Do you give a deer-in-a-headlamp look when your friends start a discussion on investing?
Do you become defensive when your partner brings up the issue that you should start investing for your kids’ college education?
Do find yourself thinking, “Investing is risky” when a friend brings an investing deal to you?
If you are nodding yes to any of the above-mentioned comments, you may have the fear of investing
In his book rich dad poor dad, bestselling author Robert Kiyosaki explored the basic emotions people deal with when it comes to investing money.
Robert Kiyosaki concluded that there are two major emotions that influence how an individual invests money: greed and fear.
In fact, Kiyosaki avers that greed and fear had a major impact on your investing choices.
In this article, we will look at fear, and dealing with fear in making investing decisions.
Fear: the silent dream killer
Fear is the main reason most people remain broke, never invest money and struggle financially.
The US National institute of Mental Health did a survey that found that 60 percent of the things we fear never happened.
The fear of losing money is so powerful that most people avoid talking, and taking action about their financial future. Many working adults have allowed fear to paralyses them from pursuing financial freedom.
The good news is that you can overcome fear and start taking action on your plans for financial independence
Before we talk about dealing with fear, I think it’s important to look at the why people, are fearful of investing and losing money.
I believe many people are afraid of investing for a number of reasons.
The first may be as a result of their upbringing. I remember growing up in a family where my parents never talked about investing money. Most of the investing my father did was for survival. I never heard my father talk about saving for retirement, starting a business or buying stocks.
My family members never talked about investing except when they wanted to vilify a wealthy person. I grew up hearing many people in my community calling individuals who owned a business crooks.
However when the same persons who belittled wealthy people are broke, guess whom they turn to for assistance? They all run to the same wealthy people they criticize for help.
I don’t know about your upbringing… But for me who grew up in a family where both parents had a fear of investing money because they thought it was risky… I nearly developed fear for money investing and starting business.
The other reason many people have a fear of investing is past mistakes and losses
I meet a lot of individuals who have made wrong investing choices in the past. As a result, they have lost money and their self esteem from the experience.
For many people, the experience of losing money bruise their ego to the point that they lose confidence or shy away from investing totally.
This is understandable because…
If you have lost money, you are likely to be cautious with money. You may avoid investing money because you don’t want to make the same mistakes again.
When you finally get round from the shock of your recent losses and want to start investing again …you may become stuck in analysis paralysis that you can’t even make a money investing decision.
The result is you may now begin to believe that your parents and friends may be right after all that investing is risky
This is far from the truth. Because on the flipside, there are many individuals who have struck out investing and are now living a life of financial independence.
What you need is to have the right attitude to overcome the fear of investing.
How do you overcome your fears?
The way to overcome fear of investing money is to identify your fear and deal with the cause.
Let me explain how you can overcome your fears with an investing scenario
Lets say, for example, you are afraid to invest in a residential property deal because you may lose money when you buy the property.
The question you need to ask is: why are you afraid you may lose money investingin the property? By asking yourself this question, you are likely to come up with a number of reasons.
Here are some the possible answers you may come up with:
You may buy in the wrong location
You may not find a good tenant
You may have to deal with fixing broken toilets
You may be investing at the wrong time
The economic recession may mean many people cannot afford to rent your property
In order to allay your fear, you must look at these answers and substantiate them with facts about the property you are buying.
The result of your fact-finding may be that they are true, or they are just opinions.
What is important with doing this exercise is that you’ll gain confidence to make your investing decision to buy the property.
As a result, you’ll not be afraid to invest in the deal if you need to do so. And even if you back out from investing in the property you’ll not regret your decision
By facing your fear and having the courage, to overcome fear, you can become a better investor.
Why? Because most of the time our fears are not valid . Fear stems from opinions and beliefs that are not necessarily true.
The bottom line: to overcome fear of investing you must confront it and act in spite of your fear.