Everyone should have at least a small presence in the stock market. However, I understand most people have a paralyzing fear of losing money.
Thus, when it comes to investing in the stock market, a couple of paranoias are at play. First is the fear of losing money, and the second is the lack of education in the markets.
Hopefully, if you can work on these fears individually, you can slowly begin to understand the tremendous upside potential of investing in the stock market. Let’s begin.
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Fear of losing money. We all work hard for our money—most of us exchange time for this precious resource. No one wants to flush money down the toilet. However, we do just that when we don’t make our money work for us.
The first part of understanding our relationship with money is reading a book. If you can comprehend where your money fears originate, you’ll have a better chance of overcoming them.
“Know Yourself, Know Your Money” takes us on a journey back to our childhood. It helps us see how our parents felt about money and how money affected us as a child.
“Effortless Money” is more of an emotional roller coaster ride of the feeling of money. You have to treat money a certain way before it treats you back. Also, don’t reject potentially lucrative situations because of fear of “looking greedy” to others.
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“Think & Grow Rich” is one of the original books on money and visualizing your future wealth. If you can’t envision a prosperous future, you can’t travel a path towards it. Simply, you are a millionaire long before you have $1 million in the bank.
“The Millionaire Fastlane” gives us the tools to build a wealth generator. The most important concept about the stock market is that it is not there to make you rich. You should make your money outside of the stock market via a wealth generator, then invest that “funny money” into the stock market.
Building a wealth generator. If you can truly grasp the idea of a wealth generator, you will never fear the stock market. The stock market is not a wealth generator.
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Right now, I have over $200,000 in the stock market. The markets are in turmoil because the Federal Reserve is raising interest rates, and most people are panicking. I am buying more stocks at excellent yields than ever. It’s a good time to be an investor.
I am calm because my wealth generator is as far away from the stock market as possible. My wife and I rent rooms for $1,700/month, plus we have another $400 from other rental income. Add about $100 from a blog and books, and we are earning $2,200/month passive outside the stock market.
No matter what happens in the stock markets, I have my wealth generators building me a fortune every day. I never need to invest in the stock market again, and I will be fine.
I use the stock market to accumulate “more” wealth by investing in dividends. However, I can use my wealth generator to buy different assets such as rental cars, Pokemon cards, or wine. My wealth generator allows me to invest in more assets—forever.
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Lack of education in the markets. Most people in life invest for capital gains. This means that they buy something with the sole intent of selling it to someone else at a higher price.
Investing for capital gains is an emotional roller coaster because you never know when to get off the ride. When is the best time to sell? Is the market going to crash?
Sophisticated investors buy assets to produce income—they invest for cash flow. You won’t fear the roller coaster if you can use the stock market to increase your cash flow.
Without education about the markets, you’ll hear people exclaim about doubling or tripling their money with Tesla, Amazon, and Zoom. You won’t hear people talking about the 3% dividends they earn from McDonald’s.
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However, when the markets crash, you won’t hear the capital gains people. The cash flow investors keep buying income-producing assets at better prices.
“Rich Dad’s Guide to Investing” gives us the basics of cash flow and investing inside and outside the markets. It is probably the book I reference the most, beyond “Rich Dad Poor Dad.”
How to get started. I recommend dipping your toe into the market before spending a lot of time reading for comprehension. I was in the markets for over a year before I began reading books on the mindset of an investor.
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I like to look back at my time before reading as an adventure. I didn’t have much money in the markets, but I learned a lot from ignorance. As I read books, I better understood because of my past experiences.
There has never been a better time to get into the markets because the barrier to entry is so low. You can do everything from your phone with no brokerage fees.
I would start with Cash App because you can have your dividends come directly to your debit card. There is no feeling like waking up to have more “free” money in your account.
I would love to say it gets old, but receiving $20, $40, or $80 just for waking up is life-changing, and everyone should experience this joy.
I just finished an article on building your first $500/month dividend portfolio. Yes, it may take a while for you to build up to that level of income, but you’ll enjoy the person you become to get there.
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Conclusion. In the end, life is about the journey, not the destination. Investing in the stock market will change your life because you’ll want to earn more to invest more.
That’s why I always say to learn to invest while paying off debt. Once you see the positive effects of compounding, it becomes like a drug.
You’ll want to downsize your car, start a business, and write books, all so you can earn more money to invest. That is the life-changing part of becoming an investor—obtaining the eyes of an investor.
You will see passive income opportunities everywhere—vending machines, arcades, billboards, and want to buy them. Eventually, you will. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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