How I Overcame My Fear Of Investing In The Stock Market
If you're anything like I was, you may have a small amount of fear related to investing your hard-earned dollars into the stock market.
Honestly, it’s a completely rational fear. We work hard for our money, and investing it into something as perceivably as volatile and unpredictable as the stock market can seem like madness. I remember my mother and grandmother telling me to save my money. They never told me about investing — funny how those things stick with you.
A little about me …
I married young and had kids at an early age. I didn't grow up around money, and in the early years of my marriage, my wife stayed home with our children, and I wasn't making much more than what was required to pay our bills.
Any small amount of surplus was put straight into a savings account. In my early 20’s, I didn't know much about investing and how the market really worked. I knew many people had become wealthy, but I thought that came from timing the market, day trading, and the like. All of those ventures seemed a bit unreachable to me, so I kind of wrote investing in the stock market off (little did I know my 401k at the time was invested in mutual funds).
I also was uneducated about compound interest and how it can be a powerful force in the wealth-building process. I didn't know how the wealthy became and stayed wealthy. My knowledge of wealth building was not much more than stashing away cash. When you think of becoming a millionaire, it can seem impossible when you think of how many of your own dollars you will have to put into an account to hit that million mark. Little did I know, this isn't how the wealthy become wealthy. They get their money working for them and watch it grow.
Here is a good explanation of compound interest according to Kate Ashford of Forbes …
“Compound interest is when the interest you earn on a balance in a savings or investing account is reinvested, earning you more interest. As a wise man once said, “Money makes money. And the money that money makes, makes money.””
To sum it up, I was afraid or apprehensive of investing because I was uneducated. I didn't have a baseline of good knowledge to lean on.
So how did I overcome that fear?
It’s quite simple. I became sick and tired of not gaining any traction on my wealth-building journey. I became fatigued with working hard, paying my bills, and only having a few dollars to throw in my savings account. I knew my formula of work, spend, and save a little wasn't going to get me where I wanted.
I educated myself on what other formulas people who were wealthy used to become wealthy. I learned that it isn't all about a large income. It isn't about working 80+ hours a week. It wasn't about drop shipping, affiliate links, or flipping things on the weekend. It was about budgeting, discipline, goals, and a steady dose of diligent investing.
“I learned that it isn’t all about a large income. It isn’t about working 80+ hours a week. It wasn’t about drop shipping, affiliate links, or flipping things on the weekend. It was about budgeting, discipline, goals, and a steady dose of diligent investing.”
I know many people have become wealthy doing the things I mentioned above, but that isn't how I wanted to become wealthy. I wanted my wealth-building to be extremely practical — something that anybody could do.
After educating myself, I executed. This was the scary part, but I slowly began investing. I opened an Acorns account and invested literally a few dollars a week, something I didn't even notice being gone from my account, and I did it for months without thinking about it. I built the habit of investing, even though it was a small amount, and I made it a part of my everyday life.
The next step, and the most important, was I began winning. I started to see my account grow. I started to notice my money working for me. I received freaking dividends for the first time and it all started to click! This was the formula I wanted to pursue, and despite my apprehension, it is a formula that works.
Now, since I have tasted what it is like to have my money work for me, I have become addicted to this formula. I love investing every month! It’s something I take great joy in doing. I continue to expand my knowledge, refine my processes, and I also remember to enjoy my money as well. This formula of investing has become a part of my everyday life.
To everyone out there who may be apprehensive to start investing, I would advise you to take a path similar to mine. It doesn't have to be flashy; in fact, it can be incredibly practical and easy.
Educate Yourself — Read books, listen to podcasts, watch quality content on YouTube. Learn how everyday investors have done it before you.
Execute — Start investing, but start small. Make small contributions to your investment account every week and do it for a long time. Maybe a long time is a few months, and maybe a long time is a few years, but before you know it, you are going to look at your account balance and be shocked how something as small as $5 a week can accumulate.
Win — This is such a key step. Invest your money and watch what happens. I invested in Index Funds and ETFs. I let those investments sit, and before I knew it, my money was working for me. My money was making me money. This is the fun part!
Refine — Once you get a taste of winning, you will be motivated to win more! The important part of this stage is to ramp up your investing and continue your education so you can become more proficient with your process.
I hope these words motivate you to take the next step. On the other side of fear and ignorance is prosperity. It is available to you! Go out and grab it.
Talk soon,
Jarod Dickson
www.millennialecon.com