Buying shares like getting new boots

Buying shares like getting new boots

Agribusiness
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Farmers have experience with property as they own a farm, hence stepping into an investment property is much more familiar to most farmers and graziers than buying shares.

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Ben Law says doing something that's unfamiliar might lead you to an opportunity of a lifetime.

Ben Law says doing something that's unfamiliar might lead you to an opportunity of a lifetime.

The first time someone suggests you should invest some money into super or buy shares to build your off farm investments, most farmers and graziers admit they would rather go to the dentist for a root canal treatment.

It's because most of us have had very little experience investing in shares or super and therefore it feels very unfamiliar. Our brains are wired to feel familiar and comfortable with what we know and what we have experience in.

That is why buying an investment property for a farmer feels more comfortable than buying shares. Farmers have experience with property as they own a farm, hence stepping into an investment property is much more familiar to most farmers and graziers than buying shares.

The same goes for a new pair of boots. You know how when you have an old pair of boots, as soon as you put them on you know they're your boots because they feel so comfortable and familiar.

Now I want you to think back to when you replaced your old boots with a shiny new pair. You took them out of the box, slipped them on and took your first walk around the house. They're the same brand, the same size, but they just feel different. They feel unfamiliar and your brain instantly tells you, 'they're not your boots mate.'

Now the good thing is, with time those new boots get more and more familiar until one day, they have become 'your boots'.

The same thing goes for shares. Once you have 'tried on' a portfolio of shares, as time passes you build on your experience until finally it has become familiar and comfortable. You just need time for your brain to get familiar with it and for your experience to grow.

One important point I want to raise. Whenever you buy a new pair of quality boots, they tend to be a little uncomfortable in the beginning and quite often they may even give you blisters. But no one would throw them in the bin straight away just because of that. You oil them or wear them with slightly bigger socks to stretch them and you give them time to be broken in and for your feet to get used to them. More importantly, when they become your boots you oil and polish them regularly to keep them looking their best.

The same goes with shares and superannuation. You need to buy quality assets and you need time for them to become familiar. You need to break them in by doing your research and planning and to oil the portfolio by completing portfolio reviews at regular intervals.

So next time you feel uncomfortable trying something new, like buying shares or investing off farm, be curious and ask yourself whether you feel uncomfortable because you haven't had the experience to know if it is a good idea or not or if it is just because the idea is unfamiliar. Doing something that's unfamiliar might lead you to an opportunity of a lifetime.

  • Disclaimer: Ben is an authorised representative of Charter Financial Planning. This article offers general advice only.
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