'Help! I feel paralyzed — I know I should invest, but how?'


Welcome to Asking for a Friend, Grow's new money advice column. Got a question for one of our money experts? Email us at

Dear Asking for a Friend:

I've been working in my career for the last five years and regret not making better financial decisions earlier in life. Like taking advantage of my employer's 401(k) match and opening a Roth IRA. I'm lucky to say that I've paid off my debt, so I have that going for me!

It seems everywhere I read I am being guilt-tripped for not "maximizing" my cash in savings, investments, and all these other things I know I "should" be doing with my cash. But I feel paralyzed!

I'm constantly worried I'll do something wrong. Currently, I have around $4,000 in cash lying around in a savings account and I heard that's not the best way to "grow" my money if it's just sitting there. What should I invest in if I wanted to use this extra cash? There's so much out there. How does one trust what they are investing in?

— Paralyzed

Dear Paralyzed,

You trust investing by getting smart about money. Ninety-nine percent of people who say "investing feels like gambling" have never spent one weekend reading a good book about money.

People worry about losing money in some investing catastrophe but fail to realize they're losing money every single day by not investing. That's because your money that's sitting in savings is losing value every day due to inflation.

In reality, the way to see serious financial growth is to invest. When your friends and crazy Uncle Joe tell you that investing is "risky" and you could lose all your money, and you get so scared you feel stuck, that's an instinctive, emotional reaction, not a well-reasoned, logical response.

Investing is not about "timing" the market and picking stocks. Real investing is about diversifying your portfolio by making sure you have a mix of stocks and bonds, automating it, and moving on.

People worry about losing money in some investing catastrophe but fail to realize they're losing money every single day by not investing.
Ramit Sethi
author of 'I Will Teach You To Be Rich'

Honestly, if you're nervous about investing and just starting out, your biggest danger isn't having a portfolio that's too risky. It's being lazy or overwhelmed and not doing any investing at all. Luckily, the simplest way to get started is also a great way: Look into target-date funds.

Just know the date that you are going to retire, and the computer will roughly know when you're going to retire (let's say that's 65 years old) — and it'll automatically spend your money around various assets to help you invest in your retirement by that specific date. Think of it like a pie chart: Some of the invested money goes into stocks and equities, some in bonds, and some sits in cash.

A target date fund is simple, it's often low-fee, and you don't need to think about it, so it's one of the best ways to get started and begin your long-term investment plan.


Ramit Sethi is the author of the New York Times bestseller "I Will Teach You To Be Rich" and writes about personal finance, psychology, and entrepreneurship for more than 1 million readers on his website, I Will Teach You To Be Rich.

More from Grow: