In the last 15++ years of my investing life and about 4-5 years of actively indulging in investor education I have come across many bottlenecks which a prospective investor has in mind like
1) I don’t understand
2) I don’t have money
3) My XYZ friend invested in some chit fund/basis some tip and lost money
4) I don’t wish to take any risk
5) It does not work for me.
etc etc.
I am sure one can write 20++ challenges or bottlenecks that one has in mind.
Though the biggest risk in initiating investing is not even fear it is inertia.
Over time, this inertia becomes so big that when one hears about or meets a successful investor –one always feels that this person has resorted to something unnatural to be more successful.
It is like old Hindi movies –you may become wealthy only by unlawful means.
But then how to beat this inertia?
1) Need to educate the individual on the basics of investing like budgeting and taking stock of one’s current situation.
2) Educating on the basics of asset classes and how they work.
3) Educating on the basics of SIP and compounding.
4) Develop a goal-based investing plan basis one’s risk profile.
5) Developing a protection plan and reviewing taxation needs
The biggest one to beat inertia is to ignite a worthy goal in one’s mind and show him how he can achieve it by taking simple steps in a disciplined manner.
One need not even have the perfect plan for the prospect (by the way is there any perfect plan for the prospect ?) but post-understanding needs even if one starts early and starts investing in simple funds like diversified large caps ( of reputed funds houses) and keeps investing in systematic manner regularly –there is a cent percent chance of achieving goals.
