I recently read an article that discussed the fear that surrounds investing and accumulating wealth. I have to admit, I am slowly overcoming my own fears around investing as well as my own preconceived notions of what it means to be “rich.” As a person in debt, investing and building wealth can seem volatile, uncertain, and scary – it requires a complete money mindset shift in some cases.
This, coupled with the fact that some of the terms around investing are not easy to understand and financial education is not something that is mainstream, investing seems like an enigma. If we don’t understand it, of course, we are going to be scared of it.
As I was reading the article, the author said something that stopped me in my tracks.
He mentioned how so many people are scared of investing in themselves and their future, yet they so willingly invest in debt.
At first, I wanted to say, “No! That’s not me!”
But after thinking about it, signing up for student loans didn’t seem scary at all. It’s the “good debt” after all. I even decided to go to an overpriced private university for graduate school and not bat an eyelash at the $52,000 a year price tag.
Because I was investing in my future…through debt.
Why was I not scared to invest in debt, yet I’ve buried myself in ignorance surrounding traditional investing? Why was I so willing to sign the papers for a debt sentence, rather than actively invest in my future?
I think it all comes down to education, and no, not the kind you pay for. Debt has been normalized in our culture, where investing still seems like something for the elite – something for people with specialized knowledge. Everyone can be in debt, but not everyone can or knows how to invest.
If you find yourself, like me, scared of investing in your future, here are some tips on letting go and getting started.
Learn the Basics
Start learning the basic principles of investing (which you can do on this very site!), so that you can grasp the terminology and understand how things really work. Once you start to understand how the stock market works, investing will seem less foreign.
One of my biggest barriers is thinking I don’t have enough money to invest. While a large sum of money helps you get started, it is now easier than ever to start investing. Online investment firms like Betterment require only $100/mo deposit to start investing. If you can’t do that much per month, they will manage your account for a flat fee of $3 per month. Start small and take baby steps – it will add up over time and get easier.
There is No Reward without Risk
It sounds cliché, but there are no big rewards without any risks involved. There is risk in everything we do, including investing. But you need to start thinking long-term about building wealth. Investing is strategically planning for your future, through various avenues – which will help you in your golden years, so you’re not working far past your prime.
So start now by empowering yourself financially. Take a dip in the investing waters. It's never too late to start.
What fears do you have about investing?