Tips for Getting Over Your Fear of Investing

If you're a Millennial who remembers the Great Recession, it's normal to have a fear of investing. Here's how to get over it.

The Great Recession was about the time when I entered young adulthood. It was a time when jobs became scarce, the stock market took a tumble, and everyone who was investing seemed to regret their decision. I remember those days, primarily because the atmosphere involving money was palpably tense. 

It was a time when we were barraged with news headlines of once-wealthy investors who lost their homes, of business owners shuttering their doors, and of people who ended up getting arrested for insider trading. 

Even today, the Recession's left a huge mark on my generation. If you look at how much Millennials know about stocks and investing today, it's clear that most people immediately shut down the moment the stock market is brought up. 

Simply put, most Millennials do not feel comfortable putting themselves in a position like what they saw their parents struggle with. Who could blame them, either? 

It's easy to see why a lot of Millennials have a notable fear of investing, but the truth is, we need to invest if we ever want a shot at retirement. Here are some tips to help you overcome that fear, from someone who's done it themselves. 

Start small.

The best tip I can offer when it comes to overcoming your fear of investing is to take it all a little bit at a time. This is one thing that used to be impossible to do since most investment firms of the early 00s would typically insist on a minimum trade of $200. 

Having seen the fear young people have of the market, many stock broker companies have worked on creating unique micro-investing apps that allow you to invest in increments as small as $5, or to just round up spare change to create a savings account. 

Losing $5 wouldn't scare you, would it? 

If you use one of the best robo-advisor apps to allow micro-investments, you would get professionally managed investments that could be upped for less than what you pay for coffee every day. 

Acorns is a great example of an app that allows you to invest all the change you'd otherwise leave sitting in a bank into a stock portfolio that's tailored to your needs. 

Learn from the past.

Whenever there has been a major stock market crash, there have always been warning signs that people should have noticed. The easiest way to battle your fear of investing is to learn how to spot signs that it's time to sell off your stock.

No one ever said you have to lose money when the market turns down. At times, you might actually make a massive profit. All of the greatest stock market trades in history happened because savvy investors took time to notice that something wasn't right with the stock market.

Arm yourself with knowledge about past crashes, and you'll have a brighter future with a lot more peace of mind. 

Speaking of which, you should also arm yourself with knowledge as soon as you can.

Part of allaying a fear of investing is to know what you're doing. After all, if you're totally clueless about investing, you're going to panic. No one wants to be in a situation where their lack of knowledge will cause them to lose money. 

It's so easy to be intimidated by common stock market terms, especially if you don't have anyone around you who can explain them to you. Sadly, this is often what dissuades many young people from investing—even though there's really no excuse. 

Knowledge is power, and you can empower yourself with online courses. With courses from Udemy, like Stock Market for Beginners, you can learn all the basics on how to select good stocks. Sooner or later, you'll end up being able to invest like Warren Buffett himself. 

Remember that there's power in numbers—literally.

Have you ever gone through a seriously rough time in your life? If you have, chances are that you already know how comforting it is to have people who can offer you company, tell you that you're not alone in how you feel, and also give you good advice.

While this may be true in just about any arena, having friends who invest or even choosing to join an investing club is a great way to overcome a fear of investing. It's not as scary when everyone is doing it.

Remember that you can use investing to make a statement, too.

Do you hate seeing unethical companies make a profit? Do you want to see smaller businesses break the glass ceiling? Do you want to see more green energy groups or more free trade companies thriving? Well, the easiest way to make it happen is to put your money where your mouth is.

Sites like Swell Investing allow you to invest in companies that have ethical goals in mind—including such goals as green energy, clean water, and of course, fair trade. Many people who are worried about where their money is going to will overcome their fear of investing when they realize their cash can make the world a better place. 

Consider investing in low-risk options, instead of regular stocks.

Many people lose sight of how many different kinds of investments there are—and this can cause them to develop a fear of investing in certain situations. If the only investments you really think about are stocks, it's easy to feel on edge about it.

Stocks can fold. They don't have a guaranteed return. In some cases, people can lose everything if they aren't careful. However, they are not the only investment out there.

Many high-yield investments offer guaranteed returns, which means that they could become seriously impressive forms of passive income for you. If you're really all about lowering risk, you might want to look at this list of low-risk investments for beginners

Consider taking a look at what would have happened if you invested long ago.

The easiest way to overcome a fear of investing is to replace it with a healthy fear of missing out. When you leave your cash in a savings account, you're losing money. This is because inflation outpaces bank interest—and because general stock market growth outpaces it. 

Financial Engines actually helps out those who are trying to bite the bullet by creating a site that allows you to find out how much you would have made if you invested in a stock years ago. Give it a spin, and you'll understand how much you may be losing out just by ignoring the market. 

Remember that you're going to need to invest if you want to retire.

Look, I get it. As Millennials, the idea of retirement is pretty laughable. We have basically been shafted in every single way possible. We even joke about it from time to time.

However, there will be a point where our bodies will not want to work anymore—and what happens then? Chances are we will not be able to rely on the government to bail us out.

If you want to be able to afford to live in America during your old age, there's a fairly high chance that you will not be able to do so on your salary. Social security will very likely be gone by the time we get to age 60.

The only way to possibly retire wealthy? Investing. Your fear of investing should vanish, realizing that the alternative will most likely be a life of poverty. 

If it's really bothering you that much, some empowering reading might help.

It's amazing what a good book can do when it comes to confronting a fear of investing. Robert Kiyosaki's Rich Dad, Poor Dad was one of the first mass-marketed personal finance books to help talk mainstream America out of their fear of investing in the stock market, real estate, and more. 

Kiyosaki's book is notoriously "feel good" in tone and will talk sense into you, quick. 

Pull a Nike, and just do it.

Sometimes, the easiest way to overcome a fear of investing—or anything, really—is to face your fear head on. Go ahead. Download an investing app. Do your research. Plunk down some cash. Breathe.

That wasn't so hard, was it? 

Now Reading
Tips for Getting Over Your Fear of Investing
Read Next
Best Personal Finance Blogs to Read