Resistance to Investing
Recently, my company got someone down during one of our meetings to talk about saving and loans programme at a co-op. The rates are better than banks. Many people quite keen to sign up for the savings and fixed deposits. To them, earning 2% was a fantastic rate. However, there are other ways of growing the money. A few colleagues were simply resistant to do any single form of investing, except for putting money in fixed deposits that earned very little.
My colleague used to give free financial talks to the rest of the staff, just to introduce some tools to them. However, there are a number of people who are resistant to the idea of investing, simply because they know of people who had their fingers burnt before, or they think they don’t have money to start.
I wanted to introduce a simple cash fund at Fundsupermart to my colleague, just so that she can earn 1.5-2% more than what her money was earning in her savings account, and even then, she was very resistant to the idea. She would not even hear of buying unit trusts. Initially, the rates were ok, but they had been steadily dropping, which suggested the low interest rates at major banks. After a long talk, she was a little more open to the idea of that, but changed her mind when she saw how the rates were dropping. This particular cash fund had a risk factor of zero, which means that she would not lose a single cent if she were to put her money here, compared to other unit trusts which had higher risks. The only current drawback is that CPF interest rates are higher at 2.5%, so for those who put their CPF money here, they would be at a disadvantage.
Another person I talked to was keen to invest in shares, but his excuse was that he did not have spare cash. If this was a problem, he could use CPF since he did not have to pay for his house. Yet another person I talked to gave the same excuse that she wanted to invest, but did not have the spare cash.
I don’t understand why some people are so resistant to the idea of investing. There are many forms of investments with very low risks. Perhaps it is the same with insurance; too many people are put off by the idea of buying insurance, even though insurance helps people out in times of crisis. Perhaps with education, everyone will be able to decide on the tools better.
To ensure financial freedom, one should have a roadmap of what he or she envisions in the future, and then actively works towards the goals.
Sarah Tan - SingaporeProfit.com
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I totally agree! Even though I have very little savings, I am already playing around with T-bills to maximize my savings. While friends are laughing at me for earning peanuts using my pathetic savings, I am still pleased with myself for making my money work harder than their money.
Hi Junping, may I ask what are T-bills?
Yes, even with very little savings, we still have to grow our money. Some of my friends have more savings than me, but they are all sitting in the bank, without factoring inflation.
Nowaday, ppl seem to be stepping on investment. To me, in order to diversify rather parking my money in the FD, stock minor but most goes to my wine investment. Thou my friend does tell me why wine which need a period of time to see return. But over in saving n fixed deposit stuff, i do have to wait too. Why not just getting 8-10% per annum. after 24-30% after 3 year. This really shut my friend up which left him with no comments.