Why Are You Even Investing?

I read it once in an article that gym membership signup tend to grow quite significantly in January of every year. That is because that is also the time when most people make their New Year resolution. Yet, most people will quit within the first 3 months of making that resolution.

Why is that the case? It is because many times we do not have the core motivation within ourselves to continue going to the gym every day.

The motivation for investing is also similar. That is why before we even start investing, we should really ask ourselves what is the purpose of us investing? This is core because like staying healthy, investing only works if it is done consistently for the long term.

That is why if we come up with just a bad reason, we might very well end up like those who commit to a New Year resolution; we quit after some time.

So what is a bad reason? In my opinion, reasons like wanting to earn money or have passive income is not the best way to motivate ourselves. This is because money is only an end to something. Money by itself has no utility and is just a number.

To truly motivate ourselves, we might need to add in a more specific amount and utility for investing. For example, you might want to invest because 18 years from now, you are expecting to need about half a million dollar to fund your kids’ education fees. Or you want to be able to have a passive income from your investment because you want to be able sustain your lifestyle by pursuing your dream; be it traveling around the world or to start a risky venture. And that passive income amount that you need will be the expenses needed to maintain your lifestyle.

Lastly, one last important step in motivating to ourselves to continue investing for the long term is to include some actionable steps. For example, you might explain to yourselves that in order to achieve that passive income amount that you desire, you are going to invest in high dividend industrial leaders and keep reinvesting the dividend until the day your passive income fit your target.

Although knowing about the concept of investing and strategies that you can employ in your investment is important, knowing the fundamental reason and motivation to start investing is even more important. After all, you can teach a man how to fish but he has to be hungry for the fish first before he would willingly go fishing.

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The information provided is for general information purposes only and is not intended to be any investment or financial advice. All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and do not in any way represent those of his employer and other related entities. Stanley Lim owns Berkshire Hathaway B Class Shares.

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