Why aren’t more people investors?
The reason is the same reason many people don’t start their own businesses. It can be summed up in one word: risk.
Many people don’t like the idea of handing over their hard-earned money and, possibly, not having it come back. Many people are so afraid of losing that they choose not to invest, no matter how much money they could make in return.
A Hollywood celebrity once said: “It’s not return on the investment that I worry about. It’s the return of the investment.”
This fear of losing money seems to divide investors into four broad categories:
- People who are risk-averse and do nothing but play it safe, keeping their money in the bank
- People who turn the job of investing over to someone else, such as a financial advisor or a mutual-fund manager
The difference between a gambler and an investor is simple. For a gambler, investing is a game of skill. And for the people who turn their money over to someone else to invest, investing is often a game they don’t want to learn. The important thing for these individuals is to choose a financial advisor carefully.