Warren Buffett, Jesse Livermore… There have been so many traders and investors that have built their fortune through the markets, and have provided so many inspirational stories and role models to learn from. But why do people still hesitate when it comes to investing? The main reason is fear of the unknown. People associate investing with fear and stress. But if you know the source of your fear, you can learn how to fight it. So, I want to share easy tips how to fight your (probably irrational) fears.
1. Learn, learn, learn. As I already mentioned, fear of the unknown is the most common for beginners. But let’s be honest – it’s easy to overcome it. All you need is to start learning the markets and economy. Knowledge is the key to successful investing. It’s the only way to making right decisions about buying and selling stocks and building your portfolio. Learning how to invest and understanding what you’re investing in will give you the confidence that you need over time to start putting your money into the stock market. Want to be comfortable? – Start learning.
2. Take action, even with small investments. Fear of losing is normal, but you have to build confidence. Only experience can help you to overcome it. Don’t wait, take action. If you have a fear of losing your capital, start with small investments, you can always invest more. But the less fear you have, the better decisions you take. As result, you become confident and comfortable with investing.
3. Set realistic goals. Very often, beginners expect to get rich very fast. But building wealth takes time and dedication. Dreamers will be washed away in this business. And again after experience big failures, they get double the fear of investing. Set realistic goals and timing.
4. Experience is always positive. As in any other business, you will have success and failure. But I want you to remember both are valuable experience. If you failed, re-evaluate your strategy and your approach. Failure is the opportunity to start again. Only this time smarter.
5. Build your strategy. Learning from others is very important and helps to get knowledge faster. But don’t try to copy somebody’s strategy, even if it’s successful. All investors have different goals, risk tolerance, capital, etc. Build your strategy based on your individual expectations and situation.
For all beginners investing is like driving a car at night. You see only a small part of the road, but as you move on you will be able to see another part and step by step get to your destination. The more prepared and experienced you are, the easier you will find this phase. When you have a rough idea of your goals and approach, you will see more clearly the way to get there.
Investing is a great way to build your fortune if you learn and work to reach your goal. You can always limit your risk and losses. And what is even more important you will be financially free and able to pay your kids’ education and retire. You control the risk of losing and you control your future. It’s really scary to be unable to have money in retirement. If you try to avoid the risk all your life, you likely will fail by default.
I know sometimes it’s so difficult to make first step, but you have to do it. All great investors were in your shoes, but one day they were strong enough to start. Investing is a life-long learning process. Each your decision will bring you to new level. Continue to grow as investor and your gains will grow too.
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