Investing, the moral conundrum

·5 min read

None of this is financial advice and is strictly for educational purposes only.

When you hear the word investing, all you can think about is probably: Confusion, red lines, green lines, charts, gambling, stress, or for some, even bankruptcy. You can’t be blamed at all because when people first start investing, they simply think they can turn P100 into P1,000 in 24 hours. That’s a common misconception with investing; people who are new to it immediately associate it with gambling.

A quick Google search would identify “Gambling” as: “Playing games of chance for money, or placing a bet.” Subliminally, investing has characteristics of gambling but isn’t entirely the same. When you gamble, it’s usually a win-or-go-home situation, because you either win big or go home entirely (since you can potentially lose all your money).

As for investing it is defined in Google as a way of “Spending money with the expectation of achieving a profit or material result by putting it into financial plans, shares, or property, or by using it to develop a commercial venture.”

In theory, investing is playing the long game, while gambling is making as much money in the shortest time possible.

The name of the game is “patience,” and it begins by asking the rhetorical question. If you open your bank account every three minutes, will it magically go up in value every time you open it? I went through this and I can vouch for everybody and say that it doesn’t work.

Nonetheless, if you start investing, you will get to experience “compounding interest,” and statistical data has shown that as long as you stay invested in well oiled companies with great fundamentals, using a 10-year horizon, there is not a single time you will come out negative in your investment. Using historical data, you can have a positive return of up to 94 percent—this is using statistical data from January 1971 until December 2021.

Investing is making your money work for you instead of the traditional way which is you working for the money. If everyone figured out how to invest the proper way, there would be way less employees today.

When a person has the discipline and the patience to put in the work of investing, it becomes a personality trait that is timeless, because no matter what era or decade you live in, money will always be used to pay bills, take care of someone you love, and even have fun.

Some people invest half of what they earn monthly; others invest as little as 10 percent of their monthly income. The big idea is just to start, from as little as P50 to as big as P1,000. The comparison you have to make is not with these high net worth individuals like Elon Musk; the only person you should compare yourself with is your possible potential, which is the man or woman in the mirror.

The fundamentals of investing are simple yet complicated; others would say it’s simply complicated. There are a lot of reasons why people can’t invest. A lot would say “I don’t make enough money,” “I have children to feed,” “Gas is way too expensive.” All this is true, but how come most people complain about not having enough money as they sip their P200 coffee or milk tea?

There are investments now with the barrier to entry even starting for as low as $1 or P56. With everything in life, if you want to do something you find a way. If you don’t want to do something, you can also find a way.

There is a method in investing called “DCA” or dollar cost averaging. It basically means to buy a certain amount of a specific stock or asset in general, either daily, weekly, monthly, and even annually. This method is used by the most successful investors, as it takes the guesswork out of letting your emotions get the best of you. Emotions are not bad, but they can easily be used in a bad way. There is no one asset or stock that can save you from financial ruin, which is why research is the key to success.

Research means to discover a means of something that can benefit you or society tenth-fold, every asset class has its own pros and cons. Which is why it is up to people and their passions to decide what they want to invest in. For example, if you have a passion for a sport, you might want to consider investing in that sport. The juggernaut club Manchester United has a direct stock connected to the club. So look for those things in the specific sport you love. Another example would be for the artists out there, nowadays you can invest in your favorite paintings using fractional shares so you can start with as little as $1.

One thing is for sure that no matter how much you study or pray on the market, the individual may still never know what will happen next, whether it will go up, down, or round and round in circles. So you need to have that long-term mindset, because short-term anything can happen. This is why it’s important to control one’s emotions.

We are in a new generation, an era like no other. We can make bread if we want to, but work needs to be put in so that we can prosper. If you take anything away from this article, it’s consistency. Since it can beat intensity at any given day of the week. Invest in what you know, and don’t look back until you win.

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