Financial Planning

7 Reason Why People avoid Financial Planning

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In my previous post, I discussed about 6 Reasons to start investing early. After reading comments and all other replies, I realized that almost every person knows that they must invest some portion of their income but still they avoid financial planning.

According to a popular survey, 55 % of people don’t make any investment because they think that they don’t earn enough money to invest.

8 % of people don’t make any investment because they don’t want to invest and 9% people told that they don’t know how to invest.

The result of this survey shocked many financial planners. The survey was done by one of the best financial research institute of America. They had done this survey in America.

According to this survey, nearly half of Americans are not investing. So, one can imagine the result will be poorer in developing countries.

If everyone knows the importance of investment and one can start investment with little money then why so many people avoid it. There are multiple reasons for this but the most common reasons are:

You don’t understand financial planning.

Financial planning is not taught in any school, so it is obvious that most of us are unaware of it. There is a lot of information available on the internet on financial awareness but still, most of us don’t understand it

To avoid any type of confusion, I suggest you read the post to know the financial planning in a much better way.

Important: – What is Financial Planning?

In recent 10 years, financial planning gained momentum in India due to various awareness campaigns run by the government and various financial institutions. However, most of these campaigns are still associated with only Mutual Fund. Financial planning is much broader than the Mutual Fund.

Related Post: Mutual Fund- A Complete Guide for Beginners

You think that Financial Planning is only for Rich People

Financial Planning is only for rich people is the most common misconception among investors. People believe that their earning is not enough to make any investment. That is why more than 55% of people are not investing any money.

There are many investment options available whose minimum investment requirement is very less i.e Rs 500. There are other options also where the minimum requirement is below Rs 500.

Some people say that they don’t have money for meeting day-to-day expense, yet they waste a lot of money on things what they don’t need.

Nowadays, you don’t require too much money to start investing. You can also start investment with Rs 100 per month (i.e. less than 1.5 USD)

I have huge debt

You can’t create wealth with debt burden on your head. the cost of debt is much higher than the return from any type of investment. Repayment of your debt should be first priority. For most people repayment of debt is the first step towards financial freedom. Imagine how much surplus money you will have each month when you don’t require to pay any monthly EMI

In one of my posts, a woman commented that when she was young she took educational loan for further study. After marriage, her husband took a home loan to buy a house. When the EMI of this loan start eating a lot of their earning, they realised that they should repay this loan as soon as possible. After repaying their education loan they started investing money for their child. Now her child graduated without having any debt burden on his head.

I liked the way this couple managed their debt. Instead of enjoying the surplus money, they started investing so that they don’t require educational loan for their child.

So, if you have any debt then instead of making any investment, try to stop creating more debt and repay your loan.

You feel that Investment is Financial Planning

Many people invest their money in Mutual Fund, Fixed Deposit, Recurring Deposit and believe that they have done the financial planning. Financial planning is not only about investing money. Investment is just part of it. It deals with other disciplines like risk management, insurance, tax planning etc. which are important.

You think that you can handle it.

Many investors think that investing in stock is going to make them rich and as a result, they don’t need the services of a financial planner. They watch the stock ticker every day, make money often, lose more often and still continue trading stocks.

If you are trading in equities or commodities from your earnings, always make sure to trade only that much money which does not affect your family even if you lose it.

Related Post: 90% of investors lose money in the share market

Bad experience with previous Financial Planner

Not everyone is lucky to get a good financial advisor. There are a lot of financial planners who are dishonest and never hesitant to cheat their client.

Many people are being cheated by these financial planners and after being cheated they lost their trust in these financial companies.

I advised you to take financial advice only from those financial planner who is registered with the regulatory body. In India, take financial advice from only the financial planner who is registered with SEBI.

Many investors burnt their fingers by going to the wrong people. Once that happens they lose confidence in the system and people who can make their financial lives healthy. So, they become wary and don’t want to take another chance – they end up managing their own money.

If I die tomorrow

One of my friends told me that, “Mohit You are suggesting us to invest money but who know what is hidden in future. What if I while crossing the road and a bus hit me and I die tomorrow.” His question shocked me. He is not only the one person who is thinking like this. According to a survey, many people avoid investment just by saying what is the need of investment if no one knows when they are going to die.

After listening to this stupid reason, I asked him, what if that bus hit you and you survived and got hospitalised? No doctor will be going to do your treatment if you don’t have money to pay the hospital bill.

The survey told that many people asked this question but surprisingly, not a single person who has a family or someone who is dependent on them ever thinks so. Most of those person who asked this type of questions are youngsters, single and no one is dependent on them.


There are many more reason which I skipped. If you know any reason then please share with me in comments.

In my opinion, everyone should make financial planning and as soon as possible.   


  1. These are all valid reasons to feel apprehensive towards financial planning. Another reason might be that one simply is oblivious to the fact that such a service exists. Before I bought my first property, I didn’t know that mortgage brokers existed and would’ve gone straight to a bank had a colleague not told me about them. Bless him. But this is such a great and informative post so thank you!

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