You stand in the way of wealth creation by procrastinating
It was a casual conversation with a 20-something friend of my daughter that sparked this article.
When I asked her whether she had started investing, now that she had started working. She replied that she was earning “peanuts” and that she would start investing later when she has more money.
Her answer was a revelation that many people still consider that one needs “lots of money” to start investing
But was it really a lack of funds or a cognitive issue that was at work?
Procrastination, the Silent Saboteur
What's the Holdup?
Procrastination is more than just a delay; it is a self-defeating behaviour that can have serious financial consequences.
From delaying investments to missing out on opportunities, it's a habit that can cost you dearly.
What Makes You Procrastinate?
Procrastination often happens because you become overwhelmed by the size of a task.
The way to resolve it is to start. Because if you just start an activity, your mind will be anxious to complete that activity. This anxiety can be a driving force to overcome procrastination.
The Magic of Compounding: Start Small, Grow Big
It's Not About the Amount
It's not the amount you invest but the consistency that matters. Even small investments can grow into significant sums over time, thanks to the magical impact of compounding.
The Power of Starting Early
The sooner you start, the more money you'll have when you retire. Investing in a portfolio can generate returns that grow over time, allowing you to reap the benefits of starting early.
Procrastination isn't just about putting off tasks; it's a silent saboteur that can rob you of financial success. Discover how to break free and build wealth.
Overcoming Procrastination in Wealth Creation
Recognise the Signs
Are you an investor who procrastinates too often? Common signs include saying "I don't have the time" or "I will do it tomorrow." These excuses can lead to time and money lost.
Take Action
- Set Goals: Know how much you want to save and work backward.
- Create a Routine: Like overcoming the snooze button, create a routine for saving.
- Start Small: Even small investments can lead to big returns.
The Real Cost of Procrastination
Lost Opportunities
Procrastination leads to missed opportunities. Whether it's a market downturn or a bull run, delaying decisions can cost you heavily.
Impact on Retirement
Procrastination in saving and planning for future financial security translates to a loss of potential earnings. The collateral damage is that you start late in investing and lose the advantage of the power of compounding.
Emotional Toll
The emotional toll of procrastination is real. It's like a credit card: fun until you get the bill. The anxiety and regret associated with delayed decisions can be overwhelming.
Practical Steps to Break Free
Educate Yourself
Understanding personal finance might seem hard, but there's plenty of information available. If needed, hire a financial planner.
Automate Savings
Consider opening a specific savings account and create a standing order to automatically transfer part of your salary.
Embrace Systematic Investment Plans (SIP)
SIPs are a smart way to overcome procrastination and the fears associated with investing.
The Side Effects of Procrastination
Procrastination investing can lead to last-minute tax savings and buying products that you might have never needed.
You may end up saving your money in accounts where inflation begins to eat away at the meagre returns, they offer.
Delaying things to such an extent that the benefits of starting early are lost can cost you heavily.
The Psychology of Procrastination
Understanding why we procrastinate is essential for success.
Fear of failure or a lack of understanding frequently holds us back.
We can address these underlying emotions and move forward by recognising them.
Creating a Future Without Procrastination
Creating a future free of procrastination necessitates a shift in mindset and behaviour.
It's about recognising the significance of acting today and not allowing fear or uncertainty to hold you back.
By taking small, consistent steps, you can create a future in which procrastination does not deplete your wealth.
What You Should Do
Procrastination in wealth creation is more than just a delay; it is a roadblock to financial success.
Fear, overconfidence, or simply procrastination can all have a significant impact.