What Stops Us From Getting Rich?
Taking a few basic steps can help us build substantial wealth over time. Why then do so many hesitate?
“I start early and I stay late, day after day, year after year, it took me 17 years and 114 days to become an overnight success.”
- Lionel Messi, Footballer
Success is 10 percent inspiration and 90 percent perspiration. However, people are now so used to vending machines, instant coffee, and social media, that they apply the same need for instant gratification to more meaningful outcomes – measuring professional success or the return on their money. For some investors, ‘long-term’ has squeezed into a six-hour time frame – 9.15 a.m. to 3.30 p.m. – that is the time the Indian stock market is open for the day.
Wealth creation does not come easy. In the current market environment, systematic investment plans that have been built over two years are not delivering expected returns. This is prompting some investors to stop their SIPs, when it’s actually the time to step up.
Information Overload
We are often buried under the barrage of the day’s news, especially through social media. One negative report which goes viral in seconds creates havoc, sometimes unnecessarily so. When we set an air conditioner in the room to auto mode, the thermostat constantly sends us signals whether to keep it on or switch it off. Similarly, our risk temperament is constantly being signalled by the information we receive, via the news, WhatsApp forwards, or Twitter etc.
Often, we come across news headlines that describe how much money investors have lost in a day. Even if we have not made any investment that day, we start stressing about our retirement plan that has been constructed after thorough consultation with a financial advisor, and is slated to mature in the next 15 years.
Averse To Change
Have you ever heard of anyone who made it to the ‘richest people’ list after winning a million-dollar lottery? Unlikely. Someone’s view about money and putting it to work with investments is unlikely to change overnight, before and after winning the lottery.
We are often averse to change, reluctant about trying new products or investment strategies. We continue to put money in the same products where we have had a good experience in the past. Well, it’s not a great idea to be stuck to fixed deposits when you may have moved to the highest tax bracket.
“Success leaves clues,” says the American self-help coach Anthony Robbins, and this applies to investing as well. If you are looking to create wealth, there are innumerable self-help books and tutorial videos that provide the basic lessons on investing. You can also visit a financial planner for more solid advice. Taking such steps can help you build substantial wealth over time.
But many of us shy away from these simple steps, because:
- Nobody in the family, or among friends, has done it;
- A fear of rejection if we go and ask for advice;
- It might change our pre-set notions about investments, and therefore we avoid it.
In contrast, how do those who invest well approach wealth creation, making them different from the rest us?
- Risk is their friend, they find opportunities in risk.
- They are committed to the goal.
- They have a lot of discipline and patience.
- They do not follow league tables that highlight last week’s best-performing funds!
Every day, the Bloomberg Billionaires Index updates its list of the richest people in the world. Here’s a thing to ponder... have you ever seen any famous actor or footballer being listed, even though they earn millions every year? The answer is no. In fact, the people who are on the coveted list are either entrepreneurs or investors, the likes of Jeff Bezos, Bill Gates, or Warren Buffett.
All these people have only two things in common.
You too can dream of becoming rich. As the American entrepreneur, investor Robert Arnott says “in investing, what is comfortable is rarely profitable.”
Amit Bivalkar is the Director of Sapient Wealth.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.