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Here’s why investing may not be for everyone

A number of factors can affect the financial path a person originally intended to take.



A lot of investing advice being discussed in many financial articles points out mistakes that people make when it comes to managing their money. Most of the time, financial experts sound like they are reprimanding people for not thinking about growing their wealth. At times, their advice, particularly when it comes to securing nest eggs, tend to become more of a blame game rather than offering solutions.

Only a few understand that there are factors which gravely affect how people manage their money. These factors are mostly issues which are beyond people’s control.

Often, nest eggs are being wiped out by unforeseen events such as blizzards, floods, hurricanes, and landslides. For some, savings are used up on treatments for family members who have fallen ill.

Severe conditions affecting people’s finances

A country can affect people’s perception of spending, especially if they are born in a region where dire economic challenges are rampant. For people who grew up in poverty, investing or diversifying nest eggs would be the least of their concerns.

In some remote Southeast Asian countries, the barter system remains in effect. People exchanged goods and services without using currencies. For these individuals, financial literacy remains a vague concept.

People living in more developed nations may be luckier. Still, financial institutions where they can put their savings may not be safe from corruption or fraud.

According to the Corruption Perception Index 2018, Denmark and New Zealand ranked the least corrupt countries among 180 nations surveyed for the study. The United States ranked 22 and the first large economy to appear in the least corrupt category.

Where you live actually affects your view on spending. (Photo by otnaydur via Shutterstock)

If corruption is rampant in a region, people may become suspicious of financial institutions. Worst, those who trust and invest money in business may find themselves the victim of the same company they trust their investments with. Case in point, retirees found themselves at the back of a long line of creditors after they invested in Enron stock but the latter lost as much as $2.1 billion in mismanaged funds.

Personal struggles that make savings extra challenging

For some, unsuccessful marriages can take a toll on their finances. On top of losing real estate properties and bank savings based on conjugal laws, there are also high attorney’s fees to pay as the divorce case goes on.

For others, unsuccessful careers hinder their capacity to invest or grow their savings. There are many who are living from paycheck to paycheck. Most of the times, they resort to borrowing money when emergencies happen which make it more difficult for them to invest.

Some are even compelled to take double jobs to supplement their incomes. Still, they are left with not enough money to sustain even their basic needs.

Advocating financial literacy

Financial literacy remains a high concept for the majority of people. For one, the seemingly financially literate country, the U.S., has about two-thirds of its adults who failed a basic financial literacy test given in 2016.

If a large economy like that of the U.S. has this problem, we could only imagine the worst for some economically challenged regions.

With this, experts may take a step back and examine carefully the real condition why many people failed to save or shun investments entirely. Instead of blaming them for not being too wise to save for the future, perhaps the best step to take is to educate them on how to overcome obstacles that hinder their willingness to invest.

(Featured image by Africa Studio via Shutterstock)

Anthony Donaghue writes about science and technology. Keeping abreast of the latest tech developments in various sectors, he has a keen interest on startups, especially inside and outside of Silicon Valley. From time to time, he also covers agritech and biotech, as well as consumer electronics, IT, AI, and fintech, among others. He has also written about IPOs, cannabis, and investing.