How comfortable you are with money, your ability to create a savings plan and your attitude towards investing can be determined back in your childhood. Watching how your parents dealt with finance and the effect that had on you and your circumstances can influence your appetite for financial risk. Do you remember hearing the sayings ‘money doesn’t grow on trees’ or ‘save the pennies and the pounds will take care of themselves’. This sort of early conditioning can affect your relationship with money and the risks you are willing to take in your financial decisions.
There may also be very specific cultural investing preferences when it comes to where and how you’re expected to invest your money. Every culture has their own views on investing, earning interest, and what constitutes a “safe” investment.
AdviceFirst adviser Wendy Chen agrees her upbringing has influenced her attitude to money as her parents started teaching her the importance of saving and investing from young age.
“My parents have always been good at saving money and taught me to have the same good habits. When I was around ten years old I started getting paid pocket money by doing chores around the home, e.g., $2 for doing the dishes, $3 for mopping the floor etc. At the end of each month my mother would match what I had earned dollar for dollar but only if I deposited the money into a bank’s savings account. We would go into the bank together to deposit the money and get the new balance printed on the deposit book. I could see how the money was growing due to my contributions, my mother’s additional contributions and the interest earned from previous months. This taught me the basics of investing.”
Wendy says this focus on savings from a young age meant that she was initially very conservative in her investment thinking but building a career in financial services has seen that mindset shift.
“I studied finance at university which built up my understanding of investing, the share market, diversification and volatility. With this knowledge I had more confidence and gradually moved my risk appetite from conservative to a bit more risk taking.”
Moving from saving to investing
Many people feel confident in saving but when it comes to investing their savings, their upbringing and cultural background, often prevents them from leveraging their cash savings in the investment market. The good news is there are several ways you can start growing more comfortable with the idea of investing, try these tips to get started:
- Do your research. Start reading articles, listening to podcasts, watching videos on the investment market to increase your understanding and comfort of all things financial.
- Talk to your family, friends, and community. Talk to those you trust and who you see investing confidently, they will be happy to help.
- What are investing for? What goals do you have that investing can help you to reach? What are you wanting to achieve personally with investing?
Get help from us.
Our team of advice experts can help you on your investment journey. They can help you understand what is important to you, how much risk you are ready to take and work with you to develop an investment plan with your goals in mind.
To get started call 0800 438 238 or email letstalk@advicefirst.co.nz
