Final answer:
Most people don't regularly invest because of multiple reasons such as lack of financial goals, understanding, and a preference for immediate consumption. Compound interest plays a significant role in growing savings. Government involvement helps promote adequate savings for retirement.
Step-by-step explanation:
The main reason most people don't invest on a regular basis, according to Foolproof, is not explicitly listed among the proposed options, hence we can infer from the provided information that it could be due to a variety of factors. These factors include lacking a financial goal, which is essential for saving and investing; facing difficulties in understanding complex financial products; and tendencies towards instant gratification over long-term saving. To develop the habit of saving, one could set clear financial goals and start saving early in life. The difference between saving and investing is that saving typically involves putting money into safe accounts with a lower rate of return, while investing aims for higher returns but comes with increased risks.
Interest rates, or the rate of return on savings and investments, can greatly affect how money accumulates over time through the concept of compound interest, where interest is earned on the initial principal and on the accumulated interest from previous periods. This can significantly increase the amount of money saved over the long term.
The government is involved in savings to encourage and sometimes mandate savings for retirement due to people's natural tendencies to under-save for their future needs. Government policies and programs can provide a framework to ensure individuals have sufficient income during retirement.