How other people got rich, while you were waiting for the perfect moment

 

Getting started on any new endeavour puts us out of our comfort zone. And investing is no different – it can be very uncomfortable to be taking risks with our capital.

Which is why so many people just never get started. Sure, they might show an interest … even do some internet research … sign up to some newsletters … read some blogs …

But actually taking the plunge of opening an account and trading with real money is the hurdle they never quite move past.

What stops us

There’s no shortage of apparently good reasons to NOT trade.

Bad news about markets … lack of time … lack of knowledge … lack of money … fear of failure …

These are all genuine reasons that hold us back. And they all sound perfectly rational.

Bad news: People talk a lot about wanting markets to return to ‘normality’, but there is no normal state for markets. They are in constant flux, from nose-bleed volatility to stuck in the doldrums, with doomsayer pundits warning of the coming Armageddon. If you’re concerned about short-term volatility and bearish predictions, the answer is to expand your horizons – over the long-term we are able to ride these things out and even use them to our advantage. Avoid short-term trading outlooks.

Time: In reality, trading needn’t be time-consuming. Some of the best trading methods I know can be done in less than 30 mins/week. More time spent trading does not equate with more money.

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Knowledge: You will never have enough knowledge about the markets. You’ll always be learning. And if you think you know what markets are going to do – that’s when you’re in trouble! Always keep curious and never fall into the trap of thinking you know the markets.

Money: Well, wanting more money is exactly the reason we DO trade! Of course, trading should only be done with money you can afford to lose. However, please don’t wait to have a substantial sum to get started – it’s much better to start smaller, but start sooner.

Which brings me to fear of failure … a big obstacle for many wannabe investors.

Fear of failure is very rational – it’s what keeps us from taking stupid risks. We shouldn’t fight it. Instead, we should manage it – understand what the risks involved are, and balance those with potential reward.

By starting small, we can hone our attitude to risk, making mistakes along the way without serious consequence.

A far bigger threat to your wealth is to not get started at all.

What happens while we’re waiting to be ready

The months and years we spend on the sidelines waiting to get involved are all time we could be learning, making mistakes, getting experience, and steadily growing our modest fund size.

Look at any compound-growth curve and you’ll see that slow flat growth at the beginning – the sooner we start, the sooner we can move through this phase to the point where wealth is building rapidly.

If you wait until you’re ready, you’ll never start. Instead, start small and build steadily. Experience and compounding will do the rest for you.

 

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