Month 2: Pushing Past the Fear of Investing 📌
Updated: Jul 9, 2019
This month is all about unblocking your fear of taking full agency of your dolla dolla bills ya’ll and trusting your hard-earned cash in Mr. Market – dun, dun, dun!
So you’ve been hurt by him before – maybe you’re like me and witnessed first-hand the Great Recession’s (combined with an wicked-stepmom divorce) devastation of your parent’s finances in the years leading up to the biggest purchase of your life: university. Maybe it wiped out your college fund, maybe your parents or other people you cared about were forced into bankruptcy, or maybe you/they lost your/their homes because of the crash.
This is serious trauma, and jading af. But as my therapist reinforces: although you’ve been v. fucked over in the past, you have to find a way to learn to trust again, and eventually you’ll stop using humor as a defense mechanism and be able to let someone/the market in. REPEAT AFTER ME: The Past Has No Power. Namaste 🧘♀️.
As if our harrowing personal experiences with the market weren’t painful enough, there is a HUGE gender investing gap as women generally invest less than men, and when they do, it’s later on in life. We just aren’t socialized to invest at young ages the way men are, leading us in many cases to believe that we can’t be successful investors #bigfacts.
HOWEVER, when we do invest, we’re actually better at it than men - 🎶 if we have to, we can do anything, we are strong, we’re invincible, we are woman, hear us roar 🎵 – aka if we can conquer our biggest baddest fears, including investing, we have the opportunity to become pretty damn good investors. Time (and practice) heals all wounds, so let’s dive in.
Get Positive, Be Inspired
A Series of Cringeworthy EventsJen SinceroIt all starts with acquiring the right headspace to find the confidence to invest. Greattt – love being told that I just need to “worry-less” to cure my anxiety … how do I actually change my mindset? Well, finding a way to truly believe that you can and WILL be successful at making money is cri-ti-cal. I’m not a famous, experienced life coach, motivational speaker, or New York Times bestselling author (yet – stay tuned for the next great American Novel: .), but you know who is?
Why am I bringing up this random lady? Because she is not random, she literally wrote the book on mastering the wealth mindset and manifesting Scrooge McDuck level money through your thoughts. You are a Badass at Making Money is all about dipping out of the fearful, self-doubting head space that’s preventing you from making the money of your dreams. It teaches you how to invert your own impoverished narrative. On top of that, it’s hilariously entertaining, so drop what you’re doing right now and go read it. In fact, this blog wouldn’t have existed had I not read Sincero’s life-changing book. Anticipate our book review coming soon to a theater near you!
"Riches come to those who believe anything is possible even when all signs point to No Way in Hell." - Jen Sincero
Know How Your Investments Can Earn You Cash
Learning to trust that investing will make you money requires understanding how your investments will increase your fortune. There are several ways you can grow your wealth by investing in the stock market, ca-ching!
1. The price of the stock increases
For example, you buy 5 shares at $10 per share for a total of $50 (5 x 10 = 50). A month later, the price of those shares increases to $11, making your OG purchase worth $55 (5 x 11 = 55). Congrats, you've just made $5 (55 – 50 = 5) #math.
The company you own is feeling v generous and shares a percentage of its profits with you #paidintheshade.
3. Compounding Returns
AKA the returns you earn on your returns AKA stacks on stacks AKA what we call hittin’ #poundtown.
The latter is INCREDIBLY powerful and can be the difference between working until you kick the bucket and ordering buckets of champagne islandside in the Maldives at 50. Read more here.
Take Baby Steps
No one will ever be able to time the market perfectly, causing a lot of fear when it comes to investing. While there are rigorous valuation methods and tons of research that goes behind choosing quality companies to buy, there are ways to get your feet wet ASAP without having to learn all that big girl knowledge. After all, time spent in the market is better than timing the market. This is because historically, the market has gone up over time, and many of us are young enough to ride the waves of the market for 50+ plus years, most likely leading to a net increase from today.
So one method you can employ before becoming more comfortable in performing regular, more rigorous investment research on specific companies is called dollar cost averaging. This technique involves automatically transferring a set amount of money from your paycheck (e.g. $100) at the same time every month into a brokerage account. This might be very similar to what you’re already doing with your savings or 401(k), except that you’re parking your money in something like an index fund or exchange-traded fund (ETF).
Inform Yo’ Self and Don’t Listen to Randos
Educating yourself is the number one way you can boost your self-confidence and lower your anxiety when it comes to investing. This doesn’t mean obsessively monitoring prices, which is actually not recommended nor productive as we plan to hold onto our companies for a long-ass time. Our fave way to stay-in-the-know is through keeping up with the financial news and listening to investing podcasts. Below are some of our daily and weekly go-to’s:
Motley Fool Market Foolery
Motley Fool Money
The Wall Street Journal’s Your Money Briefing
Numbers by Barrons
TIP We Study Billionaires
NPR’s Planet Money
You Know More Than You Think
Finally, realize that you know more about the market than you think you do. We're all consumers of many products and services at this point in our lives. We make decisions everyday about what to buy and where to buy from based on signals. Consciously or not, you are assessing the competitive advantages of a company, whether it’s through pricing, values of management, durability, successful branding, popularity, location and convenience, etc. Mindfully performing these assessments with purpose is a lot of what investment research includes – so unless you live under a rock ala Patrick Star, you absolutely have the tools to kill this!
See you next month <3
I need a dollar dollar, a dollar is what I need,
*This post is for your entertainment and commiseration only, we are NOT your financial advisors and have not assessed your financial situation as your fiduciaries (duh), aka don't make any big money moves solely bc of us - we are all in different places in our financial journeys~*
📅 Month 2 To-do's:
#financialindependence #mindset #stocks #finance #stockmarket #retireearly #Blog #growwealth #FIRE