8 Reasons Why People Don't Do Any Investment – Part 2

In my last blog, I have written about the difference between investment and non-investment. You can read it here.

 

Today I am going to write about the reasons why people don’t do any investment.

I have observed lot of reasons for not doing any investment. In first part I have written about 4 reasons, you can read that here.

Here I am listing remaining reasons.

5. No future goals

Most of us never set any future goal other than house and car. Very few think about retirement goal and starts investing for that but most of people think that retirement is years away and we don’t need to invest for that, by the time we retire we will have lot of money, but what they don’t understand is from where this money will come. Goal based investment is very necessary, it keep up invested for log time.

6. Financial commitments

For some people financial commitments are the reason for not be able to invest. Some people purchase 1 or 2 house and most of their income goes in EMI. When we got increment some people purchase car, some changes cars very frequently and kept paying EMIs and leaving no scope for investment. Its not a right strategy, start investing towards a goal (like for retirement, house, car etc)  and when you reached their use this fund for that goal only, by doing this you will be never  in EMI trap.

7. Past experience

Some people starts trading thinking it is investment and lost money. Due to this they start thinking that they will loose money and stay away from real investment. Always remember investment is a long term activity, don’t treat short term earning mode as investment.

8. Treating Insurance as investment

Some people miss-guided by so called expert and purchased endowment insurance, money back insurance or ULIP thinking that it is investment but what they are not understand is the people getting rich by this is Insurance Company, Agent. Always treat insurance as cover and always choose pure term insurance for life cover. Remember “Mixing Insurance with Investment is like drinking and driving”. ULIP is a investment product but due to its expense structure better to stay away from it. I will cover Insurance and ULIP in separate blog

Please share your view.