As you probably already know, when you purchase a share of stock you have bought ownership in that company. If you only buy a few shares your ownership percentage will be very small but you will own a piece of that company never the less. I recently ran across an interview of Mark Cuban by Entrepreneur magazine where Cuban stated that you shouldn’t invest at all.
This is an appalling statement for several reasons. He states you could lose your entire investment due to a flash crash. This statement is true but incredibly hypocritical. Cuban is known for many things, one being the show Shark Tank. The shows entire premise is buying ownership in small businesses. That is is essences purchasing stock in a company, even though the company isn’t public yet. The risks of purchasing small start-ups like this is far more risky than purchasing a company who has been in business for decades or even centuries, like a lot of the publicly traded companies out there.
Also, stashing your life savings under your mattress as Cuban suggests is a terrible idea. Wherever you store your cash, whether in a safe, under your mattress, in a safety deposit box or wherever else you can think of, someone could always steal it. Also, with today’s obsession with fiat currency the money under your mattress will constantly loose value due to inflation or even loose its entire value if the issuing country collapses. No matter where you put your money on this Earth it isn’t safe, period.
Lay not up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break through and steal: but lay up for yourselves treasures in heaven, where neither moth nor rust doth consume, and where thieves do not break through nor steal: for where thy treasure is, there will thy heart be also. Matthew 6:19-21 ASV
Investing is just like any other risk we take in life such as driving, playing football or climbing a mountain. Nothing in life is risk free but you have to do your best to educate yourself and seek wise council. Make the best choices you can by studying your investment choices and then getting second opinions from trusted financial advisers. In the end I do not believe sticking your head in the stand because life involves risk is an appropriate response to said risk.
I will leave you with an example of the power of investing. If you invest $1,000 a year at 8% interests, in 30 years you would have 113k. That is far more than the 30k you would have by foregoing investing altogether. Life is full of risks but living it is far more enjoyable than hiding in a closet and pouting because bad things might happen. Live life to the fullest, not in constant fear. Life is too short to fear every bad thing that might happen to you. In essence, if you spend your entire life afraid of everything around you, you will never leave your closet.