Why Am I So Stupid With Investing?

Are you frustrated with your relationship with investing? Does it seem like no matter what you try, your investments don’t work out? I can understand that. But please stop asking yourself “Why am I so stupid?” Instead, consider the two major reasons why many people find themselves in a situation like this. My experience tells me there are two major reasons:

1. Wall Street Likes It That Way

There are some companies that make a lot of money as a result of you feeling incapable about your investments. They love that you feel inadequate because it opens the door for them to do whatever they like with your money. Not every financial firm does business this way. But too many do.

2. Investing is Counter-Intuitive

Investment success often demands sticking with an investment strategy even though you perceive danger or uncertainty. But human beings don’t like uncertainty. We want to avoid danger so many people take cover and cash out.  Pessimism helps us survive – but pessimists have a hard time investing.

So when people give in to their natural desire for security, it often results in selling their investments at exactly the wrong time. And when they realize what they’ve done, they feel like dunces.

Both of these problems are easily solved.

How to Overcome “Block Head” Syndrome

1. Revolution

You may or may not understand the way investments work now but that doesn’t mean you are a dummy. I happen to understand finance. But the list of things I don’t understand is far greater. So what?

Some brokers try to intimidate you because they want you to give them carte blanch with your money.

That monkey business stops right now. If anybody – and I mean anybody – tries to make you feel “less than” when it comes to your money fire them right then and there. You are the boss. Nobody is doing you any favors. Get mad as hell and take no prisoners. You don’t have to put up with these jokers one day longer.

2. Education

Financial concepts might be new to you but you can learn. It might take time to understand financial concepts but who says you have to master this stuff overnight? Nobody. Take your time.

3. Questions

The key to being the master of your financial domain is to make sure you ask the right questions. Here is a partial list of some of the most important questions you need to ask yourself:

What are your objectives?
When do you want to achieve them?
Should you invest in stocks or mutual funds?
How much will you need in order to retire and what is the best way to invest to get there?

The links above will help you answer these questions. Read those articles a few times. Also, subscribers to this blog get a free investment course on investing. Make sure to go through those materials as well. If you don’t understand all the concepts, and you work with an advisor, ask her to explain. Keep asking questions until you understand and don’t be embarrassed if you don’t get it right away.

If you don’t work with an advisor and don’t want to, you can learn as you go. Start slow but get into action. And don’t worry if you are just starting out and/or have a low balance to start with. There are companies like Betterment that can help educate you and get you started. This is a particularly good place to start if you have a modest amount to invest.

You don’t have to be an investing guru like Warren Buffet in order to feel adequate – or to make money. Don’t give in to other’s brow beating. Get educated and formulate the right questions. Seek out answers by being patient and steadfast. Then….get into action and don’t be afraid of making mistakes. If you do these things I guarantee that you’ll never feel like a financial less-than.