Why We Procrastinate Investing (And How to Overcome It)

We all know and struggle with procrastination, whether it’s completing a work assignment, getting around to cleaning the house, or even starting our investing journey.

Particularly with investing, many of us know that it’s the best way for us to achieve our financial goals, but yet we still put off making our first investment.

The barrier to start investing is already quite high – there’s a lot of information out there to sift through and it can feel overwhelming to even figure out where to start – so it’s no wonder that we tend to put it off. On top of that, we could also feel anxious and in denial about our personal finances.

Here, we’ll dive deeper into understanding the underlying reasons that cause us to procrastinate investing and how we can combat our procrastination tendencies when it comes to investing.

Reason #1: You’re afraid of losing money

A major reason we put off investing is because we’re afraid of losing money. This is known as loss aversion, a cognitive bias in which we tend to prefer avoiding losses, even if it means giving up the potential for gains.

That’s because the psychological pain we feel when losing RM100, for instance, is more powerful than the pleasure of gaining RM100.

How you can overcome it

Try reframing your thoughts about investing from “I’m afraid of losing money” to “Here’s how much I might lose out on if I don’t invest”. This small shift in your mindset can help you get over your inertia in investing.

Had you invested in the S&P 500 10 years ago, you would have gained 13.81% in annualised returns today. That means if you invested RM1,000 in the S&P 500 10 years ago, you’d have RM3,645.90 today. By not investing at all, you lost a chance to potentially earn over RM2,000!

If the loss of potential earnings doesn’t incentivise you to start investing, then how about the sobering reality of how much money you’ll lose to inflation by not investing at all.

Inflation erodes the purchasing power of your savings; RM100 in cash 10 years would be worth less today because RM100 can’t buy you as many things today as it can 10 years ago.

Investing, on the other hand, can help you beat inflation. Assuming an average inflation rate of 3.61%, investing in a vehicle that can give you a 5% return every year is more than enough to cover the loss in purchasing power caused by inflation.

Reason #2: You think you don’t know enough to start investing

We often think that we need to know everything there is to know about something before doing it. This perfectionist mentality can cause us to delay investing.

How many times have you thought to yourself, “I just don’t know enough to start investing” or “After I learn about this next thing I’ll be able to invest”.

But here’s the truth: You don’t need to be a financial expert to start investing.

How you can overcome it

To overcome this paralysis by analysis, try making small, low stakes investments that are easy to accomplish and have little, if any, negative consequences. In Timothy Pychyl’s book, Solving the Procrastination Puzzle, he proposes a slogan for procrastinators: “Just start it!”

You don’t need to be an expert or learn everything before you start investing. Instead, adopt Pychyl’s slogan and just start, even if just taking a small step such as getting around to opening your brokerage account. Once you start, you’ll naturally build momentum to keep going.

Reason #3: Your emotions cause you to put off investing

People often think procrastination is a time management problem when, in reality, procrastination is a mood problem.

According to Procrastination, Health, and Well-Being, we sometimes put off carrying out a task because we have strong negative emotions associated with that task.

Hence, perhaps you could be putting off investing because you feel some level of anxiety, fear, or doubt about money-related matters or about your ability to manage your money.

Downloading a brokerage app or filling out a form to open a CDS account seems easy enough as a task, but it can feel overwhelming to do it when you’re battling with your negative feelings when it comes to money.

And if you are one of these people, you may choose to avoid the task entirely than to confront or overcome their negative emotions.

How you can overcome it

If you’ve identified that your emotions are holding you back from investing, don’t beat yourself up over it. It’s completely okay to feel anxious about money.

Acknowledging your negative emotions is the first step towards overcoming your self-sabotaging tendencies, such as procrastination.

Then, consider ways you can keep yourself accountable for starting and continuing your investing journey. Set small goals for yourself, enlist the help of a friend, or automate your investments so you don’t have to think about it.

If you’re putting off opening your brokerage account, call up a friend and go down to the bank to open your brokerage account together. Better yet, download a brokerage app and explore it together with your friend the next time you go out for a cuppa.

And if you always delay funding your investment portfolio, set up a standing instruction from your bank account into your portfolio.

Let’s start investing

Now that you have a better understanding of why you procrastinate and you know how to overcome it, it’s time to start investing and here are some easy ways to start.

1. Invest with a robo-advisor

Have a smartphone? Head to the app store and download a robo-advisor. The Securities Commission’s page lists all the licensed Digital Investment Managers in Malaysia. With a robo-advisor you can start passive investing with only RM100. Just create a profile for yourself and you’re off to the races.

2. Seek help from a financial advisor

A financial advisor can help you get started on your investing journey. They’ll be able to recommend potential funds based on your risk profile and financial goals. Just make sure that you’re seeking help from an unbiased advisor that isn’t getting a kickback for recommending products from a specific financial institution.

3. Open your own brokerage account

Finally, you can open a Central Depository System (CDS) account to start investing directly in Bursa Malaysia. There’s a handy comparison tool of all the brokers in Malaysia here.

It may have been a difficult first step to make, but once you do it, you’ll not regret starting your investing journey.