Did you know that Myth comes from the Greek word “mythos” which stands for either a ‘story’ or a ‘fiction’. These myths narrate fantastic events but with no actual proof of their happening.
This is exactly what myths for investment are present out there. Myths are out there but no actual proof of their existence is present. It is just a narration of people who have less understanding related to investment. This chain of transferring myths from one person to another is an ongoing process.
In this article, I’ll be busting these myths on investment. So stay tuned!
● Investment is complex and is only meant for Rich
● Investment Risk is high, only savings will secure your future
● Only stock market is the best option to invest
❖ Investment is complex and is only meant for Rich
Investment is considered as a complex thing to do. But is it? NO.
The people stating this, are the people possessing less knowledge regarding this term. They are the people who live outside the investment circle.
The belief that only rich people do investment is entirely false. Did you know that the man who is the 6th richest person in the world, Warren Buffett started investing with just $38 (INR 2773) when he was only 11 years old. This money he saved from selling door-to-door newspapers. Today he has a net worth of $96 billion.
It’s not the rich who invest, it’s the investment that makes them rich. It’s the return, the power of compounding that makes a person rich. Nothing is complex in life, all it takes is the right mindset to uncomplex the complexities!
❖ Investment Risk is high
Getting into a rollercoaster might be risky for some, and exciting for others. Some might fear the risk of their life whereas some might enjoy this moment of life.
This is what investment is for people. For some, it might be risky and they feel they’ll lose all their invested money. Whereas for others, it is a way to make their saved money work for them, earn returns on their investment.
See the risk factor depends on how many or few investments you hold. It’s like holding many financial eggs in one basket, keeping all your money in a single stock, this is what is called concentration risk (greater risk).
Focus on making diversified investments. Invest according to your risk tolerance. If you want a high return then it comes with a high risk involved. Simultaneously, if you want low risk and normal return, then debt investments are always an option.
❖ Only stock market is the best option to invest
Why limit yourself to one option when there’s a basket full of investment options available.
It’s a general assumption that only the stock market is an option to invest in. Due to this non-investors consider it as risky as the fluctuations in the stock market are too volatile!
A variety of options are available there for investments that are less volatile and less risky. For instance, mutual funds, government bonds, Exchange Traded Funds (ETFs), Index Funds, Insurance, etc.
Selecting the best-suited form of investment should be made by keeping few things into considerations like:
● Your timeline
● Your risk tolerance
● The amount of money you entail
The Bottom Line:
Myths will come and go, the main thing is whether you believe them or not! Don’t just depend on someone’s thoughts, research on your own, and then proceed further.
Investment works miraculously if done correctly!