Here’s something I never thought I’d admit publicly on a blog: I’m a virgin.
I’ve gotten pretty far (maybe third base), but I’ve never gone all the way. I’ve been close – really close – but I couldn’t get up the courage to make the first move. It just all seemed too risky. Too many unknowns, too many ways to get hurt.
But this year feels different. I’m ready.
It’s time I finally lost my investing virginity.
I’m not completely inexperienced, but I’m scarred from my first time.
Okay, so technically I’m not a complete virgin. I’ve had a few flings in the investing space:
- My slow-n-steady retirement savings: Since I entered the workforce a few years ago, I’ve contributed a good amount toward my retirement (I’ve got both a Roth IRA and an IRA). As a young professional in my twenties, I’m pretty proud of where I’m at and a big believer that saving in a 401(k) is an easy way to get introduced to investing. But I wouldn’t consider that really losing my investing V-card. It’s the equivalent of “third base,” and I want to take the plunge into investing outside of my retirement.
- My terrible experience buying an individual stock right before the market crash: Oof. Talk about a terrible one-night stand. I decided the first time I would buy stock in a company would be when prices were dirt cheap – and that happened to be right before the 2008 market crash. I took $1,000 out of savings and put it into my favorite bank that was selling really low: Washington Mutual. Fast forward four weeks and Washington Mutual no longer exists, I’m out $1,000 and I have made a bow never again to dabble in the stock market until I knew what I was doing. (You can read more about my terrible $1,000 mistake here.)
So I’ve been hurt. And yes, I’ve dipped my toe into the investment water with my retirement savings. I suppose all this makes me a born again investing virgin. 🙂
But regardless of my past, I want to go all the way this time.
I just need to stop being so damn scared.
Despite having plenty of information at my fingertips, I’m still scared that I don’t know enough. The crazy part? I help people understand personal finance for a living… and I haven’t gotten up the guts to do it myself. Heck, I even posted last year that I was ready to make a move – and I still didn’t do anything about it!
But I can’t delay this anymore, especially now that I’m debt free. Paying down my student loans meant I was boosting my net worth with every monthly payment. I was reducing my debt, which meant less interest to pay in the long run. So now that I’ve crushed my student loan debt, I need to be just as aggressive in growing my net worth. And boosting my savings just isn’t cutting it.
Stop being scared of the worst case scenario
Just what exactly is stopping me? It took me awhile to peel back the layers of my investment fears and I realized that I had been imagining the worst case scenario: losing all my hard-earned money again because I made a bad choice.
So I decided to break down my fears and the worst case scenarios:
- What’s the worst that could happen if I started investing? I could lose some money. I could lose $1,000 again. That stunk when that happened last time. But I won’t be investing in individual stocks again. So maybe the worst case scenario won’t be that bad.
- What’s the worst that could happen if I did nothing? I could actually lose more money by not acting. Sure, I could still save money in a bank, but it wouldn’t be growing. I wouldn’t be putting my money to work for me. In fact, by not doing anything, I could lose out on tens of thousands of dollars. OUCH.
Your worst case investment scenario? You could lose tens of thousands of dollars…by never starting.
I may lose money initially. But I won’t gain a thing if I never start.
Okay, that’s it. And now I’m finally ready to start. I just need to take a big breathe and make the leap 🙂
How I Plan to Lose My Investing Virginity
Over the next few months, I’m going to walk through the step-by-step of how I’m going to lose my investing virginity: where I’m investing, how I’m setting up my accounts – an open kimono. In case you’re wondering, here are the options I’m considering:
- Invest in a Vanguard S&P 500 Index Fund: This is hands-down the most recommended investment product out there (and by most recommended, I mean by the blogs I read and my friends that are investing). It seems well-balanced with low fees. I’ll take a look at it in more details in later posts.
- Invest using Betterment: Betterment is an ultra-simple do-it-yourself investment tool with a sleek, easy-to-understand interface. It takes a few minutes to get up and running and seems like another great option for beginning investors. I’ll investigate further in a later post.
Ready to lose your investing virginity, too? Stay tuned for more posts to come. Now that I have a plan, I’m hoping to have lost my investment V-card by next month. Wish me luck 🙂
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