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Why People are More Financially Aware Than You Think

Date Added: March 16, 2017 03:11:42 AM
My father always told me that I could have gone either way growing up. “I didn’t know if you would turn out to be a maths genius, or an idiot who couldn’t string two numbers together”. It was blunt, but it was honest. The reason he thought this is because he was a fully-fledged accountant-come-mathematician, whereas my mother still counted using her fingers.As it happens, I fell more towards my father's side. I shared his love of numbers (although not quite his passion for accountancy) and my day-to-day business is all the more profitable because for it. But my mother’s approach always amazed me. I never understood how she knew so little or why she cared so little about the bills, their savings, their investments and everything else. Surely this is a crucial aspect of adult life?The problem is, she wasn’t alone in that. Her friends, and later my own friends, were the same. It was the norm, and growing up I noticed that it always seemed to be the norm. If you involve yourself in the financial sector then it’s normal to have friends with investments and share portfolios; friends with savings accounts and a head full of numbers. Outside of that world, there’s barely an investment account to be seen.At least, that's the case for many years, but there seems to be a shift and it has happened over the last few years.

Everyone’s a Trader

One of the things that drew my attention to this shift was this article on buying shares in Aldi on Regulated Broker. I own the site. It is a binary options site setup purely to focus on binary options. But on a whim, I wrote an article based on a question I’d had from a few people. My friends saw me as some kind of financial mogul, and they were asking me how it was possible to invest in companies it wasn’t possible to invest in.Simply put, they wanted to invest in privately owned companies. But as odd as this sounds, it told me that there was a demographic out there of people who look at companies on the rise and think to themselves, “I will invest in that”. They don’t have portfolio and they probably got their enthusiasm for investing from watching Wolf of Wall Street, but still, it’s there, and that told me something.Over time, the aforementioned article became hugely popular and I realized that in answering these questions I was holding people’s hands and guiding them through the basics of stock markets. I discovered that there is a huge demographic of people who have always wanted to invest, but have been to ignorant of the processes and too embarrassed to enquire that they never got around to it.And I’m not just talking about a handful of friends, either.

An Untapped Market

To test this theory, I created a website titled BuySharesIn. This website was thrown together over night and I then roped in some helpers to create content. We wrote guides on buying shares in big companies and we wrote guides on buying shares in private companies. We gave equal exposure to both of these article types and we put them in front of the “common man”, so to speak.The vast majority of people we targeted in a following ad campaign clicked onto the articles to read advice that was explaining something so simple, not other sites or “experts” bothered to look into it. We then set up an anonymous questionnaire and promised to answer all questions that came our way if the people posting them told us where they currently stood in relation to the sock market, and where they were a few days later.The questions included, “Will I go into a negative balance if I invest in stock?”. Apparently, there is a glut of people out there who see the words, “Your equity is at risk” and completely misunderstand it. What’s more, because no one thinks to explain this in full, they never find the answers they need and are too scared to invest. This is worsened by scaremongering reports of people who “lost it all” on the markets.We were also asked, by several people, whether a “bubble” was a bad thing or a good thing (after all, in common terms being in a “bubble” often means protecting yourself from everything around you, and therefore has good connotations), and whether they should buy “stocks or shares”. An experienced trader may laugh at these questions. In fact, they probably do. But it’s that laughter that stops them from being asked, which in turns stops those people from investing.

The Results

Of the many questions we were asked, all came from people with no investments on the stock market. After we answered the questions and received our reports back a few days later, we discovered that over 30% of them had ventured into the stock markets, while a further 40% said they would probably do so within the next year.That’s a huge improvement! And it’s not the only one. Our analytics from these websites and from Google searches proves that there are millions of wannabe traders out there that are too inexperienced to get involved and too embarrassed to ask questions.This doesn’t exist in other parts of the financial sector. Everyone feels like they can be stupid and naive when it comes to ISAs, bonds and savings account. No one has any shame in that, because that seems to be the way. But there is a certain stigma attached to the stock market, and until we break that down, the average man and woman on the street will always be wary of getting involved.