Wealth by Design

58: How To Move Forward Despite Your Fear

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Description

In this week's episode of Worth It, we're talking all about fears. Fear is a normal (and necessary) human emotion, but it can often stop us from doing what we want in life. That also applies to investing and growing our wealth. Fear surrounding money is so common that it's a major part of our work as CERTIFIED FINANCIAL PLANNER™ professionals.

That's why we're breaking down some of the most common fears when it comes to money… and how you can move forward despite your fear.

Here's what you'll learn

11:43 The 3 types of fear (and how they play into your finances)

13:20 How to demystify the stock market

14:54 Common fears about investing  

16:33 The truth about logic and emotion

19:46 Actionable ways to face your fear head on

20:07 How to be a superhuman like Warren Buffett

24:06 The power in picking one investment strategy

24:30 How to weather ups and downs in your investments

What are the 3 types of fear?

As we discuss in depth in the episode, the 3 types of fear are:

We've all felt these kinds of fears; it's just part of being human. In our financial lives, though, this fear can manifest in a number of ways, including never starting your investment journey, losing money in stocks, and reacting without the long-term in mind. In the episode, we give a few more examples and talk about the biggest fear — investing in the stock market. P.S. Make sure to check out the episode to hear more about how to use our free resource, Stock Market 101.

Are we logical creatures… or emotional ones?

Many people assume that we are logical most of the time, with occasional moments of emotional or irrational behavior. But the truth is, we are much more emotional creatures than we think we are. We react when we're happy, sad, scared and — even when we believe we're acting from a place of logic — science finds that our emotional centers are actually the ones driving the boat.

That's why we think it's so important to discuss fear and how to work around it.

3 actionable ways to face your fears

In this episode, we help you by sharing 3 of our favorite tips for overcoming fear when it comes to your finances:

  1. Be superhuman. Think Warren Buffett; someone who believes in doing the opposite of what others are doing when the market changes. Buffett doesn't give into the fear, and he doesn't get greedy when the markets are up. He monitors the situation and acts from a place of logic, not fear. Of course, that's easier said than done.
  2. Set a discipline. When it comes to NOT letting fear rule the roost, you'll need to make sure fear doesn't get a chance to take hold. A discipline helps you not react in fear, like avoiding watch the news all the time or only checking your accounts once every 2 months. Having a savings discipline is also important.
  3. Work with an advisor. According to a Vanguard study, advisors add about 3% to your overall investments each year, compared to going it alone. Having someone in your corner who understands the financial planning world — and can talk you off a ledge when things get rough — is invaluable.

If you want to hear about how we've personally been affected by fear and how we help clients with their fears, tune into this episode. You'll also get more in-depth insights on how to "hack" your fears and make them work for you.

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