Investments, Market Linked
People prefer to stay away from investing due to one of the following reasons;
- Maybe due to their past failure experience
- Or due to the horror stories, they have heard from their friends, family who have failed at Investing...
- Social media posts by people who have failed at investing
The most important question is that, why do people fail at investing?
The following are the five reasons why;
Reason 1 - Greed
Almost all individuals, who have had an inadequate or unhappy investing experience, were looking for unrealistic returns on their investments. Hence ended up choosing a riskier investment strategy, resulting in massive losses due to market fluctuation.
A return higher than 6 - 9%, cannot be consistently achieved by regular savings plans towards retirement, college education or for any other long term goal.
If a banker or a financial adviser promises more than 9 % return on your savings plans, stay away from him.
Reason 2 - Seeking Instant Gratification
Almost all regular saving plans in UAE are for five years and above, for a purpose. Your investment needs time take advantage of the market growth and provide a consistent return.
Your savings plan is not like fast food that you can invest and seek returns immediately. It is more like a fine dining meal; it does take some amount of patience before you savour the excellent meal.
An ideal saving plan should be between 5 – 15 years, not more not less.
Read : How to invest money in UAE, using 3 Bucket Investment Approach?
Reason 3 - Wrong Advice
Be very careful in choosing your financial adviser, by obtaining the necessary information like his experience, about the company he represents, and his testimonials from his satisfied clients.
After obtaining the relevant information from the prospective financial adviser, do your own due diligence by referring to LinkedIn to cross verify the information provided.
Most of us choose to sign up for an investment/savings plan from a bank, which may not be the right approach.
A retail banker is not an expert in investments and has many other products and responsibilities to focus on. He may not have the time to track your investments regularly and suggest suitable changes if necessary.
When looking to set up a savings plan, talk to an Independent Financial Adviser, who is not biased to one particular Insurance or an Investment company and then choose the most suitable plan.
Reason 4 - Lack of knowledge and or involvement:
While your work and family take away most of your time, it is also essential to set aside time to fully understand the terms of the investment plan, before signing up.
Demand for the terms and conditions of the scheme. Read, clarify and fully understand the implications of the various clauses stated on the terms and conditions.
Once you are satisfied with the answers and you are confident that the plan recommended will help you achieve your financial goals, then only sign on the dotted line.
Reason 5 - Lack of review
Once you have setup the investment plan, the due diligence should not stop there; review your investment performance at least once in 3 months to ascertain if it is progressing as desired.
While setting up your investment plan, agree to a review schedule, with your financial adviser. If you are unable to meet personally, have your financial adviser email you the statements. Conduct a telephonic review of your account.
If you can’t take the time to track your investment, then you are encouraging your adviser to ignore your account.
Expert Help
A good financial adviser can help you achieve your goals with the desired ease.
As an Independent Financial Adviser, I make sure that my clients' setup and maintain robust investment plans, for achieving their financial goals like
- Retirement / Financial Independence
- Children’s education
- Property investment,
- Starting a business, etc.,
I can also help you achieve your financial goals with the desired ease, minus the miserable experience and horror stories.
Call me on +97150-2285405 or register to arrange a Free consultation.
