How I Finally Got Over My Fear of Investing

Melanie Lockert

For years, I made excuses for why I didn’t invest: For starters, I didn’t have much money to spare, thanks to my $30,000 nonprofit salary. And my employer never offered a 403(b) match, so I told myself it wasn’t worth contributing anything at all. (The 403(b) is the nonprofit version of the employer-sponsored 401(k) retirement plan.)

I also thought any money I did have was much safer in savings. Coming of age during the Great Recession, I had a natural distrust of the stock market. I’d seen how the value of my parents’ and other Americans’ portfolios plunged during the recession, and I didn’t want the same to happen to me. (Of course, their portfolios rebounded as the stock market did after the recession, and have continued to grow since, but I was out on my own by that point.)

But perhaps the biggest reason I didn’t invest is because I’d been laser-focused on my debt. After earning two degrees, I had $81,000 of student loans to repay. The day I calculated how much I was forking over in interest ($300+ per month!) was when I got serious about wiping it out—funneling almost all of my excess money toward the goal. Within five years of earning my Master’s, I was debt-free, and ready for my next challenge.

I wanted to save more, but wasn’t impressed with the returns in my savings account. In a year, I’d made just a few bucks in interest—barely enough to cover a Starbucks drink.

How would I ever build wealth this way?

After learning more about personal finance through books and blogs, I finally realized that if I wanted to beat inflation and grow my money, I had to invest.

I was scared because I didn’t know anything about the market, so I started learning everything I could: I looked up terms I’d heard, but didn’t fully understand, like index funds, exchange-traded funds (ETFs), stocks and bonds.

One thing I learned along the way is that you don’t need a fancy or technical investing strategy—the most important thing is to get started. At 31, I knew I had a lot of catching up to do, especially if I wanted to reach a big milestone, like banking $1 million by retirement.

So I took the plunge.

I started by opening a SEP IRA, a tax-advantaged retirement vehicle for self-employed people like me. (In 2014, I left the nonprofit world for full-time freelance writing.) Now that I’m making more than triple what I used to make, I can afford to contribute at least $500 per month, though it’s been as high as $3,000. (It depends on my monthly income, which fluctuates.) My strategy is to have the same zeal for growing my investments as I once had for paying off debt.

I also decided to invest in diverse and low-cost index funds. Hey, if they’re good enough for Warren Buffett, they’re good enough for me. Though I’ve only been investing for a year and a half, I’ve already seen big gains. (Thanks, bull market.)

Of course, I also know the market can, and probably will, go down again at some point. So I’m committed to not obsessing over daily, even weekly, movements and have adopted a long-term mindset that allows me to invest without being consumed by fear: I only check my balance once a month, and consume just enough news to know what’s going on—but not enough to get riled up or consider panic-selling. As I watch my balance grow over time, I know it’ll be worth it.

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