We all know we need to invest.

The sky is falling, the population is ageing, the global is warming, and the government won't be there to pick up the pieces if we get to sixty-five without enough money.

OK, it IS true that social security, and its equivalents everywhere in the Western world, are under-funded, and government pensions, funded by a shrinking workforce, just won't be able to cover all the ageing baby boomers.

And maybe you have left it a bit late to get going - you might have partied away everything you made until you were well into your 30s, had started a family, and now have no disposable income to channel into investing.

Or you had a business (or five businesses) that went under, and left you with a pile of debt.

Or maybe you can just see the writing on the wall, and you desperately don't want to be trying to live on baked beans and Jello for 40 years of retirement because that's all you can afford.

Whatever your circumstances, I am here to tell you that there is NO NEED TO PANIC.

"Most people overestimate what they can accomplish in one year, and underestimate what they can accomplish in a decade." - Anthony Robbins.

The Get-Rich-Quick Merry-Go-Round

There are dozens, nay, hundreds of shark out there, ready to prey on your panic.

They will tell you that you are doomed if you don't own ten houses in the next ten years.

That you can start investing today, with no money at all, if you just attend their $2000 seminar.

That you owe it to yourself, and your family, to start trading shares, trading options, trading forex (that's foreign currencies), or buying into start-up oil-drilling companies.

They will say whatever they need to say to get you to spend money with them.

Why?

Because they haven't got their own finances in order, and they need your cash!

The thing that gets me all hot under the collar is that they call it "investing".

This Is Not Investing

What they are talking about is not "investing". It's "working". Or sometimes "gambling"!

Now, I am not saying that you can't make money using some of these techniques. I, myself, bought a property with no money down in a part of the world that doesn't have foreclosure sales.

But it was work!

It took a lot of time!

And it was fairly stressful - we could have lost $55,000 we didn't have in the first place if I didn't manage to pull off the deal.

Now, we've made about $50,000 a year in capital gains on that property, and that gave us the leverage to buy more properties at a much lower level of risk. I'm not saying it wasn't worth it.

But it wasn't "investing".

What is "investing"?

What we are doing now is "investing" - now we have it, it just sits there, the rent comes in, and it goes up in value.

But what I did to get from having nothing to owning that property, that was serious work.

I would not want to try to make a living doing that - or even to put together a portfolio of ten of those, using that exact same strategy. It's just too much work! And too much stress.

Some people love it - they get off on the thrill, the adrenaline, hunting down the bargains, negotiating the deals. if you love it, by all means make a business of it. It's a well-paid career, and it will build you an asset base to fund your retirement.

But it's not "investing" until you don't have to work at it any more.

There is nothing wrong with working hard to build an asset base - it's honorable. It's what we should all be doing.

The problem is that by calling it "investing", these gurus are leading people astray.

I have seen people borrowing, using credit cards, to pay for courses adn equipment, thinking they were "investing", when really they were setting up in business.

Everyone needs to invest, but not everyone is cut out to run an investment business!

Investing Is Personal

At different stages of life, you need to take a very different approach to risk. Losing $55,000 we didn't have in our early 30s wasn't going to wipe us out - we still had many years of working life in front of us to pay it back and try again.

But if you are 60 years old, and your life savings amount to $64,000 (which was the average in Australia, last time someone looked), then losing $55,000 is simply unthinkable.

But people go into these risky deals, thinking they have to do it because they have to "invest"!

"I have to invest in something. This is something, therefore I have to invest in it."

Not good logic.

But What Can I Do Right Now?

No matter where you are in life, your first goal is to make your income greater than your expenses. Increase the one, or decrease the other, or both.

Your next goal is to save a "safety net" - enough to pay for a few months of living expenses. This is your "peace of mind" money. Do not do anything risky with your peace of mind money!!

Don't worry if you get a percentage point or two less interest - sure, put it in a high interest account, but keep it in some form of cash, so you can always get at it if you need it.

Your next goal is to pay off all your expensive consumer debt.

Only then will you have "investing" money.

But That's Impossible!

No matter how old you are, or how dire your situation, you can do this. I have coached people carrying tens of thousands in debt because they gave personal guarantees when their business leased equipment, and people who ran up tens of thousands in credit debt during 15 years of alcoholism and drug addiction, and people who lost everything in their 50s and had to start over.

Stop looking for the "big move" that will turn it all around. Stop jumping from one course to the next, and talking loudly at barbecues about your "investments" while you're refinancing your house every year to pay off your credit cards.

Stop looking for the short cut, the magic bullet, the quick fix.

Settle in for the long haul.

Take the tortoise approach.

You see, there's one thing that gets overlooked in all this palaver about the shrinking workforce and its inablility to carry the retirees.

If there's a shrinking workforce, you will be able to keep working.

You probably have ten, if not twenty more productive years than your parents had.

If you're young, then you have lots of time anyway. Save half of what you bring home each week. Don't look at me like that - you could do it if you were willing to live the way your parents lived at your age. Just do it - you'll thank me in ten years. Or don't - doesn't affect me whether you do or not, only affects you.

Start with boring investments, and get to know all about them before you branch out into fancier strategies. Keep a portion of your money in high risk, high growth areas while you have a good few years of work ahead of you, but only a portion. Not all of it.

Now, I shouldn't have to say this, but I do - although I have been talking to you and using the word "you" throughout this Hub, this is not financial advice. Or advice of any kind. You should make your own financial decisions in consultation with qualified financial professionals (and legal professionals, and any other kind of professional appropriate under the circumstances). I am not making earnings claims, and any examples given are for illustrative purposes only and you should not think that you might attain the same results if you tried doing the things in the examples I gave.

In other words, use your common sense.

But then if people DID that, I wouldn't have needed to write this rant in the first place, would I?