Ways to deal with the "Investment Phobia" disease.

As an investment planning professional, I have to meet many people daily to suggest them suitable investment options. Though everyday I get mixed reactions and get to know about various preconceived notions about investment from various people, yet recently I got to know about a really unbelievable fact which was unknown to me and perhaps still unknown to many people. This helped me a lot in judging people’s mindset regarding money matters and offering them better investment guidance. The fact which I came to know is about a disease, approved by medical professionals around the world and this is widely spreading like anthrax after the global financial crisis

The medical term of the disease is “Financial Phobia” or “Investment Phobia” or simply put it is just a fear of investing money or something related to money matters. Perhaps you are taking it lightly. Not your fault, I did the same thing. But its indeed a serious disease and doctors have already identified the symptoms. According to them it can even become a serious problem. Its not necessary that this disease will develop due to any financial mishap for example losing huge amount of money or something like that. Since birth this disease may develop in some people. Its actually a real clinical condition. In 2003 a research was conducted in UK which revealed the fact that almost 1 in 5 people there suffer from this disease. It further revealed that almost 20 % of the adults develops full version of this disease and nearly half of the population develop a lighter or milder version of the disease. But doctors are also of the opinion that it can also develop due to huge financial loss, knee deep debts etc. The most common symptoms are anxiety, nausea, high blood pressure etc. In extreme situations or extreme stage people often start neglecting their financial affairs and often start ignoring deadlines. But this attitude will not do any good, but will make the situation even worse. A study of the Cambridge University revealed that even highly educated people do develop this disease though they are extremely successful and brilliant in their respective fields.

But don’t worry; I will not make things complicated to scare you as I know that most of the people complicate things unnecessarily. I feel that it is not as serious as we feel and can be easily corrected. From my experience I have managed to learn that the only thing which gives rise to these types of disease or problems is “IGNORANCE”. I have met many educated people but they are zero in finances and put everything in their respective adviser’s shoulder and when problem arises they feel frustrated.

So here are few steps which will help you overcoming this disease if you follow them:

• Do not rely completely on your adviser. Start learning about finances and investment even if you are a Zero in finances. There are number of CDs, booklets available or you can simply buy a mutual fund booklet to know about the past performances, how a fund works etc. If you learn it in a simple way you will get to know many things.
• Before your adviser buys an investment product, make sure he provides you with a copy of the document explaining about the investment. This will make you satisfied as you are fully aware about where you are investing.Besides, individual decision may fail but collective decision succeed most of the time.
• Verify the legitimacy of the investment.
• Find out the costs and benefits associated with the investment
• Assess risk-return profile of the investment
• Know the liquidity and safety aspects of the investment.
• Ascertain if it is appropriate for your specific goals
• Compare these details with other investment opportunities available.
• Seek all clarifications about the intermediary of the investment
• Explore the options available to you if something goes wrong and if satisfied go for the investment.

Before investing if you follow these steps then I think you don’t have to go to the doctor or invest your money in placing a “PACE MAKER” in your heart. Instead you can invest that money in a good fund for your son’s /daughter’s higher studies.