I have been educating and talking to people about the importance of investing. One thing that always comes up during the conversation is the fear of losing money. The truth is those people are not alone. A recent survey shows that over 60% of Americans are afraid of losing money while investing. To learn how to overcome the fear of investing, you have to start by educating yourself and many other things.
My husband is still mad at me to this date because I told him three years ago we should not invest in AMAZON because of the cost of the stock. At the time, the price was around $800 (AMZN is trading around $2700 at the time of the time of this writing). Because of fear and lack of education, we missed a great opportunity. I was afraid we would lose all of our money without understanding the value of the company. So if anything, I do have some of the experiences many of you have. So what are the four ways to overcome your fear of investing? I went through these exact ways to get to where I am at today, so I hope it helps you as well.
Below are the four ways you can start taking control of your future by overcoming the fear of investing.
EDUCATE YOURSELF
The good news is, if you are reading this blog post, it means you have already started thinking about investing, or you already started but have not overcome your fear. We all have to start somewhere, and today’s internet world makes investing easier than before. I purchased many finance books and read all of them. I read several articles online from reputable sources and listened to many podcasts (I still do all three by the way). Through reading and researching, I realized one of the ways to build wealth is by investing in the stock market.
START SMALL
One of the first stocks I purchased on the stock market was $25 per share. I thought to myself, that’s only $25. I spend that for a take out without thinking about it. So if I lose that money, what’s the worst-case scenario? I continued to add more shares gradually until I became comfortable buying in bulk at a time. Putting a lump sum of money can be scary, but once you have mastered it by doing it gradually, you become comfortable over time.
IT COST TOO MUCH TO BE SCARED
The fear of investing can cost you a lot of money. The wealthiest people in the world do not only save their money, but they also invest. The investment can be in real estate, stocks, bonds, and or commodities. If you put your money in your savings account, you will not build any wealth. You may lose money over time due to inflation. Once I understood this simple principle, I gained so much confidence. I was ready to have my money work for me.
MANAGE YOUR EXPECTATIONS
If you are going to be investing, you have to think long term. When you start investing with the idea of quick returns in a matter of days or weeks, you will be highly disappointed. It takes years to build wealth. If you don’t see the results you want to see immediately, this can cause you to stop. You may lose all your money within days, and that can increase your fear. However, the stock market has returned about 10% average every year. If you are in it for the long haul, your chances are real.
RELATED POST:
- Investing as a Beginner: The ultimate Guide
- 3 Ways To Diversify Your Investment Portfolio
- How To Identify Good Dividend Stocks
Investing just a little bit of money over a long period can help you to become a better investor. It is better to start now than later because of the time lost in the stock market.
To help you get started on your investing journey, I launched the stock analysis coaching services to help you get started. Click here to sign up.
Till Next Time,
Charly
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