THERE IS ALWAYS AN EXCUSE

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We all like to make excuses. It is part of our nature, ingrained deep in the fiber of our being.

The excuses we make often hold us back because it is easy to make one without considering the long-term consequences. Making an excuse can feel small and insignificant in the moment, but like most things, it can compound over time.

There will always be an abundance of excuses in every aspect of life. When it comes to the excuses made around saving and investing, you must understand them and then breakthrough/overcome them.

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“I’ll start some day…”

Jerry Seinfeld has a great bit about “Night Guy and Morning Guy.” The Night Guy wants to stay out late but knows that tomorrow could be rough by doing so. Ultimately though, “That is Morning Guy’s problem!”

The two versions can never be on the same page. Night Guy knows the importance of heading home earlier to get some sleep for the sake of Morning Guy, but he can never do it.

The current version of you may not want to save and invest. It is more fun to spend money now and forget about the future. For most people, it feels so good to spend and difficult to save. It essentially becomes, "Investing? Retirement? That is a problem for future me to solve!"

Without sufficient savings, the future isn't so kind. As folks near or enter retirement, many people cite not saving and investing as their biggest regret. The future version of you will never regret saving and investing while you are still young.

Never put off to tomorrow what can be done today. When it comes to saving and investing, yesterday was the best day to start. Today is the next best.

“I don’t think I earn enough income…”

It’s a common myth that you need a significant amount of money to invest or that investing doesn't make sense until you reach a certain income level. In the days of high minimums for mutual fund investments or large balances to open an account, this was a legitimate issue for many investors.

Now, minimums for a certain investment vehicle are rare or easily avoidable and few custodians/brokerages have account minimums for the standard accounts (e.g., Traditional/Roth IRA, Taxable Brokerage Account, etc.). The use of fractional shares creates additional ability/utility for even the smallest of investors.

The amount you invest each paycheck or month shouldn’t affect your ability to invest. It is important to remember that even a small or incremental amount can make a significant difference.

I assume that The Wealth Span readers are among the elite savers and investors, so let’s assume you are saving $1,200 each month across all of your investment vehicles/accounts (e.g., 401k, IRA or Roth IRA, HSA, brokerage accounts, etc.). Over a 30-year time horizon at an 8% return, here are the results:

You did great! Do you think you could save an extra 25%, meaning you stuff an additional $300 into these investment accounts. The same assumptions apply, but now you are saving $1,500 each month. Here are the new results:

The additional $300 a month (a relatively small sacrifice in the grand scheme of things) will result in an additional $447,108 over the course of those 30 years. And of course, the growth doesn’t stop there. A longer time horizon would result in a greater discrepancy.

Thanks to SmartAsset for the investment calculator. It is a great tool. (These calculations are not guarantees of performance or actual results - only estimates based upon standard market assumptions).

Your total earnings may determine how much you can invest (to a degree) but don’t allow it to keep you from investing. Even a small amount saved/invested each month can result in a significant difference, so stretch yourself to start or to save a bit more.

“I don’t know who I can trust…”

This can admittedly be a significant barrier. Unfortunately, financial services professionals do not have the best reputation when it comes to delivering conflict free advice and a high level of client service.

There are a growing number of online resources for investors. YouTube channels, blogs, and newsletters can provide a solid foundation of knowledge about financial planning and investing.

There comes a point though, where you may be in need of professional advice and guidance. There are a number of reasons to hire a wealth manager/financial advisor.

Only you will know the right time to make this move. This decision can be based on a few broad principles. 1 - You should hire an advisor who is a fiduciary. This means they are legally required to act in your best interest at all times.

2 - You should understand how the advisor is paid. This is a key component of transparency. The fee schedule should be easy to understand. Simplicity is generally a good sign.

It is great to have someone you can trust for advice and guidance, but ultimately you are the one in control of your financial life.

Saving and investing should be a top priority. In the event you need additional help, the search to find a trustworthy resource is based upon a few foundational principles.

“I don’t know what to do or where to start…”

Once again, this is a valid statement. There is little done in the education system (high school or even college) to help explain the methods and merits of saving and investing.

Any knowledge of investing was likely gained due to your own efforts. For those with little experience thus far, there are now nearly limitless resources at your disposal to learn about investing.

For most people, the standard retirement accounts are typically the best place to store your funds due to tax advantages. Your contributions can be deposited without being taxed (a traditional account) or the growth/withdrawals can eventually be accessed tax free (a Roth account).

Once an account is opened, you must choose what to invest in. For the vast majority of people, an indexed mutual fund or ETF that tracks the broad market is the best tool. Warren Buffet recommends a comparable strategy for his wife after his passing, and it will be a solid game plan for you too.

You probably weren’t taught how to save and invest. You can join the club. The process of starting is simple and can be completed in a few minutes. Don’t allow the fear of the first step to hold you back.

“I think the stock market is a rigged game…”

There are those who believe that the machinations of Wall Street are not quite a random walk, but rather a coordinated game to exclusively benefit hedge funds, investment banks, and the extremely wealthy.

Technically speaking, the stock market is not rigged. It may feel like insiders and “smart money” have advantages. In some ways, this is true. There is insider trading at times and a number of other, less illicit factors that lead to some advantages for professional investors.

There is information asymmetry (i.e., hedge funds and the like have access to information that the average investor does not). The largest investors have access to capital and thus investment opportunities that the average, everyday person may not be able to reach. There is high frequency trading, and there are dark pools. These spaces are either a techonological impossibility or an impenetrable area for people like you and me.

Is the stock market rigged? Maybe it is and maybe it isn’t. Either way, it doesn’t mean that you don’t have advantages over the large investors and hedge funds. You don’t answer to others, only yourself. You don’t have to fear redemptions or operate on a quarter-to-quarter basis. You are in it for the long-term which is an advantage in and of itself.

Your distaste for Wall Street shouldn’t keep you out of the game. Play the game to favor your advantages and forget about the rest.

“I don’t trust the current market environment…”

You do not need a degree in economics and a decisive view of the future to be an investor. You don’t even need an opinion about what is happening in the present.

The market may be volatile on a day-to-day or month-to-month basis. Your plan/strategy is not a short-term play based upon the current moment. You are focused on the long-term growth of the economy.

It is impossible to determine if now is the perfect environment to start investing, the market is generally unpredictable. Despite this, you are better off investing today.

“I don’t need to invest because of my inheritance…”

Many people believe that an inheritance of any sort negates the need to save for the future. If there is some likelihood that you’ll have a significant windfall when a family member passes away, you may be tempted to change other elements of your financial plan.

The key word here is likelihood. Although it may seem inevitable, circumstances can always change.

The trust documents can be modified. Your family member could undergo an unforeseen emergency or expense that requires the use of funds previously intended for wealth transfer. Although it may seem impossible, your relative could have a change of heart and decide to leave the funds to a different family member or a charitable organization.

An inheritance is a wonderful gift and can be a lasting component of someone’s legacy. Be grateful but don’t make it the foundation of all of your financial decisions. Your saving and investing habits should transcend any expected gift via inheritance.

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TL;DR

Making any type of excuse is easy but typically detrimental. Don’t allow an excuse to keep you from starting to invest!

Saving and investing is a foundational element in your financial life. Time is a key factor in determining the growth of your investments and thus the overall success you can achieve.

Any delay in starting to invest is only holding you back, so overcome and start today.

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Do you know someone in your own life making one of these excuses? Forward the email to encourage them and to save them the trouble in the long-term.