“Money itself isn't lost or made, it's simply transferred from one perception to another,” quips Gordon Gekko from Oliver Stone’s Wall Street. When it comes to investing for your future or even for short-term gain, the above adage carries a great deal of weight but is often ignored. When someone is asked why they are not investing, common responses include not having enough money or feeling it is not affordable or viable to do so. Here are some suggestions to turn the tide.
It’s money saved, not spent
When you're investing versus spending, as long as you do it wisely, the money is still there. Granted, in any form of investing, whether it be real estate, stocks, bonds, or collectibles, there is always an element of risk. Naturally, it is that risk part that also gives way to bigger rewards. While nothing is guaranteed, do not look at buying a stock or putting money into your IRA as an expense. The money is still yours -- its function has simply been reallocated from idleness to building wealth. Certainly, do not overextend yourself, and make sure you leave funds in your checking account to pay your bills, but do not treat your investing stash as a monthly expense or obligation. If you become neurotic about your monthly cash flow and how your automatic recurring investment is draining your paycheck, you will have significant struggles in building your nest egg. Remember: When you invest wisely, they money is always still there.Focus on value, not price tag
Every dime you spend can be looked at as an investment, whether it is buying a stock or buying a new suit. In the latter, which hardly seems like investing, perhaps the new suit might be for a job interview. A vacation with your spouse or close friends can be an investment in the relationship, so it comes down to what you get out of it, whether it be financial or personal. Investing in financial instruments or real estate is a little more cut and dry. A good example is how sometimes it seems like a stock is expensive because it carries a high price tag. Apple, for instance, is around $185 per share, so it seems extremely pricey compared to the plethora of stocks trading for pennies. However, you should ask yourself: Which is the better company with real prospects -- that is, which stock has the best value to focus on? In real estate, it is easy to justify buying a house out of your price range because it is a good investment. That may be the case, but are you more concerned with appearances than the real value? A $150,000 home in a less fancy neighborhood can also be a great investment. So, although you can afford the $250,000 home that your friends will be awed by, even if it is a good investment, ask yourself if the extra $100,000 is truly being spent on a superior investment or if it is being spent on stroking your ego.Change your mentality from observer to owner
Whenever you buy a new jacket or CD, you likely feel that it is yours and you own it. The same approach should be applied to your investments. After all, they are actually yours, so you should act accordingly. Just as you enjoy your new watch, you should also enjoy your investments. In the stock market, look for real companies that are in a field that you are passionate about and that you actually want to do some homework on. Apart from the stock market, investing comes in many forms: comic books, collectibles, stamps, and antiques can all be investments. If you bone up on those subjects and how to properly profit from them, your lifelong love of X-Men may have some investing merits, making the money you spend on the issues seem less like an expenditure and more like an investment.In short, if you apply the ownership mentality to your financial future, you should be able to experience more joy and fulfillment in investing rather than it seeming like a chore. Just as it is a great feeling when a girl compliments you on your new, expensive cuff links (might be worth the investment), it is a great feeling to research a company, invest in it and see it reap rewards.
Take care of yourself
One of the first rules when you run your own business is to pay yourself first. The same principle should apply to investing in your life and overall financial and personal health. For instance, many are saddled with debt, whether it be student loans or credit card debt. In either case, most debt is related to things that are done with and paid for. Even though the student loans may have helped you get your college degree, if financial freedom is not yours, it is easy to forget the value of that degree.In the case of credit card debt, you may still be paying interest on the 99 cent fries you bought six months ago. Each month, your creditors hit your bank account and seem to leave nothing left. If your cards are carrying high interest rates, transfer them to a lower rate and, this may sound crazy, but save a few bucks for yourself rather than sending it to the credit card company each month. Certainly, continue to pay your bills and work down your debt, but paying down debt for old things is akin to spending -- and you are spending each month on things that are long gone. That can be frustrating and make you feel shackled and unable to invest in your future. Spend to clear up your past, but invest in your future. Even if it is just $25, put it into a savings account or IRA or opt in to your 401(k) at work. In the latter, you might take a pay cut, but at least now the creditors have less to take and you are starting to build something for your future. Investing implies optimism for the future, based on the expectation that today's expense will reap rewards in the future; spending implies more of a three-and-out situation.
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