afraid of investing in the stock market

3 Ways to Stop Being Afraid of Investing in the Stock Market

Investing: so hot right now.

Within the disaster that was 2020 and the confusion that is 2021, investing has emerged as a every day topic of conversation, endless TikToks, and almost unyielding Twitter discourse. What was once the dark handsome stranger of the personal finance world has become the main character.

As engaged and excited as people are about the stock market and it’s wealth building opportunities, people are also afraid of investing in the stock market.

person on the background with text 
investing in the stock market

And it’s understandable why. Investing has many layers to it and can get complicated quickly, depending on what you’re trying to do. Add to that stiff jargon, a wall of predominantly white and male voices as the experts, and investing can seem an unfriendly place.

But fear not, because around here we are literally in the business of making money easier and more accessible for all. (We’ve already de mystified six common investing terms for you here, and you can get our totally free retirement account worksheet here.)

So let’s talk about how to stop being afraid of investing in the stock market right here and now.

3 Ways to Stop Being Afraid of Investing in the Stock Market

Fear Number One: You Don’t Know WTF You’re Actually Doing

This fear is rooted in lack of knowledge AND in the very real knowledge roadblocks in the financial system. If no one in your life has ever taken the time to either A) explain investing to you or B) show you tools that can explain investing to you, how do you learn to invest?

You probably don’t! Of course we are now blessed (cursed?) to be living in the digital age and search engines are our friends. You can find a book, podcast, blog, or social media post about anything under the sun.

Which means that there is almost endless information to consume about things like investing! This in turn means you have endless tools to quash that fear of investing in the stock market, because someone, somewhere, has the answer you seek.

The trick here is to figure out what question you’re really asking. Are you actually saying “I do not know anything about the stock market in general” or are you saying “I do not believe myself to be a good money manager?”

Because these are two very different things! The first has an answer that any financial expert can give you. (You can sign up for our investing course right here for accessible investing education!) You are the only one who can address the second.

So, to fight back this fear, get specific about where the fear is really coming from.

Fear Number Two: You Will Lose Money

Good news here; there is a 100% chance that at some point you will lost money in the stock market! It’s an inevitability, so don’t worry about it!

All investors, even the greats, lose sometimes. Warren Buffett lost $1 billion in 2 days in 2020!

The real fear here is not so much the loss; it’s the fear of not being able to replace what you’ve lost.

This fear is rooted in a belief that the money you earn has a limit AND is rooted in the fact that our world has systemic bias against certain people. There is a gender wage gap and a racial wealth gap. There is workplace bias. Racism and sexism and homophobia and ageism and all sorts of terrible shit that results in some groups of people earning less than others are very real!

Which makes a fear of losing money VERY understandable. If it takes you a whole week to earn what your male or white co worker makes in two days, you probably don’t want to play fast and loose with that money.

To fight back against this, you have to weigh the risk that comes with NOT investing.

It is a financial fact that inflation happens every year and is not going anywhere. Your savings will lose value over time to inflation alone. Add in rising cost of living and low savings interest rates, and NOT investing is a HUGE FREAKING RISK for your money. Much more so that the risk you take by investing.

We cover both the risk of not investing AND how to eliminate your fear of investing in our course!

Fear Number Three: You Feel Paralyzed

Whether it’s because of information overload or plain old procrastination, you are stuck in the same spot.

You’ve already taken the first step to beating this fear: you’re reading this!

The next step here is to simply break the process down for yourself. Read one chapter of a book. Read one other blog post (like this breakdown of a women getting started investing). Come to one “How to Not Die Broke” class.

It’s much easier for us to get over our fear of investing in the stock market if we take things slowly. No one is asking you to become a professional trader or a CFP today. Take one step, settle into it, then take another.

You absolutely can and will get over being afraid of investing in the stock market. I believe in you! This is not an unbreakable code. Do what you can, with what you have, and then do a little bit more.

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