# Want to invest on your own but not sure how...



## Sherif (Apr 15, 2014)

Hi everyone,

I just want to get some feedback regarding investing on your own. I invest on my own and I love doing it. I want to teach others how to. But it seems like there is this brick wall preventing people. 

I just want to get some of your insight as to what you think are the roadblocks and preventing people from doing so.

thanks.
Sherif


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## alingva (Aug 17, 2013)

Sherif said:


> Hi everyone,
> 
> But it seems like there is this brick wall preventing people.


What do you mean?


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## Moneytoo (Mar 26, 2014)

Sherif said:


> I just want to get some of your insight as to what you think are the roadblocks and preventing people from doing so.


I'd say:

a) fear of losing money (that outweighs the prospect of making money)
b) lack of money/time/interest
c) indecisiveness


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## balexis (Apr 4, 2009)

d) lack of will to invest time to actually learn the basics of investing.

I'm terrified at the quantity of people I talk to that are so not interested in taxes/fiscal rules, RRSP/TFSA rules and so forth. They complain that their mutual funds do not perform so well and feel totally helpless.

Investing on your own is like anything else you do on your own: you need to spend time to learn how to do it properly. It's just that if you mess up in your DIY investing, you risk loosing much more than if you mess up repairing your vacuum cleaner.


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## Just a Guy (Mar 27, 2012)

I've found that most people are really interested in investing and making money...but to lazy to do it themselves (the learning how and doing part). They always seem to want someone else to do it for them. They want to just enjoy the profits, not do the work.

Another group of people can't handle the problems that happen with investing. The first time they encounter a problem or downturn, they want to quit...they don't understand that investing is work, not sitting back and collecting profits.

Then there is the group who always think of some excuse not to get started...."I don't have money to invest", I just bought my third big screen tv...


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## rikk (May 28, 2012)

And some people love jumping out of planes, and off bridges, and off cliffs ... all my engineering buddies that went out on their own hired advisers to look after their finances ... there's nothing _preventing_ them from doing it, there are just things they'd rather be doing, like pursuing a career ... so ... better things to do might be a roadblock.


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## mars (Mar 11, 2014)

I found that people really have a problem trusting themselves. I remember years ago when I first started working I was working for Coca-Cola. At the time the company had a company share save plan where we could invest up to 6% of our salary with the company adding in 50% for everything we invested. I started in the program as soon as I was eligible. Others who like me were recent business school grads were not investing. When I talked with them about it, they said that it was too risky as the share price was very low at the time. I was shocked, one of the first things you learn is to buy low and sell high and besides the company was giving us 50% free money so the shares would have to drop considerably to lose. My only regret was that I wasn't making a higher salary and could contribute more with the free money from the company. But it was surprising to me that others who had a business degree and should have known better were not able to see how good a deal this was and were not investing.


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## donald (Apr 18, 2011)

I think it's mainly because of the social conditioning to defer(esp when it comes to investing)The finance/business media does not help.
The financial institutions also have a vested interest in campaigning the masses against it(obvious reasons)
Lack of capital though would likely be the biggest reason(not enough funds to build a proper portfolio structure wise)
I think it's going to change big time though!
In yesteryear things about this industry was clouded and operated under the shadows!but gen x and Y are different(we are being conditioned to be freelancing/independent/take care of ourselves ect more than any past generation,add social media/blogging/goggle ect and people coming of age are realizing imo that it is something you can do on your own(there is a shift,and the banks no it imo).
I was lucky that i have a uncle that is a CA and he guided me into the diy investing world(maybe i am worst off doing it on my own,ironically,if i underpreform such and such benchmark but i like this side of the fence regardless
"The goal of the nonprofessional should not be to pick 'winners'-neither he or his helpers can do that-but should rather be to own a cross section of businesses that in aggregate are bound to do well"warren B----and no fees paid to a advisor


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## donald (Apr 18, 2011)

I would also add,i don't think there is a big grey area in investing(diy)you either are into it or not!
I am a intj(and i naturally love building things)i am drawen to think in system and like models ect
Prob like most of the diy i can get lost for hours reading about investing(i will find myself reading a 1982 speech charlie munger gave lol or i'll be reading this/that and the other,blogs ect and a entire afternoon will go by--that is prob not 'normal'
I would think most diy investors are not represented in the common joe six pack(most people's eyes would prob glaze over if i they had a look at my kobo lol(dominated by investing/business books ect)few of my friends are like this(just have different interests)
One example,i am friends with about 400 hundred people on facebook(educated people for the majority)and i think i am the only one that 'likes' investing books or investors and even business ect....i am rambling and maybe contradicting myself but it's a interesting topic.


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## Cal (Jun 17, 2009)

e) priorities


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## randomthoughts (May 23, 2010)

It sounds to me like you're also wondering how YOU can help people. But the truth is that there are a lot of 'experts' out there offering advice and convincing them that you have the answers is a difficult one. Lacking any other means of discernment, people often end up relying on referrals or certifications or media - with mixed results.

Less trusting people (like myself  ) spend valuable time trying to figure out what sources are worth listening to. And rather than re-invent the wheel, instead of advising people directly, I'll refer them to the sources that convinced me. For investing, those are primarily:
canadiancouchpotato
canadiancapitalist

If nothing else, it might save them the time that I spent looking - though hopefully not the amount of time I spent examining.


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## Mortgage u/w (Feb 6, 2014)

Most people don't even know that they can DIY. They don't know what a discount brokerage account is. Heck, some don't even know the various types of investments available. I remember working at a branch many years ago and clients would come in with a statement such as 'I want to buy an RSP' - like an RSP is an investment on its own. Sounds exaggerated....but its the honest truth.

So the barrier is simply 'education' and the lack of.

There are tons of TV programs, online forums and bank marketing out there, yet they fail to reach everyone.

This education will need to start at an early stage, such as childhood. Programs need to be introduced at the elementary and secondary levels and continued with more advanced programs at the university level. This way, people cannot avoid it, will have a broader knowledge, be more familiar and receptive when it comes time to invest on their own.


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## savvybuck (Feb 12, 2014)

donald said:


> I would also add,i don't think there is a big grey area in investing(diy)you either are into it or not!
> I am a intj(and i naturally love building things)i am drawen to think in system and like models ect
> Prob like most of the diy i can get lost for hours reading about investing(i will find myself reading a 1982 speech charlie munger gave lol or i'll be reading this/that and the other,blogs ect and a entire afternoon will go by--that is prob not 'normal'
> I would think most diy investors are not represented in the common joe six pack(most people's eyes would prob glaze over if i they had a look at my kobo lol(dominated by investing/business books ect)few of my friends are like this(just have different interests)
> One example,i am friends with about 400 hundred people on facebook(educated people for the majority)and i think i am the only one that 'likes' investing books or investors and even business ect....i am rambling and maybe contradicting myself but it's a interesting topic.



I would have to say...you are very similar to me.

Anytime I see a commercial for a product and I am unfamiliar with it, I tend to wonder which company it is.

For example, I recently learned that the latest hot app called Tinder is owned by a company called IACI


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## My Own Advisor (Sep 24, 2012)

f) time and g) interest in the subject.

It takes time to do your own investing and it takes a passion in the subject to keep doing it.

Most people don't have either or their priorities are messed up. People spend more time debating whether or not they should get the latest iPhone than manage their money.


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## Eclectic12 (Oct 20, 2010)

The most common one I keep running into is "I read a bit and was confused so I'm certain it takes years of training or a genius to do it". Somehow they don't seem to see it as the same as any other skill - which takes time and learning. They want it to make sense right away and when some of it doesn't - they give up.


Cheers


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## liquidfinance (Jan 28, 2011)

Mortgage u/w said:


> Most people don't even know that they can DIY. They don't know what a discount brokerage account is. Heck, some don't even know the various types of investments available. I remember working at a branch many years ago and clients would come in with a statement such as 'I want to buy an RSP' - like an RSP is an investment on its own. Sounds exaggerated....but its the honest truth.
> 
> So the barrier is simply 'education' and the lack of.
> 
> ...



Sadly this is the way my mother in law is. My wife is to some extent but she took her home buyers out pretty much at the bottom. Now i'm slowly warming her to the idea of getting back into the market. 

Yesterday the mother in law asked if I had purchased a RESP yet. Exactly as you describe, as if i5 is some universal off the shelf product.


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## Eclectic12 (Oct 20, 2010)

Mortgage u/w said:


> ... So the barrier is simply 'education' and the lack of.
> 
> There are tons of TV programs, online forums and bank marketing out there, yet they fail to reach everyone.
> 
> This education will need to start at an early stage, such as childhood. Programs need to be introduced at the elementary and secondary levels and continued with more advanced programs at the university level. This way, people cannot avoid it, will have a broader knowledge, be more familiar and receptive when it comes time to invest on their own.


Nope ... people go to extremes to avoid learning what they have already given up on or are just not interested in. 
So there might be a bit that is absorbed but if they are not intrigued or interested, the education won't help on a broad scale.

It's not that the info isn't available ... it's that people value or are more interested in other things.


Cheers

*PS*

What's the saying?

You can lead a horse to water but you can't make them drink.

Unless getting the attention and interest is worked into the equation - the courses will be ignored, like a lot of other courses.


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## donald (Apr 18, 2011)

I think it comes down to personality,i almost see investing as a artistic pursuit(in a wired way)you have some money,you might start with a blank canvass,you create the portf,you tweak things here and there,add a new component(investment)and the picture slowly matures as time goes by(some surprises,pleasant and not so pleasant and you have to retool,keep your ultimate vision intact)
The pieces of your picture is a giant world of many choices but you decide and it's your creation(half the time as a investor i wonder if it is about the cold hard cash?)like a giant chess game,a adventure
Might be a wired way of looking at it but maybe similar to a artist that paints portraits(no two portf or painting will every be the same,this is half the intrigue)too far out maybe
It's like we are all writing a 'story' and i think that is half it right there.I explained this to a friend(who thinks i am bit crazy investing for myself,he asks the question why?why not just use a adviser)he didn't get it when i was trying to explain.it is stimulating also(everyday is different in the market and you just never know)


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## Moneytoo (Mar 26, 2014)

donald said:


> I think it comes down to personality,i almost see investing as a artistic pursuit(in a wired way)you have some money,you might start with a blank canvass,you create the portf,you tweak things here and there,add a new component(investment)and the picture slowly matures as time goes by(some surprises,pleasant and not so pleasant and you have to retool,keep your ultimate vision intact)
> The pieces of your picture is a giant world of many choices but you decide and it's your creation(half the time as a investor i wonder if it is about the cold hard cash?)like a giant chess game,a adventure


What a beautiful post!


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## MoneyGal (Apr 24, 2009)

Eclectic12 said:


> The most common one I keep running into is "I read a bit and was confused so I'm certain it takes years of training or a genius to do it". Somehow they don't seem to see it as the same as any other skill - which takes time and learning. They want it to make sense right away and when some of it doesn't - they give up.


There's a big cognitive load to investing. Understanding investing is cognitively complex and requires a lot of processing power. Some of the people I meet, I am honestly not sure how they do their taxes each year. DB pensions remove the cognitive load (and the risk), because they happen automatically with employment. In a non-DB world (i.e., now) people have to take on that work themselves. Many don't, and I wager some significant fraction of those that don't actually can't.


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## the-royal-mail (Dec 11, 2009)

I agree with the mortgage u/w post above. I have also heard the following:

1. there's more to life than money

2. I want to have fun and enjoy life, buy what I want

3. I don't want to spend time managing accounts and monitoring my money, I just want to have it taken off my cheque and know that it's at least growing a bit

Here in CMF we do have a lot of power in educating people who think like that, but they have to come here on their own, have a genuine interest in listening and making changes to their lifestyle, financial management and investing concepts. Nobody wants to do without anything and nobody wants to save first, before spending. The best most people seem to be willing to come up with is buying an urban condo and renting it out. The non-DIY investment and RE industries are really taking advantage of all of this.


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## hope4wealth (Sep 15, 2013)

I agree with a lot of what was said above. People just don't take an interest and then complain when they are not getting to the goals they have planned for.

I see it quite often, very smart people that just hand their money over to a financial advisor, but have no idea what they are invested in or how their advisor is compensated. This discussion comes up quite often when I begin to ask them these types of questions and explain MERs and some other topics to them. It's quite incredible what folks don't know. Of course this is coming from someone that is interested in personal finance, but it's your money you should be aware of what is happening.

There is no excuse these days to not know. Information is available at everyone's finger tips and all that is required is to know the basics.


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## hope4wealth (Sep 15, 2013)

hope4wealth said:


> I agree with a lot of what was said above. People just don't take an interest and then complain when they are not getting to the goals they have planned for.
> 
> I see it quite often, very smart people that just hand their money over to a financial advisor, but have no idea what they are invested in or how their advisor is compensated. This discussion comes up quite often when I begin to ask them these types of questions and explain MERs and some other topics to them. It's quite incredible what folks don't know. Of course this is coming from someone that is interested in personal finance, but it's your money you should be aware of what is happening.
> 
> There is no excuse these days to not know. Information is available at everyone's finger tips and all that is required is to know the basics.


To add to this, our society treats personal finance as a subject that is often voodoo to discuss with others as it's too personal. We could all likely learn a lot from others if we shared what we were doing, much like this forum. However, in person conversations regarding personal finance are often tough to have due to various emotions.


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## Just a Guy (Mar 27, 2012)

Then there's the fact that investing is often taught by people with no understanding of investing. My son has a unit in school on investing. They are doing that stock market simulator...given $100,000 in imaginary money, told to buy stocks, and the one with the most money in 6 weeks gets the highest mark.

What does this teach? Gambling.

To get the highest returns in 6 weeks, your best bet is to buy something highly volatile like penny stocks. If they're successful, they come out of the program thinking they're expert investors...ever see the news articles about some kids who managed to double their investment in 6 weeks hailed as financial geniuses?

Of course, when they get out into the real world, and try to duplicate their success, reality sets in and kicks them in the head...

Most teachers know nothing about investing, have no clue who Benjamin graham is, what an MER is, what dividends are, what a drip is, what leverage is...yet they are in charge of "educating" our kids...

And wind up releasing a generation of gamblers.


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## GreedIsGood (Dec 4, 2013)

Just a Guy said:


> Then there's the fact that investing is often taught by people with no understanding of investing. My son has a unit in school on investing. They are doing that stock market simulator...given $100,000 in imaginary money, told to buy stocks, and the one with the most money in 6 weeks gets the highest mark.
> 
> What does this teach? Gambling.
> 
> To get the highest returns in 6 weeks, your best bet is to buy something highly volatile like penny stocks. If they're successful, they come out of the program thinking they're expert investors...ever see the news articles about some kids who managed to double their investment in 6 weeks hailed as financial geniuses?


This is what happened during a stock simulator assignment in my first year of university. We all started with $100k. On the second day of trading, some guy had $5 million. Only possible explanation are options.


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## BoringInvestor (Sep 12, 2013)

GreedIsGood said:


> This is what happened during a stock simulator assignment in my first year of university. We all started with $100k. On the second day of trading, some guy had $5 million. Only possible explanation are options.


Do you know if the simulator used real-time, or delayed market data?


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## Eclectic12 (Oct 20, 2010)

MoneyGal said:


> There's a big cognitive load to investing. Understanding investing is cognitively complex and requires a lot of processing power.
> Some of the people I meet, I am honestly not sure how they do their taxes each year.


True ... which is why for some I've suggested an advisor or coach potatoe setup.

However, the ones that puzzle me have already demonstrated they have the cognitive ability through other hobbies or their job but for whatever reason, treat financial skills/investing differently.

The most common way is to understand that they didn't dive into a full engine rebuild on the first try but somehow not understanding the more complicated areas of financial matters on the first try is proof they can't learn it.




MoneyGal said:


> DB pensions remove the cognitive load (and the risk), because they happen automatically with employment. In a non-DB world (i.e., now) people have to take on that work themselves. Many don't, and I wager some significant fraction of those that don't actually can't.


This is why I have trouble with the idea that the gov't should provide subsistence retirement funding and that's the end of their involvement.

There are those who could pick it up (and likely would do reasonably well) but from my conversations, a significant number refuse to (and that includes the really basic idea of saving for retirement when there is the cash flow to do so).

When I think of this group and then add in those who can't take due to their abilities - IMO, it's better for the gov't to try to address this now versus ending up with a bigger group of people in retirement.


I like some of the directions being taken (ex. adding financial literacy to the provincial school curriculum) but have seen that there are a lot of barriers/variables to this complex issue. So I don't expect that one approach is going to be an end-all and be-all.


Cheers


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## Mortgage u/w (Feb 6, 2014)

Eclectic12 said:


> Nope ... people go to extremes to avoid learning what they have already given up on or are just not interested in.
> So there might be a bit that is absorbed but if they are not intrigued or interested, the education won't help on a broad scale.
> 
> It's not that the info isn't available ... it's that people value or are more interested in other things.
> ...


I cannot agree. Do all courses offered in the education program drive interest and attention? No. Not everyone taking a math class will become a mathematician. Not everyone will become a physician, historian etc. The goal is introducing the basics of MONEY and the investment options out there. 
How is it that such a key factor in life (savings) is totally ignored in our education system? They teach you where money comes from but not how to generate and save it. You come out of school with a nice piece of paper to frame but then left to the wolves to figure life out. I know money isn't everything....but there would be a lot less people living beyond their means had they just been educated.


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## Eclectic12 (Oct 20, 2010)

donald said:


> I think it comes down to personality, i almost see investing as a artistic pursuit ...


I like the analogy.

IMO it's far more complex than personality. 

For example, a co-worker wasn't the least bit interested in saving for retirement or anything else. Two months later, he was. You ask what shifted his interest? Before he was accepted into the union in a full time position - he was sure what little he'd save wouldn't make a difference so he partied it away. After landing the full time position - he was sure he was making enough money that saving would make a difference so he was then willing to listen.

Just as the 'story' is written by the actions and portfolio on the canvas, the barriers to getting started as well as determining what one can do are written when the individual decides whether they are going to setup their canvas to paint the picture.


Cheers


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