What stops young people from investing? And how to overcome the obstacles | Pints

Investing can be confusing. For most young people, the plethora of options available can be overwhelming and lead to an analysis-paralysis situation. Many start wrong, get burned and swear of not investing forever. While others just keep waiting to start. But investing, just like any other skill, needs time and effort to master. Let's explore a few barriers that come up for first time millennial investors and how to overcome them.

Lack of knowledge about investments

Many young people may start off feeling intimidated by the world of investing. They lack the relevant knowledge and experience to feel confident about making sound investing decisions, so they often choose to stay on the sidelines. This may seem ‘safe’ - after all, why do something that has a chance of failure? But this is a missed opportunity, since time is one of the most important factors in successful investing. The sooner you start, the more time you have for your investments to compound. However, you shouldn’t just jump into investing without doing your homework first. Some suggestions on what you can do:

• Sign up for a course - No matter what your job or education is, signing up for a ‘Fundamentals of Investing’ course can be a great start. Check Udemy or Coursera for some solid courses. Youtube too has a lot of great content - just beware of the scammy gurus trying to teach you a magical way to make a million bucks in 4 weeks
• Read - Sites like Investopedia, Motley Fool, Zacks etc have amazing content. Even if you don't sign up for their premium tier, the free articles will give you  lot of relevant information
• Ask around - find a mentor. If you can get Warren Buffet to take you under his wings, great! If not, find anyone who has some understanding of how the basics of markets work. Again - do not go with “Which stocks should I buy” but with a “How does the market work?” mentality

Fear of losing money

Many young people are worried about investing their money because they are afraid of losing it. It is important to remember that there is always some risk involved when it comes to investing, but there are ways to minimise those risks.

• Diversify your investments, which means investing in different types of assets so that you are not putting all of your eggs in one basket
• Reduce risk by doing your own research and only invest in companies or industries that you understand reasonably well
• Finally, be sure to have a financial cushion in case of unexpected losses. By taking these precautions, you can help to ease your fear of losing funds while investing and increase your chances of earning a return on your investment

Not having enough money to invest

Another obstacle is that many young people are unable to invest in the stock market or other opportunities because they do not possess the necessary funds. This can be a difficult situation because it can feel like you're missing out on a chance to make money. How do you get around this very real problem?

• Go Fractional - there are many platforms that allow you to invest in fractions of stocks, for as less as $1
• Get into ETFs - ETFs (Exchange Traded Funds) are funds that hold multiple equities and offer you units of the fund itself. It is like owning small parts of a large number of companies
• Use Robo Advisors - again - they use a combination of ETFs and actively managed funds and can be a great way to start

The key thing here is to start no matter how little you can start with.

Being too busy to invest

Ah.. who has the time to invest!  When you’re busy with work, college, going out, binge watching Netflix - there is little time left!

If you are hard pressed for find time, strongly consider passive investing. Sign up with a Fund or a Robo advisor. They take all the effort out of the way. If you are not going to take interest in your investments, it is best to leave it to experts.

Investing in the wrong things

When it comes to investing, there are a lot of things to consider. You want to make sure you're putting your money in the right place and that you're getting a good return on your investment. However, many young people are scared to invest because they don't want to make the wrong decision. They don't want to put their money into something that isn't going to give them a good return. However, it's important to remember that there is no such thing as a perfect investment. There will always be some risk involved. But if you're careful and do your research, you can minimise the amount of risk you take on and still make a profit. So don't be afraid to invest. Just be sure to do your homework first.

Not knowing where to start

Investing can be a great way to secure your financial future, but also a very daunting task to begin. The first step is to understand the different types of investments available, such as stocks, bonds, and mutual funds. Once you have a general understanding of the different options, you can start to research specific companies or funds that align with your investment goals. For example, if you're interested in sustainable investing, you might look for companies that focus on renewable energy or waste reduction. Once you've found a few potential investments, it's important to compare the risks and rewards of each option. With any investment, there is always some level of risk involved, but by doing your homework and diversifying your portfolio, you can help minimise that risk while still achieving your financial goals.

The key thing when it comes to investing, is to start somewhere. Thanks to the explosion of content, online courses, fractional investing platforms, robo advisors etc - there are no excuses left for people to not participate in the markets. It is important to start and stay the course. As the saying goes - You miss 100 percent of the shots you don't take.

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