5 Ways to Conquer Your Investing Fears

It's an unfortunate truth that many of us — especially successful, professional types earning more than ever before — don't put our money to work by investing. Some people call this habit "Sit-It-Out Syndrome," and if you've got a sizeable pile of cash you'd rather sit on than grow, you might have it. So what's holding you back? Here are five common investing fears and how to conquer them.

"I'm Afraid I Can't Afford It"

There are a lot of stock-market stereotypes out there — think mansion-dwelling, The Wolf of Wall Street-era players — that say you better be a baller to even get a seat at the table. Not true in the least! If you have $1,000 to contribute to a savings account, you have $1,000 to invest. It's okay to start small. Even taking a pass on two of your favourite $5 specialty brews each week could leave you with over $500 a year to invest.

"I'm Afraid I'll Lose the Little Money I Do Have"

For many of us, it's natural to be risk-averse, and there's no shortage of studies suggesting women are even more risk-averse than men. Still, a bigger factor than gender could actually be age. Many experts believe Millennials are even more hesitant to take risks, perhaps because they came of age during the recession in the late 2000s. Still, there are definitely benefits to embracing youth as far as investing is concerned. If you've got a long road ahead, you have time to enjoy periods of growth and better weather downturns. If you're closer to retirement, of course, more conservative choices might make sense to help offer some protection from market volatility.

"I'm Afraid It's An Old Boys' Club"

Certainly the stock-market image of the cigar-smoking business elite has long been drilled into our collective subconscious. It's just not true anymore. Keep in mind that women controlled around a third of the $168 trillion of global private wealth in 2015, according to research from Boston Consulting Group. Millennials held around 10 per cent, a number that's expected to climb to 16 per cent in 2020, the consulting group says.

Meanwhile, women graduates outnumber men at many colleges and universities, and a growing number of women are out-earning their husbands. In Canada, women who bring in more money than their husbands jumped to nearly 30 per cent in 2008 from just 12 per cent in the mid-1970s, according to Statistics Canada. While the old model had women managing the household budget and men handling the investing, advisors and institutions are now seeing women's money-managing strategies as skills to be taken seriously. Books like Warren Buffett Invests Like a Girl and Why You Should Too speak to this. When the "Old Boys' Club" wants new insight on secrets to success, you know the club is crumbling. So go ahead ladies and gents, invite yourselves in already.

"I'm Afraid It's Too Complicated"

Let's look at an example. Ms. or Mr. Director, super successful, is sitting on $100,000 that's been hard-earned and saved, but believes investing that $100,000 will be far harder than earning it. Not only is there a fear of not knowing what to do, but there's a fear of even admitting feeling that way. The result? Say nothing, do nothing, get nowhere.

Anyone making you feel inadequate or depleting your confidence about your financial situation should be replaced with someone willing to hear you out and help you learn. Surely opening your first chequing account felt strange once, but you learned then, and you can now. If you're looking to start out slowly, a practice account  can allow you to make trades and experiment with different investment strategies using risk-free practice money. Think of it as your online investing test drive.

“I’m Afraid It’s Not the Right Time for Me”

Let’s face it, there are always going to be competing priorities for your money: bills, education, paying down a mortgage, car payments, vacations…and so many more. Is there ever a right time to start investing? Rather than thinking about a right time (sounds daunting!), think of the benefits of just getting started in the first place. It’s the most important part of investing, after all. Big or small, just starting somewhere means you’re on your way to building a nest egg. It also means benefiting from the power of compound interest – the snowball effect of earning interest on interest on interest. Now that’s putting your money to work for you!