This is a guest post from Kayla Sloan on behalf of Listen Money Matters, one of my favorite personal finance sites.
No one wants to invest their money and then lose it all. But you don’t have to let an irrational fear of investing prevent you from having a more secure future. In the past, some people have thought of investors as risk takers or even compared them to gamblers. But there are actually 5 reasons investing isn’t as scary as it used to be.
1. It is Easier to Educate Yourself
The past three or four decades have brought with them advances in technology never seen before. The rise of the computer age has literally put an unimaginable amount of information right in the palm of your hands. Smartphones, tablets, and other electronic devices make it easy to educate yourself about investing dos and don’ts. If the idea of investing has left you uncomfortable or even fearful, start by reading up about it first. It is risk free and you may learn what you need to help you get started.
2. More Investment Choices
If you have concerns about tying up your money by investing, there are lots of investment choices. One way to solve this problem is through diversification. Put a portion of your money into shorter term investments such as a CD, and other funds into investments that provider a higher return. There are plenty of investment options to choose from, such as real estate, stocks and bonds.
In addition, there are different ways to invest in each. For example, you could buy single home properties and become a landlord or multi-family units such as an apartment building. Or, you could buy a fixer upper and flip it for a profit.
In the past, if your income was limited, your choices might have stopped there. But now you could also easily invest in an REIT, or Real Estate Investment Trust, through the internet. There are lots of choices now, making investing easier, more commonplace and less fearful than ever.
3. Easier to Invest
Investing is no longer as complicated as it used to be so you certainly don’t have to be an expert. Nor do you have to hire an investment advisor or investment firm in order to put some of your money into investments. You could use a robo-advisor to help you get started investing and take some of the guesswork out of it. There are more than one to choose from, allowing you the option to choose one that works best for you.
4. Invest at Any Age
Some people don’t feel like they are financially ready to invest until they have more money or are older. However, you can invest even if you are approaching middle age. Obviously investing at any age still carries some risk, but you can reduce risk through diversification and your investment choices.
In the past it was harder to invest as a young person if your income was limited. With the choices available today you can invest with very little money and begin building wealth for the future. Furthermore, starting young with investing gives you the advantage of more time to make up for any losses and take advantage of compound interest.
5. You Can Start Small
Does investing a huge sum of money and losing it all scare you? If so, start small. Many people think you have to have huge sums of money in order to start investing. The truth is that you can start with very little. Robo-advisors can help because many of them have low fees and low start-up requirements. Or you could even try micro-investments with an app like Acorns.
Everyone wants a more secure future. Don’t let the fear of investing prevent you from realizing the 5 reasons investing isn’t as scary as it used to be.
Do you feel like investing isn’t as scary as it used to be?
Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.