9 Common Misconceptions About Investing

Hello Grasshoppa,

When we talk about investment with our friends & family, there’s a chance where you will meet a “Guru” that will speak their mind about investing but the fact is, they know nothing about investment or they have yet to invest a single cent of their money on investment. Sometimes you may bump into people that invested before but have their investment money “burnt”. Throughout my years of socializing around, there are times where I have met these people. Of course there is nothing wrong to speak their minds or share their thoughts on investment but if you are new  to investing, it is best that you do your own studies before you choose to believe anything.

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What Are The Common Misconceptions About Investing That You Always Hear?

1. You Need High Capital To Invest 
This is on top of my list because I heard it over & over up until today. Do you really need high capital to start investing? The answer is NO. You can start investing with as low as RM1. Yes RM1. That’s if you invest with HelloGold where they accept minimum investment of RM1. There are other investments where you require as low as RM100  to invest such as Stocks, P2P Financing (Fundaztic), Robo-Advisor (StashAway) & many others. Some do not need high capital & you just have to be 18 years old to start.

2. EPF Savings Is Enough For My Retirement 
It’s a huge NO NO to think that way. Based on the report by EPF, majority of Malaysians will averagely have RM213,000 when they turn 54 while only 1% will have RM700,000. Do you think it is enough to retire for the next 20 years with RM213,000? If you spend RM213,000 for the next 20 years, you will only have RM887/month. What can you do with RM887/month? I personally think that it is important to invest our money somewhere else. Platforms like PRS does act like EPF but it is a voluntary saving & investment scheme.

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3. Investment Is Too Hard For Me To Understand
If you find that the investment concept is daunting and foreign to you, then it is good to have more studies & learn more on investing. All you need is a solid foundation on personal finance, investment, risk management & you are good to go. There are many platforms where you can learn about investment & personal finance such as books, blogs & courses to equip yourself with the knowledge to invest. If you find it hard to learn, there are other simplified platforms such as Robo-Advisor, ETF, Mutual Fund & Index Fund where can invest with ease of mind.

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4. Investment Is Too Risky
What doesn’t involve risk? That’s what I thought initially by watching TVB & other dramas where they mentioned that they have all their money wiped out especially in stocks. Is it risky? Yes it is but you can always choose to invest according to your risk appetite. If you are not looking for more than 3-4% return, you can keep your money in Fixed Deposit.

5. I Don’t Have Time To Invest
If you can spend an hour a day watching Netflix, you can allocate at least 30 minutes a month to manage your investment portfolio.

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6. Stocks Investment Is Just A Piece Of Paper 
I heard some “experts” sharing their thoughts on stocks investment. Is it true? Investing in stocks are even cheaper than starting a restaurant or hawker business. When you buy that company share, you are buying the percentage of ownership of the company. Those companies that you are investing in may pay you Dividend if they are profitable.

7. It Is Too Late To Invest Now
I will usually hear this when the individual is more than 30 years old. They will claim that they are too old to invest since they have not started to invest in their 20’s. It is never too late to start unless you are unwilling to start.

8. It Is Not The Right Time 
During bad economy or good economy, there are many scenarios where you will hear this. In a bad economy, they will claim that it is better to invest when the economy is better. During a good economy, they will claim that it is too expensive to invest, or they will claim that market will fall soon during good economy. You can check out my past article on 7 Things You Can Do To Survive A Falling Market to have a better guideline during a bad economy.

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9. I Will Start To Invest When I Have More Money 
It will never happen even if you have an  increment in your salary. Why? Your lifestyle may increase as well. Since investing can be as low as RM100, it is not hard for you to allocate RM100 from your salary. You can save that money from drinking your favorite bubble tea or Starbucks Coffee and use that to invest instead.

Conclusion :

With that, I would like to debunk the 9 common misconceptions on investing. So, do you think you are ready to embark your journey of investing? Whenever people ask me about their interest to learn more on how to invest their money, my usual answer to them will be, how much time are you willing to allocate per day or per week to learn about investing? We all may have very tight schedule with our daily work & other personal stuff but we may also able to allocate at least 20-30 minutes our time to learn more about investing. If you are keen to grow your wealth by investing your money, equipping yourself with investing knowledge will definitely help you.



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