habit for me and therefore easy to let go.
Hello entrepreneur! You know about taking financial risks and you also know about how to mitigate them. Though your focus is 100% on making a success of your business, it is strategically unwise to funnel 100% of your money there as well. Diversification is not just for investment portfolios.
Firstly: I believe in you. Work those numbers. Secondly: refer to the section above about forming habits. Please don’t be one of those Lotto winners who go bankrupt. The worst story I’ve ever heard is of the woman who won millions in the lottery twice and went bankrupt twice! The more money you have, the more things you can buy. Savings and investments will drop in priority while you spend up a storm.
The good news is that there are more options out there than a bank savings account. That said the bank savings account has its uses – particularly if your current alternative is to save nothing, nowhere.
Listen, I watch Bloomberg too. The average American doesn’t know how easy they have it, what with countless online brokerage companies at their fingertips, US dollars in their wallets, the whole NYSE theirs for the taking, if they want it. However, there’s no reason you can’t benefit from similar opportunities.
Do you recognise yourself in any of these reasons why you aren’t saving and investing as you should? Are there other reasons – and solutions! – you want to share? Feel free to leave a comment below!
In celebration of our shiny new website; and our sincerest wish to grow an active discussion community within it; we’re giving away a prize (US$25 Amazon gift card) to one of the commenters who provides a helpful solution to those struggling to save and invest. Yes, we recognise the irony of closing this article on saving with a prize for spending. We’re doing it anyway! The winner will be selected at random (I’ll be spun around and when dizzy enough, I’ll point at the computer screen, like an online game of ‘pin the tail’).
We look forward to hearing from you!
Have a great day everyone!