Be honest with me…when you hear the word “investing”, how does it make you feel? Common answers may include overwhelmed, scared, anxious, confused. And for good reason! They don’t teach the principles of how to invest in school, so if you have any of the common feelings, you’re not alone. While it’s perfectly normal to feel intimidated by investing, you have to work past it and get over your fear of investing.
Why? Because investing in the stock market is one of the best ways to build true, long-term wealth. Plus, the earlier you start, the less you need to get started with and the more you’ll have over time. Thanks to compounding growth, time is your friend when investing in the stock market. This is exactly why retirement plans are leveraged in the workforce as a long-term solution to saving for retirement!
Check out the article 6 Reasons to Start Investing Next Year to familiarize yourself with why you should start investing. Then, come back here and learn 4 tricks to help you get over your fear of investing and start taking action!
4 Ways to Get Over Your Fear of Investing
#1 Ease into investing with user-friendly options
If you’re new to investing, just hearing the word can freak you out…let alone actually getting started. The good news? Nowadays, there are plenty of user-friendly options that help users get started with investing. The first option I recommend is investing through your retirement plan.
Most employers offer some sort of retirement plan to employees. This could be a 401k, TSP, 403b or pension. They all do the same thing – help you invest/save for retirement. So, whatever option is available to you, start contributing.
What does that mean? Well, it means you designate a specific percentage of your income to be saved in the retirement plan every pay period. From there, you’re either automatically placed into investments or you can select your own. Check out How I Picked my 401k Selections for the strategy I used. Voila! Now, you’re already investing!
Other user-friendly options include Public and Betterment. Public is a digital investing platform that lets you trade individual stocks, funds or cryptocurrencies. If you’re looking to purchase shares of Google, Facebook, or any other company, Public makes it very easy to do.
Betterment is even more user-friendly than Public, but you can’t trade individual stocks. If you want curated investments, set up and managed by professionals, Betterment is for you. All you need to do is set up your recurring deposit and Betterment does the rest. Just sit back and watch the magic happen.
#2 Leverage your budget to feel comfortable with how much to invest
One of the biggest mistakes a person can make when investing is allocating too much towards investments. Now, you may be thinking “how is it bad to invest too much”? The answer is this: when you invest, you’re doing it to get a return. Sometimes, that means keeping your money in that investment for years.
If you invest too much and leave yourself without a means of covering your priorities and expenses, you run the risk of trading your investment for a loss. A loss when investing is NO ONE’s goal!
Instead, look at your budget to see how much you can realistically allocate to investing. You want a number that you won’t miss, and that won’t impact your other goals and priorities. Everyone’s number will look different, and the number may change over time. The point is to find the number that works for you and take action.
Andre of Millennials Next Door and I discussed how to determine how much to invest in the CGS Podcast Episode How to Get Started with Investing. Definitely check it out if you want some guidance on where and how to start!
#3 Learn more about how to invest
Want to get over your fear of investing? Start learning about how to invest! Nothing makes a person feel more confident and comfortable about a subject than knowledge and experience. Experience comes with taking action, but knowledge simply requires a personal drive to get going!
There are so many resources out there to help you learn about investing. Books, blogs, podcasts, influencers, workshops, courses, classes and more! Start doing your research and start learning about how to get started with investing. This will help you feel confident about executing your own trades.
Save your spot in my Introduction to Investing Workshop to learn more about what it takes to get started with investing, and so much more!
#4 Follow the right influencers (look for people who know what they’re doing but make it easy to understand)
As I mentioned above, there are plenty of social media educators and influencers that can help you learn about investing. A word of caution though. Just because someone has a lot of followers doesn’t mean they know what they’re talking about. Look through a person’s reviews and testimonials before trusting their words.
Also, consider looking for people who know what they’re doing and/or talking about but also make the topic of investing easy to understand. Sure, following Warren Buffet will be educational, but will you understand the financial jargon he uses?
Whether you start with one item on this list or tackle all five, each of the items on this list will help you take your finances to a new level. The items on this list will produce the long-term results and success you’re worthy of. You can do it! Just stay the course, stay consistent, and stay motivated. Have you done or started doing any of these things? Drop a comment below to share!