Why Most People Don't Invest (Even Though They KNOW They Should)

Hey there. Real quick, before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience Live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Why is it that so many people know they should be investing but still don't, and they don't take the leap? So listen, if you've ever felt hesitant, overwhelmed, or even afraid to start investing, you're not alone. There's a ton of confusion out there and fear of making mistakes, it can be paralyzing. I know for me that it was at times also. But here's the thing. That hesitation is literally could cost you far more than you think. It's not just about the missed opportunities, but it's the lost time, it's the lost security, it's the stress. It's the future for you, for your family, for your legacy. And in today's episode, I'm going to break down the biggest reasons people avoid investing. And even though they know that it's the right thing to do, they still don't do it. So then we'll break down. More importantly, how to go about overcoming the roadblocks, making the right investments that work for you, setting yourself up for true financial freedom without the risk of betting it all or feeling completely out of control.

All right, let's be real. Most of us know we should be investing. We've heard it from friends, we've heard it from family, we've heard it from advisors, we've heard it from me. We see the potential for growth. We see the promise for our financial future. We see the ability to have financial security, but we still don't invest. Why is that? Well, I think that there's some common reasons that people shy away from investing. And it doesn't matter whether they know that it's the right thing to do or not, they still shy away from it, including yours truly. I did for a while. Okay. Until I figured it out, until I saw the problem with that. And so let's jump in. I'm going to just jump in and break down the reasons I see people will shy away from investing and what to do about it. All right, so the first is this.

It'S the big F word, okay? Fear. It's the fear of losing money. And.

A lot of people will equate investing to gambling and this feeling like they're betting on something that's uncertain and that it's scary that they're going to lose their money and everything. But investing is not gambling. When it's done right. Is there risk? Absolutely. There is a risk in every investment. But it is a calculated risk. It is a strategic risk. And when you do it right, you start to see how, how the probabilities of success are far greater in your. In. In your favor than otherwise. Okay, we're not playing games of chance here. We are, we are playing and working the market. And stocks, the stock market goes up 8 out of 10 years. If you look at just historical averages, when you invest in a broad diversified portfolio, 8 out of 10 years is going to go up. And if you look at any 20 year period of the S&P 500, it has never had a negative return. So when you invest long term, that's when you have the highest probability of success. The challenge is, what happens is that we get into investing, we make an investment, and inevitably, Murphy's law, as soon as you buy the stock, it drops. You freak out. You say, I'm, I shouldn't have made this investment. See, I should have made it. Bad investment, bad investment. Your emotions take hold of you, the fear. And you sell. So you bought, it dropped, you get scared, you sell, you take a loss. You say, see, I'm not good at it. And now you tell yourself stories and you don't come back. Okay, I was there. I did it too. Okay, I do too. And, and it's, it's a challenge. The, the key is this. Once you understand that the longer you stay in, if you do it properly with a diversified portfolio, the, the, the more you reduce the chances of loss and the possibility of gain. Okay, so. And I go through a whole thing called the, the, the stack of fear in my, the beginning of my book and building your money machine. So fear, especially finances, is typically a result of the lack of something, something's missing to allow you to make a powerful, empowered decision. And there's six elements there I talk about in the book. When you get through those, now all of a sudden you can make an empowered decision because you're truly informed. Fears, usually when it comes to finances, comes from a place of not knowing. So we got to get you that knowledge. We got to get you what's missing in there. So that leads me to Number two, typically, is knowledge, okay? In the sense of, of understanding, if you will. Why people don't invest is because they lack knowledge, okay? They lack the understanding, the look. If you, if you watch any kind of the finance channels, they use nomenclature and jargon and all that stuff that makes it feel complex. You know, you got, you got puts, you got calls, you got the bid, you got the ask, you get the, all this stuff. Yo, it confuses you. It confuses me. The challenge is that when we feel complexity, we don't do anything. And, and so the language of stocks and bonds and mutual funds and investing can feel overwhelming. And so you, you are afraid to get it wrong. You're afraid to look dumb or ask dumb questions, so you don't do anything. I've been there. All of these. I've been there. And so what happens is the tendency is that until I feel like I'm an expert, I'm not going to get started. And therefore you delay investing. Which time is the greatest lever on creating wealth? Think about it this way. If I invest a dollar at 20 years old, it goes up 88 times. If we just put it in a diversified portfolio based on historical averages, 88 times. By the time I get to.

Retirement age, if I wait from 20 to 25, that cuts in half to about 44 times.

So our waiting until we're comfortable is costing us dearly on the wealth creation side of things. But the truth is this. Everyone has a learning curve, and we start with basics. The truth is also the fact that building wealth is simple. There's some basic fundamental principles. I talk about them in my book and on this show that when you have an understanding of the principles, it's simple. Now, it doesn't mean it's easy. Look, I get it. You may have debt, you may be struggling. Just check to check all that stuff. That doesn't make investing complicated. It just makes the situation less easy. But it doesn't make it impossible. Just because it's difficult doesn't mean that it's impossible. And so everyone building wealth investing is a learnable skill. Everyone has the ability to learn. Everyone has their own learning curve, okay? And so, so that's the second reason I think people don't invest. The third reason.

Is they're so focused on instant gratification. Look, I get it. You know, we're wired to want things now, and we're wired to say, I want to enjoy my life now. And investing requires you to put money away for the future. It requires you to delay gratification. It Requires you to go plant seeds today that you know will take years to grow until you can reap the rewards to make that happen. And for. And that's hard for some people, especially in today's world. And I, I understand that. This is exactly why I think it's important that when you are putting a financial plan in place, when you're putting an investing plan in place, that one of the line items in that plan, we do this for our clients all the time, is the fact that you have to plan for joy points. You have to plan for gratification day. Now, I'm not talking about momentary pleasures. I am talking about the sustainable joys that really fulfill your life. Like with my wife and I, I've used an example before, but it's the truth. One of our biggest fulfillment kind of experiences is when we travel together. So when we build the plan, when my team builds a plan, when we work through it, there is a big budget, a big budget line item for our travel, for us to go create those experiences and do that. So I want you to be able to create the plan so you enjoy the journey to financial freedom as well as the destination. Because here's what I know. If you do not enjoy the journey to financial freedom, you will not enjoy the destination. You will not have created the, the traits, the characteristics and the habits to not only build wealth, but to enjoy wealth. And there are commentators out there that say, no, you're on beans and rice, you're on Mac and cheese, and you just, you just live, live, live. And you, you save and you do nothing else. Like that's a miserable existence. I get it. I don't want that, and I don't want it for you. And I don't think it's necessary. Doesn't mean that you'll have to work at it. It might based on your circumstances, but with the right plan, the right principles, the right system in place, you can make it happen. All right? Number four is analysis paralysis, okay? You get caught in this endless cycle of waiting for the perfect time to invest, for the perfect investment. Everything. I got a spoiler alert. Ain't no such thing, okay? The data shows that trying to time the market. The data shows that, that no one, including the best.

People, the big hedge fund traders that have the best computers, the best information, the most sophisticated stuff, they got the best analysts, they got the best data. They don't know when the top of the market is, and they don't know when the bottom of the market is. And the fact is that you cannot Time it. The fact is that the only way to win the game of wealth is to be in the game, playing it consistently, not deciding, well, I'm going to jump in now and I'm going to jump out now. Okay, that's not investing. And, and so it is important to really start to build up. In fact, statistics and data show that over the last few decades, if you are jumping in and out of the market, in and out of the market, and you happen to miss the 10 best days of the market, the 10 best days of the market over a 20 year period, hey, it will literally cut your returns in half versus had you just gotten the market, stayed in the market. Instead of trying to time the market, stay in the market. So a lot of times we're analyzing and we're not making decisions. We have to take action. Well, dollar cost average in, we'll start small. There's a lot of things I'm going to walk you through to do, but stop overanalyzing. We got to get in because there is no perfect time. Okay. Other than now. Okay, number five. And I get this risk aversion and I'm going to put in here also trust. Who do you trust? People don't trust the market. People think that the market might be rigged. They see headlines about crashes and recessions and, and, and everything. And, and instead of doing anything and understanding, they say, well, screwed. I'm just going to avoid the whole thing altogether. But the reality is that a properly diversified portfolio will spread the risk across the assets and sectors in a way that's, that actually reduces substantially the risk of loss. Now is there a, is there risk? Absolutely. There's always risk in investments. Now is there a chance that everything will go to zero when you're in a diversified portfolio? Not likely. I mean if there is, we've hit Armageddon. It's a problem. It just, that's, that's why I tell people at the very beginning we don't pick and choose individual stocks. There's too much risk involved because you are concentrating everything in a single single thing. It has to go up for you.

But when I go into a basket of stocks, especially at the beginning, until I have critical mass into my, into my portfolio, I'm investing in 500, a thousand companies. Are some going to go bad? Yeah. Are all going to go bad? No. And it's been proven over decades to be that way. And that, like I said, market goes up 8 out of 10 times 8 out of 10 years. And the average return on the s and P500 over the long term is somewhere between 8 and 12%. And when we do that and we have a critical mass to our portfolio, we actually have ourselves in a, in a space in place to weather any kind of downturns because we're coming at it from a long term perspective. Okay, those are the thing reasons that I see people not investing now. What's the impact if we don't? And then what do we do instead? Okay, so we can avoid investing for the rest of our lives if we want to. But the impact is horrendous because if you don't invest, you are missing on the power of compound growth, the snowball effect of your money making money. The subtitle of my book is getting your money to work harder for you than you did for it. That's the key to investing is allowing my money. Here's the deal. The only way you're ever going to be financially free is when we are a successful at separating the earnings that we make from the efforts to earn it. If you are constantly on that treadmill of earnings, running it, running it, running it to make money. And that's the only way you make money, the only way is to stay on that treadmill for the rest of your life. What I want is that we build the money machine.

To allow you to sit back and say the money machine's making money and my money's making money and I can choose to get on the treadmill or not. I get a chance to choose to do what I do. It's a blessing and it's, it's a privilege. And it's a, it's a, it's, it's what I've been able to build, that I want you to build. It's what I've helped my clients build, my son build all that stuff. So over the last century, the stock market, like I said, has returned about 10%. And compare that to if I just put the money into a savings account, you're going to get less than 1%. Yeah. Can I get something in a high yield savings account now at four or four and a half percent? Yes. But it's not long term.

That's not going to sustain you. When you get to your later years to your retirement age, we have to get in the game. And so, so the consequence of not investing is we don't build the money machine and we never become totally free. Okay. The second consequence of that is what it does to your life. Your options about what you can do from a lifestyle standpoint now become very Constrained and limited.

Traveling, retiring comfortably, retiring in a place of your choosing, those kinds of things become harder to do. But more importantly.

Choice of medical, health care, all those things become jeopardized, become, become problematic if you, if you're not careful because of the fact that you're constrained. My mother, okay, she just, we just lost her a little over a month ago, okay, 91 plus years old. She, she had health issues. Six, six plus, six and a half years on dialysis and everything.

But she had care and she had good care. And she had care because we were able to make sure she had the financial wherewithal to take care of it. And her care was not cheap. We were paying, in the end, 15, $16,000 a month to make it happen.

If we didn't have the ability to do that, if she didn't have the ability to do that, what care would she have gotten? She wouldn't have lasted as long as she did, and the quality of her life would have declined even faster. And I think that when we choose to not invest, we impact our life down the road in ways that we can't fathom, we can't quantify. The third thing that I think happens is a family impact.

Investing isn't just about us. Investing is about shaping the future of the people we love, our family, our children, our grandchildren, the causes, all of that. Without the investments.

There is.

Little ability or less ability, if you will, to create generational wealth and pass it on to help your children, to help your spouse, to take care of parents, to, to do the things. So it affects us in a lot of different ways. And the consequences of not getting in the game.

Will be generational and not just for you, okay? And so it's important for us to get in the game to make that happen. Now here's the thing. What happens when we do this, right?

You get a whole host of amazing benefits because of the power of compounded growth. Your money, like I said earlier, becomes a snowball effect. It starts growing on top of itself and you reach financial independence and freedom and you get off the earnings treadmill. And now you've been on the, on the field playing the game. Ultimately, you win the game. You have to be in the game to win. You have to be in the game to win, and you cannot time it. You gotta do the thing. So what do we do? How do we start? What are the small action steps? If you're one of those that's sitting there going, I don't know, you know, I know I should be doing it, but I'm not doing it. Let's start. Let me give you some things to do. I'm going to give you some steps to, steps to take, okay? And the first is this, is that I want you to start small. I just need you to start. I don't care if it's $5. I don't care. Okay? Just start. Take.

Take $5 a week, put it in a high yield savings account, and then we'll move it into an investment account and put it into a, into some sort of ETF or index fund. But, but $50 a month can make a huge difference. $50 a week, $200 a month will turn into $300,000 down the road. So just start small. Creating wealth and money is, is a habit. It's a muscle group. And I need you to just start exercising the muscles. When you start to exercise the muscles, like I said, Even if it's $5, you're exercising the muscles, you're creating the habits that, that need to happen. And play. I've got a couple of episodes that, that you can go back and watch about saving your first 10,000, the framework for saving your first hundred thousand, and those kinds of things. Because once we get you there and develop the habits, the skills and all of that type of stuff, it's going to drive things. But I just need you to start. If you are working for a company and that company has a 401k and you're not participating in it, participate. Especially if they're matching, they're giving you free money. Go get the free money. Pick it up off the floor. Let's do it. Start small. Number two, okay, is educate yourself. You're here, you're doing part of that. Follow the show. If you have not subscribed to the show, make sure that you're subscribed to it. Do me a favor, also share it out. Do this with someone.

Educate yourself. Learn the basics. Don't get all complicated. Don't get all, you know, caught up in all the crazy, you know, strategies and everything. Just the basics. If you looked at my portfolio and the things that I do, it's the basics and it's, it's a big portfolio. It's still the basics. Okay? Learn the basics. What are stocks? What are bonds? How to use them? Follow it. If you, you don't have a place to start, start with my book, Building your money machine. Get the book. I walk you through the basics of money management, of building a plan, of investing, all of it. I walk it through, I give you the framework of what to do with every single dollar. Okay? It's going to help you become more confident. You have to start educating yourself. Okay, that leads me to number three, which I kind of mentioned. Follow a process. There are proven processes and principles that drive and build wealth. When it comes to investing and wealth building. If you don't have a process, I want you to. I, I'm going to. It's a plug again. I want you to get my book, follow the process of the wealth, wealth priority ladder and everything. You got to follow a process. You got to know what each dollar is doing for you, what it's meant to do, how to put it in play. So if you're not following a process, follow mine. If you're not following mine, follow a process. Either way, get a process in place that is going to work for you until you can create your own process. But you know what? There's one that's proven. Why recreate the wheel? Number four, to make it easy. I want you to use some of the tools that out there. Okay? Now I have a bunch of tools on my website too, but, but take advantage of the tools that are available to you. Things like robo advisors and apps that step by step will guide you. You don't need to go this alone. You can get, you can get the support. Now let me be really clear. There are a couple of things that I do not want you to get caught up in. Any app or any, any tool that gamifies investing, I want you to avoid. Okay? I'm going to pick on them. Robin Hood. Okay? Robin Hood. When they are showing fireworks and all that stuff, when you invest in this net, what they're doing is they're playing with your emotions. They're creating a dopamine hit. And that is an addictive thing that gets you to do more and more now. It gets people to over trade, over, transact, overdo things. I don't want anything that is triggering emotions in your finances. Your emotions come into your finances, your financial intellect goes down. Okay? So we keep emotions out of it. We make proper decisions based on proven principles and a system to follow. So I avoid all apps that gamify the investing process. Okay? All apps that gamify the investing process are off limits for me and my clients. So I use, I use the fundamentals. A Schwab, a Fidelity, a Vanguard, the proven long, long term. And they have robo advisors there that you answer the questions. You, you go through a risk profile. They help you set up what your investing portfolio looks like based on your Answers. And you can get in the game until you grow enough critical mass that you, you want more bespoke or customized.

Advice or you grow in your financial literacy. But use the tools to your advantage to make this, make this easier. Number five, listen. Consistency over perfection. You will never, ever have enough information to make a completely informed decision just the way it is. I would rather make sure that I've got all. So I have an investing criteria. I talk about them. The book I talk about in my training. I work with my clients on it. We have the rules for investing, and I tick those off. If it doesn't satisfy all my rules for investing, I know I don't invest. Does it capture everything? No. Do. Have I lost money? Yes. Am I happy? No. Does it destroy me? Heck no. Okay. But I am going to continually invest every month. I am constantly buying. Market goes up, I buy. Market goes down, I buy. Okay, that's. It's dollar cost averaging. It's something that, that we do. But I look at it. Instead of me sitting back going, I got to find the perfect investment, the perfect moment for the perfect environment and do it perfectly. Forget it. It's not going to happen. You'll sit on the sidelines the whole time. Listen, you don't win the wealth game on the sidelines or the stands. You win it by being on the field. Okay? Get on the field, but follow the system, follow process, follow principles. Okay, that leads me to the Last1. Number six is plan and diversify. I do not want you going at this with some haphazard quilt that you're putting together and say, I'm going to invest in this. I this. Because here's what's going to happen. You're going to go out there, you're going to be watering the lawn, talking to your neighbor. Neighbor's going to mention a stock you're going to run in, you're going to get your app out, and you're going to go buy that stock. No, that doesn't work. The plan, it's. There's a reason in my book, we start with the plan first. The vision for your life. The vision for your life should inform all the decisions for your life. The vision for your life should inform all the decisions for your life. When we do a money machine master plan for our clients, we build out their life. Give us the vision for, what do you want? What do you want it to look like? How much do you want to travel? And we build the, we build the model for them. We build the plan for them to make that Reality, you have to have a plan. You have to move to a plan. It doesn't need to be complicated. You can do it on a spreadsheet. You can do it on a piece of paper, on a legal pack. You can do a money, a money machine master plan. You can do that because then with the plan, you can make informed decisions strategic to the plan, to make the plan a reality. Now the plan is going to change. That's okay. But without a plan in place, you're making decisions on a whim, and those will typically go astray. Or what happens is that you might find yourself off in a direction you never intended. Okay, so then with the plan, we then build that diversified portfolio to mitigate and reduce the risk. So you can consistently do this with peace of mind. And over time, over time, not only do you sit back and go, I know I should be investing, you are investing and you feel good about investing because in the end, that's the thing that, that, that is going to come out of it. You change your life, you change your future, you change your family's life, you change your legacy, you change the trajectory of everything you do. I truly believe that financial freedom is your birthright. I truly do. Okay, now we just got to go claim it. We live in a society that demonizes money. We live in a society that, that.

Hammers on being wealthy. You know what? I know a lot of wealthy people, and they're good people and they give back and they, and, and they, they give and they're generous and, and all of that. And so I want that to be you. I, I, I think that that's your, you're entitled to that. It doesn't mean that it's easy. It might be a journey for you depending on where you're starting out, but it doesn't mean that it's impossible either. So I'm here to support you. I'm here to light that light, to shine the light and give you some of the principles, to give you some of the systems, to give you the simpler path to taking and mastering your money so you can eliminate financial stress. Live a life of choice. Because investing doesn't have to be scary, it doesn't have to be complicated. It's about taking small steps consistently over time. And trust me, your future self, family, your legacy will thank you for it. In the end, you have to be in the game to win the game. I hope that this helps. I hope this gives you something to think about, some steps to take. And if you aren't, make sure you're subscribed to the show and if you have comments or questions, make sure that you let me know. All right? I'm here for you. I want to keep shining light for you. I'm on a crusade to light the light, light the light on the path to financial freedom for a million families. And I want one of them for you. All right? Until I get a chance to see you on the road to your financial freedom, always, always strive.

Thank you for listening to the Affluent Entrepreneur show with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affirmative Affluent entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

And that's it for this episode of Building your Money Machine where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you'd do me a favor, go to Apple, Apple Podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright and I want to help each and every one of you claim it. Thanks so much.