Investing in the stock market can feel a bit like gambling. With study and guidance, understanding certain rules, increased confidence in one’s ability to invest successfully builds as investments appreciate. Knowledge is key.
This relationship – between knowledge and confidence – might seem intuitive. Wells Fargo conducted a survey of affluent women regarding their confidence in investing for retirement. The results were somewhat surprising. While an overwhelming majority of those surveyed (91%) agreed that it is extremely important to have confidence in one’s ability to invest, a significant number (41%) indicated that they were not at all confident in their investing ability.
Is this a catch 22? One needs to be confident when committing hard earned dollars toward future security and consistent income for retirement. It is difficult to stick with something that you have little confidence in. However, the results of the survey did suggest that those who had the opportunity to learn about investing were in fact more confident in investing as a means of preparing for a secure retirement.
Certainly there are other ways to grow wealth besides investing in the stock market: real estate, art, oil and gas, etc. are alternative forms of investment. Choosing among these many vehicles for investing and deciding how much of your portfolio to devote to any one of them is a subject for another post. The objective is the same, regardless – to save and grow your assets. Simply being a good saver is no longer good enough. One must also be a good investor. Owning assets that can appreciate faster than inflation is the goal.
Education is so important in doing anything well. The challenge then is how to make it easy and fun to learn. Here are a few resource recommendations:
Sacred Success: A Course in Financial Miracles by Barbara Huson speaks directly to women guiding them on a path that includes financial independence.
The Little Book of Common Sense Investing by John Bogle is well regarded.
What’s Food Got To Do With It? is an article I wrote which covers some essential investing basics using food and menu planning as a metaphor.
Look for ways that interest you to become more familiar with investing. Start small and find some topics that appeal to you. And build from there. The rewards are many . . . potentially a larger nest egg, more clarity about how to prepare for retirement and greater confidence in the future.
I’d welcome some suggestions and comments on this!