26 Jul The Big 3 Reasons People Don’t Trade
The big 3 reasons people don’t trade
Daring to invest in a business or trade is a courageous step that not many dares to take. Mainly, because there are many risks that not everyone is prepared to take. That is why, in this article, we will present you the big 3 reasons people don’t trade.
The reasons why people can avoid trading are several, and depend on many situations. It is almost impossible to summarize all the reasons in one article. That’s why we’ll tell you about the most common reasons. These are: mistrust of exports, fear of failure or bankruptcy and ignorance.
Mistrust of exports
One of the big 3 reasons people don’t trade is distrust linked to exports. Although this economic activity can bring a cash benefit to our trade, many people avoid it, mainly because of the mistrust and the high cost of doing so.
What are exports?
If your company or business starts to have some success, it is normal that people start talking about exports. However, exports are one of the reasons why people avoid trading. Because this type of activity has high risks that not many people are willing to take.
However, exports can be defined as a set of goods, services or products sold by a company in a foreign territory. These products are sold with the purpose of obtaining an economic benefit and providing a quality product to the international market. Thus, the company will gain weight and reputation.
Finally, in this article we will show you a list with a series of advantages and disadvantages related to exports. In this way, you will be able to know why exports are one of the reasons why people do not trade.
Mainly, the advantages of exports are related to the growth of companies. This growth is linked to both the economy and the number of clients. Since, by doing international business, profits can increase and you will gain a positive reputation that will bring you more customers.
To be able to carry out this type of exports, it is necessary that your business is prepared to face the expenses that this will bring, because, you will need to invest a large amount of money in both raw materials and personnel to handle the export, to increase your profits and make the business sustainable.
This is where the problems and fears of those people who choose not to trade come from. As we have mentioned, in order to export, it is necessary to invest a very large amount of money. In some cases, this amount is unreachable for ordinary people.
Therefore, exports become a practically unattainable option. On the other hand, there are other factors that cause people to be reluctant. For example, the fact those exports have high risks to be taken, mainly non-payment and mistrust.
When doing international business, there is a risk that you will be swindled or not paid. Mainly due to debts of the company you sell to, which is unable to settle its accounts with you. This leads to an enormous distrust among traders. In turn, it leads many people not to trade and to fear losing their investment.
Fear of bankruptcy
As you can imagine, one of the big 3 reasons people don’t trade is related to fear. In addition to the reasons explained above regarding exports, bankruptcy is the worst fate for a trader, because defaults, debts, and mistakes can lead to the dreaded bankruptcy.
What is bankruptcy?
Bankruptcy is a delicate legal and economic situation that can be defined as the inability of a business to pay its debts, wages and payments. This is because they accumulate more than the economic resources generated by the company. Being unable to economically sustain a project and can only produce at a total loss.
After going bankrupt, the natural or legal person who owns the property of the company becomes known as “failed”. The failed party, after receiving a court sentence confirming the bankruptcy, goes on to a bankruptcy trial. In this trial, it is determined whether the debts can be settled with the sale of the assets of the insolvent party.
In other words, by going bankrupt, the person who owns the business enters a lawsuit. This is where it is determined whether he or she will have to sell his or her property in order to satisfy the payment obligations. This makes bankruptcy one of the main reasons people does not trade, because, the risk of losing everything is very high.
Increased risks from the pandemic
Just now, as we enter a relaxation of quarantine due to the global pandemic, businesses are smiling again. Since, the months of quarantine meant very difficult days for many businesses and traders. In some cases, losses were so exaggerated that many businesses had to close down due to bankruptcy.
Ignorance of the basics of the trade
Finally, the last of the three reasons why people do not trade is related to ignorance of trade itself. Many people do not know how to maintain the basics of running a business. This causes people to encounter a world of definitions when trying to run a business.
Such definitions, concepts and business strategies that must be known inside out, are a headache for first-timers. They become the reason why many people do not dare to trade because they are not in the business of learning, understanding or applying all these concepts.
It is of great importance to learn to differentiate each of the reasons why you do not dare to trade, because this may be stopping you from becoming a trader by profession.
It never hurts to take a look at the different news and articles about the market, in case you are not totally convinced about trying to be part of the market. Remember that there will always be things that may discourage you but in general, the trading world is worth it.
Don’t waste any more time and start trading now!