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Breaking the Cycle: Overcoming Investment Procrastination

Breaking the Cycle: Overcoming Investment Procrastination 

By Mike Kanik


Investment procrastination is a common issue among many Gen Xers. Fear, lack of knowledge, and the demands of daily life often delay their entry into the world of investing. However, understanding the power of compounding and the importance of starting early can be transformative. This blog explores the reasons behind investment procrastination and offers practical advice to help Gen Xers take the first steps towards securing their financial future.

Why Gen Xers Procrastinate on Investing:

1. Fear of Risk
Investing inherently involves risk, and for many Gen Xers, the fear of losing money is a significant deterrent. This fear is often exacerbated by memories of financial crises, such as the dot-com bubble or the 2008 financial meltdown, which can create a paralyzing anxiety around investing.

2. Lack of Knowledge
Many Gen Xers feel they lack the necessary knowledge to make informed investment decisions. The complexity of financial markets, coupled with the vast array of investment options, can be overwhelming. Without a clear understanding, it’s easier to put off investing altogether.

3. Competing Financial Priorities
Balancing the demands of mortgages, student loans, children's education, and retirement savings can make investing seem like a lower priority. The immediate needs often overshadow long-term financial planning, leading to procrastination.

4. Perception of Insufficient Funds
There is a common misconception that substantial funds are required to start investing. This belief can prevent Gen Xers from taking advantage of opportunities to grow their wealth incrementally over time.

The Power of Compounding

Understanding the power of compounding can help overcome the hesitation to start investing. Compounding is the process where the returns on your investments generate their own returns. Over time, this can lead to exponential growth of your investment portfolio.

Example of Compounding

- Investor A starts investing $200 a month at age 35.

- Investor B starts investing $200 a month at age 45.

Assuming an average annual return of 7%, by the time both are 65:

- Investor A will have approximately $228,000.

- Investor B will have approximately $91,000.

Starting just ten years earlier allows Investor A to accumulate more than double the amount of Investor B, illustrating the profound impact of compounding over time.


The Importance of Starting Early

1. Longer Time Horizon
Starting early gives investments more time to grow and recover from market fluctuations. The longer your money is invested, the more time it has to benefit from compounding.

2. Ability to Take More Risks
With a longer investment horizon, Gen Xers can afford to take more risks, potentially leading to higher returns. Younger investors can withstand market volatility better, as they have more time to recover from downturns.

3. Financial Security
Early investing contributes to financial security in later life, reducing the stress and burden of trying to catch up on savings as retirement approaches.

Overcoming Investment Procrastination

1. Educate Yourself: 
Investing may seem daunting, but numerous resources are available to help you learn. Books, online courses, financial blogs, and podcasts can provide valuable insights. Consider starting with basic concepts like stocks, bonds, mutual funds, and ETFs.

2. Start Small:  
You don’t need a large sum to begin investing. Many platforms allow you to start with small amounts. The key is to start and gradually increase your contributions as you become more comfortable.

3. Automate Your Investments:  
Set up automatic transfers to your investment accounts. This strategy ensures consistent contributions and removes the temptation to spend the money elsewhere.

4. Seek Professional Advice:  
If you're unsure where to start, consider consulting a financial advisor.  Here at Rayhons Financial, we can help you develop a personalized investment plan that aligns with your goals and risk tolerance.

5. Join Investment Groups:  
Engaging with peers in investment clubs or online communities can provide support and shared learning experiences, making the process less intimidating.


For Gen Xers, overcoming investment procrastination is crucial for securing financial independence and a comfortable retirement. By understanding the power of compounding, recognizing the importance of starting early, and taking practical steps to begin investing, you can break the cycle of procrastination. Start small, educate yourself, and make investing a priority today. Your future self will thank you.

more to Life, than money™

The Rayhons Financial family is a team of professionals that want to guide you towards your ideal, joyful Life. A professional can help you create a personalized financial plan, provide valuable insights, and guide you through a better approach than “live and learn” or “trial and error.” Take a small yet courageous step today, simply go to RayhonsFinancial.com and connect with us for a conversation.

The content in this article was prepared by the article’s author. Cetera Advisor Networks, LLC does not endorse its content, and the views expressed may not necessarily reflect those held by Cetera Advisor Networks, LLC.