By Irshad Mushtaq
Financial education is essential, yet often overlooked in schools. This gap fosters skepticism about financial assets, amplified by events like the 2008 crisis. Investing is NOT the same as trading. Beginners should start with stable vehicles like ETFs & mutual funds before diving into the risky waters of trading. Remember there are no shortcuts to financial success. Aim to leave a legacy of understanding for future generations. Let’s build a culture of financial literacy! Most people tend to avoid financial education, largely because our schools don’t focus on it. This gap has bred a widespread skepticism toward financial assets. Historical events like the Harshad Mehta scandal in 1992, the Ketan parikh scandal in 2001, and the 2008 financial crisis have further fueled this distrust. Over-leveraging, taking excessive loans, and emotional trading have worsened these issues, leading many to lose significant amounts of money. One critical distinction to understand is that investing isn’t the same as trading. Many newcomers mostly jump directly into trading, but it’s crucial to grasp the basics of investing first. Beginners should understand investment vehicles like ETFs (Exchange-Traded Funds) and mutual funds, which are often more stable and less risky than trading individual stocks. Think of learning to invest like learning to swim: you should start in a swimming pool, not the open sea. Similarly, beginners should stick to mutual funds, ETFs, and quality diversified portfolios before attempting high-risk trading. Many have lost money due to speculative trades, following unreliable tips, and holding onto bad shares. There is no shortcut to doubling your money overnight. Financial success comes from learning and wise investing over time. We should regard money as a vital resource and aim to leave a legacy of financial understanding for future generations. Changing our own mindset is the first step toward influencing the mindset of those to come. Building a culture of financial education is challenging but crucial. Educating ourselves and others about sound investment principles can help prevent high-risk trading mistakes. Remember the saying, “learning is earning.” By fostering a strong educational environment around finance, we can hope for a more financially literate and stable future.
- Learn from the insights of @Irshad Mushtaq, Writer, Investor, Entrepreneur & Founder of M I Securities! Connect for valuable financial advice at [email protected]
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