Overcoming “FEAR” of investing


I consider investing is the most important element of everyone’s financial future — but sometimes it takes a while before we really get it, so to speak.

Fortunately, I think it’s fair to say most of the readers here at Stock Market Beginners get it. But I’m willing to bet that there are still a few who might get the concept but have yet to put it into action.

As I read an article that defines F.E.A.R it says “False Expectations Appearing Real”, that is how I came to know that we live a life of choice. Everything we do everyday is a matter of our personal choices and nothing else.

Biggest success factor: Take the plunge

There are a lot of people who have the knowledge on investing and they even believe that it is good for them. But sad to say that they do not take the action to be an investor. I call them investing believers but do not have the desire to be investing doers.

A lot of reasons why these people does not transform themselves, and these come immediately into my mind:

  • They don’t think they have enough money.
  • They think of losing their money if they make mistake in investing.
  • They have fears about inflation or other extraneous factors they can’t control, and so forth.

Yes, those reasons above may sound valid, but no matter how valid the reasons sound, they still don’t remove the simple fact that, if you don’t invest now (and you continue not to invest), you will discover somewhere down the road that retirement is not an option for you.

From the time I started investing I’ve met people who invest and those who don’t, and I have discovered something that people who get to start investing in any form start at it. And the one’s who don’t, don’t.

Action reinforces action

The best way to start investing is simply to get started investing. By taking actions to what we have in mind (an investment, if we will), we begin to acquire an emotional attachment to it. From then we will begin to start sacrifices to keep that thing going, because the human mind is designed in such a way that once we devout ourselves to what we desire to achieve it will transform into a habit.

Just like those people who do not invest they will to continue to nod that investing is essential to their future financial health and continue on without investing. They commit themselves not to invest, because of the fear that they have in their mind about investing, and with that they take an opposite action, and it will be reinforce as they to continue to think of their  fear.

How do you break the inaction mindset?

In every self-help books that I have read, the key to success, therefore, is to simply break the bad habit/mindset and replace it with the healthier one. Easily said, you might say, but …

In the real world that we have, I’ve concluded that the biggest thing holding people back from getting started investing is very simple. They just don’t know where and how to get  started.

I know it held me back for 3 years from the time I learned how to invest into the stock market and the biggest thing which held me back though was, I didn’t know how to get a stock broker to start my stock market investment.

But how do we get to to break this inaction mindset was two things:

1. Knowledge

The more we learn about any subject, from exercise to investing, the less intimidating it becomes. More knowledge also adds mental ammunition to take the jump and stay on course, all the way to retirement. Also, the more knowledge we have, the more assurance we will feel that we’re not making obvious mistakes. There are many resources, free and paid, to learn more about investing.

2. Simply setting aside money

As the years gone by until the time I found my stock broker, I was setting aside a certain amount of my monthly income. First I do it manually through personally depositing it and later on I apply an automatic deduction of my payroll to my deposits. With that it won’t be a hassle anymore in part to personally deposit and it gives me more free time.

Making the decision to cut back is the hard part. Once you have done that, you get to the choice of where to put that money you set aside each month.

Play to your strengths

I believe there is no one-size-fits-all answer to investing, whether it be for retirement or any other future purpose. For instance, We consider these two type of investors, Mar and Jejomar. Mar worked an ordinary job his whole career, never making much more than an average income, and yet today he’s a millionaire. His strategy: investing in individual stocks with a conventional investing account.

Jejomar, on the other hand, has an auto repair shop, and has for many years. He knows nothing about index funds or anything traded anywhere. His wife works for a realtor, and so they began buying rental homes a decade or two ago. He’s a hands-on type of guy, used to fixing stuff and dealing with customers, so to him and his wife rental property was (and still is) a no-brainer investment. In every recession, they picked up a house on the cheap, and all their houses are cash flow positive today. They are saving now for the next recession, when they hope to pick up another bargain. Jejomar is still much younger than Mar, but it doesn’t take a rocket scientist to see that he will probably be in the same position as Mar when he reaches retirement.

The point is: Figure out who you are and what you’re comfortable with, and go with that. Mar just loves his job and career; and if he started with rental properties, it wouldn’t have taken him long to just say, “Oh, just forget it!” So, don’t listen to what others say you should invest in: Consider all the options and pick one or two investments that resonate with you.

Keep it simple at first

But whatever your investment interest is, start out with something simple. The two simplest options are:

  1. Sign up for a savings deposit account or similar plan at work, into which you put an amount you’re comfortable with every pay period. Automate that transaction, so it gets taken right out of your paycheck and you never see it.
  2. If you don’t have a job with regular pay, you can simply start your piggy bank and eventually deposit in a bank.

That is simple and easy.

Once you’ve stayed with the savings account or retirement plan for a year or so, you’ll discover that, while you weren’t looking, that switch in your mindset shifted from trying to justify not investing to trying to justify investing.

You are on your way to a secure financial future!

The important thing is not what you start with, but that you get started. The sooner you start, the more options you will have in your future when retirement beckons.

Future flexibility

One of the benefit of investing is that it will not leave us being locked in. The return of it can have you more options to diversify your investment allocations. It may be to open a new business, to buy more company shares, and any other investments that can grow your money. Also with great wealth it is more flexible to help other people in need especially your love ones and friends. That is the beauty of accumulating wealth at an earlier stage in life.

But you’ll never have that flexibility if you have nothing invested.

There is no way you will enjoy retirement or financial freedom later in your life if you don’t invest. If you have been holding yourself back by not knowing where to start, be held back no more.

P.S. Have you had to overcome the fear of investing? What advice would you give to someone that is trying to overcome their fear? Please share on the comment below.

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