Always be questioning
Most people don't invest in markets because of their limiting beliefs about the market.
One of the main reasons people don’t start with investing is because of social truths. Social truths are what the society believes to be true but is not true. Some of the social truths in the investing world are
One can’t beat the market
Property is safer than share market
One needs to a professional investor or trader to make money in the share market
Share market investing is gambling
You could loose it all in the markets
Professional investors have an edge over retail investors
One needs expensive tools/access to data to make trade/invest
One can get multi-bagger returns only by investing in small companies
For example when I started investing in 2008 when I was in my 20s, I was constantly bombarded with these social truths by my parents, friends and extended family.
During our formative years when we are conditioned with these social truths we accept them and never challenge them. As Yuval Harari writes in his book sapiens, the human brain is underdeveloped when humans are born. The brain could be moulded into a particular religion or other beliefs during the formative years.
“since humans are born underdeveloped, they can be educated and socialised to a far greater extent than any other animal. Most mammals emerge from the womb like glazed earthenware emerging from a kiln – any attempt at remoulding will only scratch or break them. Humans emerge from the womb like molten glass from a furnace. They can be spun, stretched and shaped with a surprising degree of freedom. This is why today we can educate our children to become Christian or Buddhist, capitalist or socialist, warlike or peace-loving.”
Just like religion, we develop our other belief systems through our culture, experience, family and friends. Once these beliefs are set, it is very difficult to change. Even facts don’t change peoples’ mind. This is due to our psychology.
Holding two conflicting ideas causes cognitive dissonance in our brain. When something challenges our existing belief system, we try to avoid and instead try to look for opinions/views that support our existing beliefs. This is called as confirmation bias. So, when we read media headlines like “Global markets have lost $6 trillion in value over the past six days”, our inner child which believes that investing is like gambling feels very safe.
There is only one way to break the beliefs and that is to question. Question the beliefs and be open to learning new things. This is something that I picked from Aaron Swartz, an internet activist, who I believe truly tried to change the world.
I wrote this article because I started to invest only after I overcame those limiting beliefs. And, when I talk to my friends about investing, it is these beliefs that holds them back from dipping their toes in investing.
Start investing. Makes mistake and learn from those mistakes. Investing is highly rewarding.
Bonus video: Peter Lynch’s video on investing.