Ever since I started my company many years ago, as I was operating in property industry, people always asked me these questions:
- Should I invest now?
- What should I invest?
- Where should I invest?
- How to invest in property?
- Is it the right time to invest in property now?
- Should I buy this project?
The above are the typical ‘WH’ questions being asked every time. I’m not blaming them for asking those questions. In fact, it is good for them to show curiosity in property investment. Or at least show interest in the concept of ‘investment’ itself. There are many reasons why people do investment. Some people invest because they want to build wealth for long term gain while some investing purely to make quick profit. There is no right or wrong for one to go short-term strategy over the long ones. At least, these people start to explore and willing to take the first step to invest.
Commentary podcast to the topic on Anchor.fm
The Problem with Lack of Understanding
What I see in many people why they don’t do any investment or don’t even want to talk about investment is that they have FEAR. Fear itself define as: –
If people didn’t feel fear, they wouldn’t be able to protect themselves from legitimate threats. Fear is a vital response to physical and emotional danger that has been pivotal throughout human evolution, but especially in ancient times when men and women regularly faced life-or-death situations.
Today, the stakes are lower, but while public speaking, elevators, and spiders don’t present the same type of immediately dire consequences that faced early man, some individuals still develop extreme fight-flight-or-freeze responses to specific objects or scenarios.
Many people experience occasional bouts of fear or “nerves” before a flight, first date, or big game. But when someone’s fear is persistent and specific to certain threat, and impairs his or her everyday life, that person might have what’s known as a specific phobia. – psychologytoday.com
People always see and hear how investors’ money burnt in investment. The message that they get was investment is very risky. Yes. That is partially true. All investments carry some sort of risk but not all of them are if we put some effort or investment in knowledge as much as the time we spent chasing money. Many people are technically trading their time for money.
We feel fearful is because we don’t understand the subject that we are looking at. I used to fear investing in stocks because of its volatility and lack of security. However, when I spent six months of my time learning value investing, my personal view towards stocks had shifted. Volatility is opportunity!
I no longer see stocks as riskier than any other investment. In fact, the opposite holds true when stocks is far less risks than running own business! The key is to only put our money in fundamentally strong companies.
Investment in Knowledge is the Key
I dare to say that, if we put enough time for investment in knowledge, we would see everything is equal. What I meant is that every investment will make us money. The knowledge that we gained from understanding a subject eliminates any doubts or fear that we have. Like I said before, I used to fear investing in stocks and all I know is only property. But now, I can invest in both without having any fear at all. What knowledge that I gained is essentially portfolio and risk management.
Here are few reasons why investment in knowledge is important: –
Knowledge provides dividends for life that nobody can ever take from you. The knowledge that you gained will translate into skills. That means you only need to learn it once. And use the skill to yield more income or return.
Increases your earning potential. When you understand the risks involved, you’ll make better decision.
Increases your return on investment. The newly acquired knowledge applied into an investment generally a calculated action in which you done a comparison or benchmark to know which investment is better and make sense to you. Hence, increasing your return on investment with time factor. We always take time into consideration as one of the determining factors on how fast we can get our money back or profit.
Improves the quality of your life and finances. The moment when you get paid from your investment (passively), that’s when your quality of life increase. You no longer need to trade your time for money as you used to.
Secures your retirement. This is the best part. Your time and effort spent for learning new investment knowledge pays when you are retired. One of the goal for investment is to build wealth that sufficient to give you income even though you are retired. That’s the financial goal right there.
Defends your portfolio from unnecessary losses. The skill such as portfolio management via diversification is a skill set of its own. Veteran investors know how to manage portfolio well. This will eventually reduce any potential risks.
Provides peace of mind around money. As explained before, investment in knowledge eliminates doubts and fear. An informed decision through thorough research and comparison of investment products making any investment easier without worries.
Conclusion
By now, you should be able to tell the importance of gaining knowledge in investment. You might take a little more time in learning new strategies but they are totally worth it for long term sake!
By the way, talking about investment knowledge, I had written a book recently and the title was Best Time To Invest In Property – Yesterday (It’s Never Too Early To Invest In Property). I highly recommend to those that want to start their investment journey in property. Within the book, I shared my research methodology in finding investment property. A systematic approach to make an informed decision to eliminate any doubt or FEAR when putting your money in the property. You can learn more about the book here.
