Concept Advisory Services

• Why Many Aren’t Securing Their Financial Future

  Posted: April 26, 2008, 3:47 pm by admin

  Most people know they should invest, just as most people know they should watch their diet and exercise. Nonetheless, millions of people — I estimate that 80 percent to 85 percent — don’t invest at all. What I mean by this is that these people aren’t active investors.

  An active investor is someone is someone who actually lives off their investments as opposed to wages from a job..

  It’s similar to the difference between amateur and professional golfers: Amateurs may be very good players, but can they live off their golf game? A professional can withstand the heat of competition and has the mental toughness and the physical skills to create a stream of income.

  At age 65, many amateur investors “turn pro” — whether they like it or not. And that’s a frightening thought.

  In this article, I take a humorous as well as a more serious look at why people don’t invest. This is a list of why people don’t invest — even though they know they should.

  Why People Don’t Invest: 12 Humorous Reasons

  1. They’re already paying into Social Security.(NSSF)
  2. Their budget includes k’sh 200 per week for lottery tickets, which is bound to pay off soon.
  3. They believe that inflation means their money will grow.
  4. Old people don’t eat much anyway.
  5. They sit at home waiting for the Publishers Clearing House van to pull up in their driveway and deliver their cheque.
  6. Their money is safely buried in the garden.
  7. Their rich Aunt Alice will die soon.
  8. Little Moses is sure to make it big in Nairobi.
  9. They’ll write a book and live off the royalties.
  10. They plan on marrying a young wife/husband when they’re 60 and depend on their financial support.

  Sometimes we need a break from the seriousness of why we invest and take a moment to laugh a little…or maybe cry. Unfortunately, even though funny, this list contains many truths.

  Apart from a light-hearted look at why people don’t invest, there are serious reasons for their inaction:

   
  1. They have an entitlement mentality.
  When the word entitlement is used, many people point an accusing finger to the poor and those on welfare. Yet, the sad truth is many people have an entitlement mentality. Starting with our President and working down, millions of people expect the government (or a business) to take care of them once their working days are over. This despite the shaky financial footing of Social Security and Medicare.

   I believe we should all learn to take care of ourselves. I agree and believe it’s about time our schools teach people to take care of themselves, rather than believe they’re entitled to government support.
  
  2. They lack vision.
  Millions of people cannot see past tomorrow. It was Tolstoy who said: “The most unexpected thing that happens to people is old age.” This year, the first Baby Boomers turn 60.

  As a young person, I hear many peers say, “I don’t have to worry. I’ll just keep working.” They don’t see that the day will come when their body cannot work anymore — if they’re lucky to live that long.

  The cost of long-term care exceeds what most people earn today. For example, a friend pays over 26,000 a month to keep his mom in a modest facility — that’s more than most families earn monthly. What’s going to happen when 5 million Baby Boomers start needing long-term care?

  Today, I also hear young people blithely saying, “I’m still young.” Whenever I have the opportunity, I remind young people that the Baby Boom problem is really theirs to finance.

  
  3. Our school system doesn’t teach us much about money.
  “Go to school to get a job” is common advice. But that idea echoes the entitlement mentality, the idea that once you have a job, the company and the government will take care of you. It also reflects a lack of long-range vision. Today, we need to be educated about money beyond just “getting a job.” We need to be educated for life after a job, after our working days are over.

  The entitlement mentality and myopic vision stem from one place — our schools and the lack of financial education in our educational system. It’s time for our educational system to enter the 21st century and prepare people for the real world.

   

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes