• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The College Investor

Student Loans, Investing, Building Wealth

  • About
  • Podcasts
  • Research
  • Contact
  • Save For College
      • How To Start

      • How To Save For College
      • How To Pay For College
      • What Is the Average Cost of College?
      • What Is A 529 Plan and Where to Open One in Your State
      • How Much Should You Have In A 529 Plan By Age
      • How To Use A 529 Plan For Private Elementary And High School
      • What Are Qualified Expenses For A 529 Plan (And What Doesn’t Count)?
      • The Best Brokers To Open A 529 Plan
      • Tools + Accounts

      • 529 Plans: The Ultimate College Savings Plan
      • 529 Plan Contribution Limits
      • Prepaid Tuition Plans | What To Know
      • Understanding And Using 529A ABLE Accounts
      • Using A Roth IRA To Save And Pay For College
      • FAFSA Deadlines for Financial Aid
      • CollegeBacker Review
      • Upromise Review
      • UNest Review
      • Other Options

      • Student Loan And Financial Aid Programs By State
      • The Guide To Military And VA Education Benefits
      • How To Fill Out The FAFSA
      • How To Find College Scholarships
      • The Best College Scholarship Search Websites
      • How To Find Grants To Pay For College
      • Pell Grants: What They Are And How To Qualify
      • Understanding Federal Work-Study
      • How To Use A 529 Plan If Your Child Doesn’t Go To College
  • Student Loans
      • Borrowing

        • How Student Loans Work
        • How To Apply For A Student Loan
        • Best Student Loans And Rates In March 2023
        • 10 Best Private Student Loans Of March 2023
        • Best Student Loans To Pay For Graduate School
        • Best Student Loans To Pay For Medical School
        • Parent Loans To Pay For College
        • No-Cosigner Student Loan Options
        • Guide To Income Sharing Agreements (ISAs)
        • Best International Student Loans
      • Get Out Of Debt

        • Best Student Loan Refinance Companies In March 2023
        • Best Student Loan Repayment Plans
        • Best Student Loan Refinancing Bonuses And Promotional Offers Of March 2023
        • Student Loan Forgiveness Programs (The Complete List)
        • The Full List Of Student Loan Forgiveness Programs By State
        • Public Service Loan Forgiveness (PSLF)
        • Top Student Loan Scams
        • Average Student Loan Monthly Payment
        • Average Student Loan Debt By Year
      • Reviews

        • Credible Review
        • Splash Review
        • Ascent Review
        • Citizens Bank Review
        • Commonbond Review
        • Earnest Review
        • ELFI Review
        • Laurel Road Review
        • LendKey Review
        • SoFi Review
  • Investing
      • How To Start

        • How To Start Investing in High School
        • How To Start Investing In College
        • How To Start Investing In Your Twenties For 22 – 29 Year Olds
        • How To Start Investing In Your 30s For 30 – 39 Year Olds
        • How To Start Investing With $100 Or Less
        • How To Give Kids The Gift Of Stock
        • What Is Dividend Growth Investing
        • IRA Rollover Chart
      • Tools + Accounts

        • Best Online Stock Brokers
        • The Best Traditional And Roth IRA Accounts
        • The Best Robo-Advisors
        • The Best Investing Apps
        • The Best Places to Trade Options
        • The Best Places To Open A Health Savings Account
        • The Best Solo 401k Providers
        • The Best Self-Directed IRA Providers Of 2023
        • Best Cryptocurrency Exchanges
      • Reviews

        • Vanguard Review
        • Fidelity Review 2023
        • M1 Finance Review
        • TD Ameritrade Review 2023
        • Charles Schwab Review
        • Robinhood Review
        • Webull Review
        • Betterment Review 2023
        • Wealthfront Review
  • Earn More Money
      • Extra Income

        • 20 Best Side Hustles You Can Start Earning With In 2023
        • 54 Side Hustle Ideas To Make Money Fast In 2023
        • 100 Ways To Make Money In College In 2023
        • 80 Ways To Make Money From Home In 2023
        • 5 Quick Money Making Ideas (That Take Less Than 1 Hour)
        • 10 Interesting Ways You Can Make Money Driving
        • High-Paying Side Gigs That Earn $1,000 or More Per Month
        • The 10 Best Money-Making Apps
        • Paid Surveys: Earn Money For Giving Your Opinion Online
        • 10 Crazy Ways To Make $10,000 You’ve Never Heard Of
      • Build Wealth

        • 40 Best Passive Income Ideas To Build Wealth In 2023
        • 3 Ways To Make $50,000 Per Year Without Working With Passive Income
        • How To Become A Real Estate Investor With Just $500
        • 15 Best Online Business Ideas
        • Residual Income: 7 Super Smart Ways to Build It
        • The Most Common Multiple Income Streams
        • How To Become A Real Estate Mogul With Only $10,000
      • Reviews

        • Fundrise Review
        • RealtyMogul Review
        • FarmTogether Review
        • AcreTrader Review
        • Swagbucks Review
        • Survey Junkie Review
        • TopCashback Review
        • DoorDash Review
  • Personal Finance
      • Banking

        • 10 Best High Yield Savings Accounts Of March 2023
        • 10 Best Money Market Accounts Of March 2023
        • 10 Best Free Checking Accounts In March 2023
        • Best Bank CD Rates Of March 2023
        • 10 Best Business Checking Accounts In March 2023
        • Best Online Banks Of March 2023
        • Best Credit Unions Nationwide Of March 2023
        • Best College Student Checking Accounts Of March 2023
      • Insurance

        • Best Life Insurance Companies
        • Renters Insurance
        • Car Insurance
        • Pet Insurance
        • Umbrella Insurance
        • Disability Insurance
        • Tuition Insurance
        • Travel Insurance
      • Credit Tools

        • Best Budgeting Apps
        • Cash Advance Apps
        • How To Get A Free Credit Score Report
        • Best Credit Monitoring Services For 2023
        • Debt Settlement: Inside The Secret World
        • Credit Repair Explained: Should You Pay For Help?
        • Best Personal Loan Companies And Lenders
        • Online Loan Companies To Borrow From Home
      • Tax

        • Best Tax Software
        • Free Tax Software
        • IRS Tax Refund Calendar
        • Common IRS Questions and Errors
        • Federal Tax Brackets
        • Capital Gains Tax Brackets
        • 401k Contribution Limits
        • IRA Contribution Limits
        • HSA Contribution Limits
  • Awards
  • Search
Home » Investing » How To Overcome The Fear Of Investing In The Stock Market

How To Overcome The Fear Of Investing In The Stock Market

Updated: June 9, 2022 By Robert Farrington

At The College Investor, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners. This doesn’t influence our evaluations or reviews. Our opinions are our own. Any investing information provided on this page is for educational purposes only. The College Investor does not offer investment advisor or brokerage services, nor does it recommend buying or selling particular stocks, securities, or other investments. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. TheCollegeInvestor.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The College Investor does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. TheCollegeInvestor.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

Fear Of Investing

Fear - it's the number one thing holding people back from investing in the stock market. It's crazy how much fear controls money decisions.

We recently surveyed The College Investor readers on what's holding them back from investing (and fear was talked about a lot). Here's some of the things that were shared:

  • I'm uncertain about investing after the stock market crash a few years ago.
  • I know I need to invest but I don't want to lose money.
  • I think about starting to invest almost daily now, but I just can't do it.
  • I want to get a better return on my money, but I'm not sure about the risk.
  • I was doing my taxes and I realized that I really hadn't invested outside of my 401k.  It made me think I could be losing out on $1 million dollars or more when I retire.

Do you see the common fear of investing trends?

  • Losing Money Today
  • Losing Money in the Future
  • Risk
  • Not knowing where to start

All of these are valid fears! And they stem from valid reasons. But the truth is simple: not investing is probably the worst outcome of all (even if you don't realize it), so you need to overcome your fear of investing in the stock market.

Table of Contents
Why Do You Fear Investing?
Accept the Truth
Agree on Change
Secure A New Solid Ground

Why Do You Fear Investing?

Fear stems from the original 'fight or flight" mechanism that we needed when we were hunters and gatherers. It helped us through overriding our senses to keep us out of danger. The feeling of fear overrides logic and other emotions, and takes over your body.

But how does this apply to investing? Because in today's society, not having money is as serious as not having food or shelter was in the Neanderthal days. Our mind knows that money = shelter = food = safety. So, losing money can cause huge amounts of fear.

The trouble is, fear causes you to ignore logic. And you have to battle yourself to accept the truth - and that's just plain tough. But there are ways to overcome this fear, and here are some steps to take.

Accept the Truth

The first step in overcoming fear is accepting the truth about the situation. In our case, the truth is fear of investing. But what does that mean?

It's typically a fear of losing money, or a fear of the risk involved with your money. It could also be not knowing where to start - which increases anxiety that you might make mistakes with your money.

The truth is, investing in broad index funds (or the total stock market) is the best way to grow your money over the long run (i.e. 30+ years or more). Over the history of the stock market, it has averaged an 8% return, which is higher than any other investment or savings account.

The flip side is this - if you don't grow your money by investing, you could run the real risk of not having enough for retirement. Then, all of your fears come true for a different reason - you just didn't invest. If your money only grows at 1-2% per year, you WILL come up short in retirement. All of your fears will be realized when you are living on food stamps in your 80s. That's the truth.

Let me show you:

  • Investing: If you invest $200 a month for 40 years, at a 8% return, you'll grow your money from $0 to $602,000.
  • Saving: If you only save $200 a month for 40 years, at a 1% return, you'll grow your money from $0 to just $22,000. 

That's a huge difference. That's honestly a life or death difference. You should be fearing NOT investing.

Fear of investing: what investing returns vs your savings

Agree on Change

Once you've accepted the truth, you have to agree with yourself (remember, that internal battle) to change. The change can be simple - maybe set an action plan to move towards that change.

With investing, the change has to be overcoming your fear of losing money. So, your change could involve steps:

  1. Educate yourself on investing (read How To Start Investing)
  2. Read a book (read our picks for the best books here)
  3. Open an account - this can be your 401k, or a Roth IRA, or a regular brokerage account
  4. Deposit money into the account, but keep in cash
  5. Then invest a small portion when you're ready

If you setup the plan, you are more likely to accomplish it later. And if you don't know where to start, you can consider something like a robo-advisor or even a financial planner. Check out Vanguard's Personal Advisor Services for a low-cost option.

Secure A New Solid Ground

Finally, you have to build on your bases and setup a new solid ground. Use your action plan and start with education. Once you have an education in investing, you'll notice that your fear will be lessened (simply because you're more confident).

Then, once you have an education, you need to open an account. You don't have to move quickly - progress through your action plan as you feel comfortable, and build from there.

Doing this over and over again will slowly help you overcome your fear of investing and losing money. Education is key.

What other tips do you have for overcoming fear of investing in the stock market?

Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
Subscribe
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of

I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree

8 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Primary Sidebar

Investing Resources

Featured Broker Reviews

>  Fidelity (recommended)
>  Robinhood (recommended)
>  Webull
>  M1 Finance
>  Schwab
>  Vanguard
>  Public

Featured Robo-Advisors

>  Wealthfront (recommended)
>  Betterment
>  WealthSimple
>  Vanguard Digital Advisor

Annual Contribution Limits

  • 401k Contribution And Income Limits
  • IRA Contribution and Income Limits
  • HSA Contribution and Income Limits
  • 529 Plan Contribution Limits

More On Investing

  • Best Online Stock Brokers In 2023
  • Best Brokerage and Investing Bonus Offers In March 2023
  • Best HSA (Health Savings Account) Providers Of 2023
  • 5 Best Investing Apps Of 2023
  • How To Buy Stocks Online For Free
  • The Best Robo-Advisors Of 2023
  • The Best Self-Directed IRA Providers Of 2023
  • The Best Traditional And Roth IRA Accounts Of 2023
  • Comparing The Most Popular Solo 401k Options
  • Top 3 Automatic Investment Apps Of 2023

Footer

Who We Are

The College Investor is an independent, advertising-supported financial media publisher, focusing on news, product reviews, and comparisons.

Connect

  • Contact Us
  • Advertise
  • Press & Media

About

  • About
  • Our Team
  • Podcast
  • Editorial Guidelines
  • How We Make Money
  • Archives

Social

Copyright © 2023 · The College Investor · Privacy Policy ·Terms of Service · DO NOT Sell My Personal Information

wpDiscuz