Why would anybody want to invest in stocks? That is a sure way to lose all your money. I have tried it once and it didn’t work. Lost 20% of my money. Investing is a scam. Investing is stupid!
Of course, the above is not my personal view on investing. But reactions like these are common when I try to talk to people about finances and investments. They’ve not read the introduction to investing.
Investing Doesn’t Work
Or at least, that is what a lot of people think. They think it’s the same as gambling. Sometimes I try to talk to friends, family, or colleagues about investing. About working on your future, or just building up capital for whatever. But every time I do this, I feel a lot of resistance, aggressiveness even.
Where is this coming from? Are Dutch people so stubborn that they simply cannot see how investing can massively accelerate your freedom? The image that investing in stocks has is that of gambling. Everybody seems to know someone who has ever lost money investing and therefore thinks it’s super bad.
Then when I push through and try to keep the conversation going, I see that these persons have no clue what investing actually is. They simply say “investing is stupid” without actually knowing anything about it. Sometimes they know someone who lost a lot of money and therefore say buying shares is not working. What they don’t say is that this someone bought shares of one company and sold it a month later with a 10% loss. Clearly the system doesn’t work, according to these people…
This is what makes me super mad! The problem is, how to talk to the investing sceptic out there? I want to educate, to explain how diversification works, about index funds. How the time horizon dictates how aggressive you can be. But every time you do this, you’re confronted with the “yes, but I know someone who lost money” non-argument. Yes but I could lose money. Yes, but what if the market crashes. My reaction is usually simple. If the market crashes I can buy a lot of cheap stocks! And then I’ll just wait until the market recovers. That year is a loss, so what. My horizon is longer than that year.
Ignorance is Bliss
In most cases, the persons I have these conversations with are people that don’t understand money. They might have a good income, but they complain every month they’re short on cash. Maybe they have two expensive cars and a house that’s too large, but still.
Then I’d rather see my colleague making his 400,000 euro mistake. At least he is working on his future. Maybe paying off his 2% mortgage isn’t the fastest route to financial independence, but at least he’s making progress.
I guess for some people, investing is stupid. It seems so hard to change that. That’s on of the reasons I started this blog.
How do you deal with these conversations? Do you have them or do you simply not care?