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5 Investment Moves That Prove You're Finally a Grown-Up

Dan Rafter — Tue, 07 Nov 2017 09:01:07 +0000

You know that investing is a smart move: It's a way to grow your wealth over time and boost the odds that you'll have enough money to live the happiest possible retirement. But how do you know when you're investing your money like a grown-up and not like a kid?

It's about taking reasonable risks, doing your research, and changing your investment mix when it makes sense. In other words, you know you're investing like a grown-up when you treat investing like what it is: work.

These are the five investment moves that prove you're finally a grown-up.

1. You're not afraid to invest in stocks

It's true that stocks come with more risk. But investing in stocks comes with the potential for much higher rewards, too. If you ignore stocks and only invest in safe assets such as bonds, you run the risk of losing significant profits over time.

According to TIME Money, since 1926, portfolios made up mostly of stocks have never had losses that last 20 years or more. These same portfolios reported average gains of more than 10.8 percent annually, while portfolios made up of bonds averaged returns of just 4 percent a year.

If you're investing like a grown-up, you won't run away from the high-reward potential of stocks. Instead, you'll make sure to include stocks as part of your overall investment portfolio. (See also: 7 Reasons to Invest in Stocks Past Age 50)

2. You do your research

Your friend comes to you with a hot tip, claiming that you absolutely must invest in this new company. They tell you you'll be getting in on the ground floor of something big. An immature investor might jump at that opportunity, but a grown-up will do the research before acting on the tip.

This means reading company reports and listening to conference calls. It means studying the product or service this "hot" company is offering. It means seeking out the advice of true financial experts. And, yes, all of that takes time and work. But to invest like a grown-up means you're willing to put in that effort before investing your dollars. (See also: 7 Dumb Stock Picking Mistakes Even Smart Investors Make)

3. You don't sell too quickly

It's tempting to sell a stock when it's either soaring in value or falling. But reacting too quickly to changes in value, whether positive or negative, is the sign of an immature investor. The grown-up investor realizes that investing sometimes requires patience.

Consider a stock that rises in value after you buy it. Sure, if you sell it, you'll make a quick profit. But what if you held onto the stock longer? If the stock is a solid one, it might continue to increase in value over time. If you sell too early, you might miss out on plenty of future profit.

You also don't want to hold onto a losing investment for too long, but it's still possible to sell too quickly. If you're patient, and if you've done your research on the company before investing, it might make sense to hold onto the stock until its value begins to rebound. If you sell as soon as the stock loses value, you're certain to take a loss. (See also: The Secret to Successful Investing Is Trusting the Process)

4. You're not hunting for bargains

You don't want to overpay for stocks, but sometimes investing in a quality company takes a significant amount of money. Grown-up investors know that it's better to invest in a strong company while paying a bit more than it is to get a bargain price for a company that won't perform as well.

The truth is, if you want to invest in top companies, you'll have to spend more to do so. Don't let your quest for bargain prices trick you into investing in underwhelming companies.

5. You don't cash out your 401(k) when you change jobs

When you change jobs, you'll usually have to figure out what to do with the 401(k) plan in which you've been investing. The immature move? Cashing it out for a quick buck. The grown-up move? Rolling that 401(k) over into an IRA.

If you cash out your 401(k), you'll lose a good portion of the money you saved because of taxes and, depending on your age, penalties for withdrawing the cash too early.

By rolling over the funds, you won't suffer any penalties or tax hits, and your money will continue to grow over the years. (See also: The Step-by-Step Guide to Rolling Over Your 401(k))

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Invest If You're Worried About a Stock Market Crash

Carrie Kirby — Thu, 26 Oct 2017 08:30:09 +0000

It seems that every time I turn on a financial report, someone's warning that the bull market we've been enjoying for more than eight years is about to come crashing down. Some analysts point to signs such as the rising price of gold, decreased trading volume, and muted reaction to strong earnings reports as harbingers of a crash. Others just point to the calendar: Since 1926, the average bull market has lasted nine years, and ours by most measures is about eight and a half years old. (See also: Are We Headed Toward a Bull or Bear Market?)

While there is some truth to the notion that no party lasts forever, there is also no definitive way to predict when we might see a correction (a 10 percent decline) or a crash (a 20 percent or greater drop). So before we get into the nuts and bolts of market disaster preparedness, understand this: No matter how nervous people feel, a correction may not happen this year or even next. This is really important to know, because if you make drastic changes to your portfolio to protect it from stock declines, you may well miss out on months or even years of growth that you can never get back.

Does that mean you should plunge your head into the sand and do nothing, no matter how worried you feel about a possible market crash? No. There are steps you can take that would both set your mind at ease and help prepare your finances for whatever the market brings. (See also: Want Your Investments to Do Better? Stop Watching the News)

Take stock

Harness the energy of your market jitters to perform some portfolio hygiene that you should have been doing all along. If you've been carrying too much risk without even realizing it, now's the time to adjust that.

"Figure out what your allocation is between equities (stocks) and fixed income (bonds and cash)," recommends investment adviser Bob Goldman. "A lot of people will find they had a higher concentration of equities than they thought they did, because equities, especially U.S. equities, have done so well in the past few years."

How do you know if you're carrying the right amount of risk? It's all about your goals and your timeline. Riskier portfolios generally have a higher percentage of stocks and a lower percentage of bonds and cash. If you need your money to grow to meet your goals, you'll have to take on some risk to get there. If you're not sure how much risk you should take on, consider investing in a target date index fund, where you input when you need the money, and the fund manager does the rest.

If your portfolio is considered appropriate for your timeline but you just can't sleep at night, it's OK to dial back the risk to give yourself peace of mind — as long as you can afford to. Use an online investment calculator, consult portfolio allocation models, or talk to an adviser to figure out if you could reduce your stock allocation by 10 percent and still have enough money to retire when you want to. If you'll still have enough, then go ahead. (See also: 5 Essentials for Building a Profitable Portfolio)

Keep investing

If you have been contributing money from each paycheck to your 401(k) or buying stocks in a taxable account, don't stop just because you're worried the market may be peaking. Remember that if a bear market happens, it won't last forever. In fact, bear markets are almost always shorter than bull markets, with an average decline and recovery of just three years.

You may be tempted to slow down your investment schedule, dividing your money into periodic investments instead of buying stocks and bonds in one lump sum. This would save you some losses if a crash really does come during the year, but this approach, known as dollar cost averaging, usually doesn't pay off since timing the markets is typically considered futile.

So what if you buy today, and the market crashes tomorrow? By one expert calculation, in this worst case scenario, it takes an average three years to get the money back. If you are investing for the next 10 or 20 or 30 years, rest assured that even if the absolute worst happens, it will almost certainly work out in the long run.

Don't invest anything you'll need within five years

If a downturn happens, you don't want to be forced to sell and take a loss. This five-year rule is always a good one to follow, but if you believe that a downturn is coming, it's a great time to double check to make sure you have what you need for near-term spending in cash, CDs, or a money market fund.

What you "need" means different things to different people based on their situation. If you were planning to send your kid to college in two years, it means the first three years' tuition should not be in the market at this point. If practical, Goldman suggests keeping a two-year emergency fund, covering all your minimum expenses for that period. That way if a downturn snowballs into a recession and you lose your job, you'll still be OK. When making the calculation of how much you need, don't forget that you probably won't owe taxes or be making retirement contributions if your income goes away.

Consider saving up for bargain shopping

When stock prices crashed in 2007 and 2008, I had no money to invest. Warren Buffett did, though. One of Buffett's financial crisis investments was putting $5 billion into Goldman Sachs, a stake that increased in value by 62 percent within five years.

Probably no one reading this will ever be in the position to take advantage of a bear market to that extent. But it's not a terrible idea for investors to put aside a cache of cash earmarked for buying stocks in a downturn. Just remember not to short circuit your entire investing plan by putting all your money into that basket. As Buffett said in his most recent investor letter, investment gains and downturns will be "totally random as to timing." You don't want to put off investing for years waiting for a downturn that doesn't materialize.

Don't forget that five-year rule here, especially, because if you buy stocks that have just declined, you have no way of knowing if the price you pay is the bottom. You may be "catching a falling knife," meaning that the stock you buy may continue to plummet after you purchase it. But if what you bought is a diverse index fund, don't feel too bad if it keeps going down after you purchase. After all, within a few years, you should be gaining again.

Beware of salespeople who prey on fear

Stockbrokers and other sellers of investment products may take advantage of jittery investors to push vehicles that promise to limit downside, such as annuities, insurance policies, or even that old supposedly safe haven, gold.

Analyze all investment opportunities with a cool head. Find out what the seller has to gain by getting you to sign on. When in doubt, stick to investments that you understand well, or consult a fee-only planner with no stake in where you put your money.

"The end of bull markets, in my experience, are often signaled by the invention of esoteric and exotic investments that sound good but are really a mix of ordinary stocks and bonds mixed with leverage to give you 'enhanced' and 'select' returns," warned Mitch Goldberg, president of ClientFirst Strategy, in a CNBC commentary. "If you've recently put money, or been advised to put money, into an investment that is very narrow, or you simply don't understand, get out."

Avoid debt and leverage

One of the causes of the 1929 stock market crash was excessive leverage, which means that lots of investors were playing the market with borrowed money. Typically, brokerages will sell stocks to some investors "on margin," which means that the investment bank lends you the money to buy the stock, holding the stock as collateral. This is risky, because if the market price of your investment declines sharply, the bank can call in your loan, forcing you to sell at a loss.

Buying stock on margin can be considered reckless in the best of times. If you fear a correction is coming, getting rid of leverage is an obvious way to make your portfolio more conservative.

If you are able to pay down debt in other areas, such as car loans and credit card debt, this can also help strengthen your financial standing to help you weather any bad times that may lie ahead.

The other nice thing about paying down debt in an uncertain time is that it's a safe place to put your money. If you have a 4 percent interest rate on a loan, paying down that loan is like getting a guaranteed 4 percent return on your money. That's not a huge return, but if you are scared that you'll lose that money in the market, reducing your debt is a safer bet.

Keep it all in perspective

We may lose a lot of sleep worrying about a stock market crash without really knowing how such an event would affect us. Here's a little exercise that might help ease your mind: Look at your current portfolio, then cut 10 percent or 20 percent, or even 30 percent from the total. Then use an online investment calculator to figure out what the typical return would be on that money, if it was a new investment, over the course of your investment timeline. Can you live with the results?

Then remember that even if the market does drop 10 percent or 20 percent or even 30 percent, chances are the effect on your personal portfolio won't be as extreme.

"You have to remember, if you're diversified, and the U.S. stock market drops 30 percent, that doesn't mean everything else will drop," Goldman says. That's why you have a diversified portfolio containing international stocks, bonds, and other investments.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Millennial Investors Can Get Past the Great Recession

Tim Lemke — Mon, 25 Sep 2017 16:26:40 +0000

For many millennials, jumping head first into investing is not easy. Many of them have jarring memories of rough stretches in the market — most notably, the crash in 2007–2008 that led to the Great Recession. One recent survey from Legg Mason Global revealed that 82 percent of millennials say their investment decisions are influenced by that financial crisis and ensuing economic downturn.

This wariness, however, could be harmful to millennials' long-term financial prospects. If they are not investing now, they may not be accumulating enough wealth for a comfortable retirement.

How can millennials get over their fear and begin putting their cash back into stocks and other investments?

Look at the market's historical performance

It's impossible to ignore the 35 percent plunge in stock market prices that took place in 2008. No question, a lot of people lost a lot of money that year. But do you know what happened in 2009? The market rose by more than 25 percent. And it went up the next year. And the year after that. In fact, the S&P 500 has seen positive gains every single year since the market crash, and 2017 promises to be the ninth straight year of positive returns.

Moreover, the market rose for the five years before the 2008 crash. That's positive returns in 14 out of the last 15 years. With consistent returns like that, it's silly to dwell on a single rotten year, especially when you have a long way to go before retirement.

Start with what you know

You may be terrified about putting your money in stocks after enduring the Great Recession. So consider starting small, with something you're familiar with. Buy some stock in a strong company you know and like. If you eat a lot at McDonald's, buy some shares. Do you subscribe to Netflix? Buy shares of the company. Do you shop at Amazon? Go ahead, buy a few shares. This will get you started, and if you see these investments go up in value, you may overcome your fear of investing. When that happens, begin placing more of your savings into a wider array of investments and build a full portfolio.

Talk to an unbiased financial adviser

Sometimes you just need someone to talk to. Deep down, you know you should probably be investing your money and saving aggressively for retirement, but you aren't sure where to start. Perhaps you don't feel equipped with enough information to feel at ease.

Most certified financial planners will be happy to sit down and have a conversation with you. They can help you get started investing in a way that will be within your risk tolerance. They'll explain how the investments work and point to the average annual returns. They can tell you about strategies that can help you grow your money while protecting it against any future market crashes. Any adviser worth their salt is not going to talk down to you; in fact, if they want your business, they will do whatever they can to make you feel comfortable before you invest a dime.

Chat with those who have endured a crash — and rebounded

The Great Recession wasn't the first time that the markets took a tumble. They fell precipitously after the tech bubble burst, and after the attacks of September 11. The markets fell more than 20 percent in a single day in October of 1987. Just about every decade has had at least one year that was bad for investors.

Those who lived through those crashes, however, will tell you that things rebounded every time, and in many cases they were able to take advantage of depressed prices to realize larger gains in the end. For sure, there are people who chose to shy away from investing altogether after enduring a bad loss. But most people who lived through these downturns will offer the advice of "This too shall pass."

Think about tomorrow

The Great Recession was painful, but imagine the pain of not having enough money to retire. That's what could happen if you shy away from investing. If you are afraid of investing because of your awareness of what happened a decade ago, it's time to flip that fear toward the future. Think for a second about what it will be like to fall short of your retirement goals. Consider what it means to be working well past what should be your retirement age. Scary, right? (See also: Are You Making the Biggest Investment Risk of All?)

Take a lower risk approach

Most millennials are still decades away from retirement, so it makes sense to invest in mostly stocks, which usually offer high returns in exchange for some risk. But if you're risk tolerance is low, it's still possible to generate solid returns with a more conservative approach. Feel free to mix in some bonds or dividend stocks that have performed well over time. Look at industry sectors like consumer goods that have shown solid growth over the years with relatively low volatility. Be aware that you will sacrifice some return for taking this lower-risk approach, but you can still build a sizable retirement fund if you give it time to grow.

Save as much as you can

If you are skittish about investing, that should not be an excuse to avoid saving money at all. You may not feel comfortable putting your money in the markets, but it's imperative that you at least spend less money than you earn and avoid the crippling effects of debt.

Ideally, you will want to invest a good portion of your savings, but if you can't get over your fear of the markets, make sure you're putting aside cash for emergencies and large expenses. Perhaps after building a large enough cash reserve, you'll become frustrated with the measly returns from bank interest and look to invest more aggressively.

Recognize free money when you see it

Have you even bothered to sign up for your employer's 401(k) plan? If it's something you've avoided because you don't want to invest, recognize that you may be turning down free cash. Most employers match their workers' contributions into a plan up to a certain amount, and may even throw in additional direct contributions. This is free money that you can invest along with your own, and is designed to replace the defined benefit plans (pensions) that employers used to offer. In the past, no reasonable worker would turn down a pension payment, so it's just as important to accept matching contributions to 401(k) plans. (See also: 10 Signs You Aren't Saving Enough for Retirement)

Add to your knowledge and skills

Outside of financial market strategies, there are other ways you can make yourself less vulnerable to a financial crash. You may not be able to control the economy or the performance of the stock market, but you can control how attractive you might be to employers. Your education shouldn't end when you leave college. Don't be afraid to continue learning, both in the classroom and on the job.

Take on new challenges and learn new skills. This might mean learning to code or becoming an expert in Excel or web design. Or, maybe some advanced writing or graphic design skills will help you. Bolstering your resume in this way will improve your chances of landing and keeping a job, and may lead to a higher income. If there is another market crash and recession, you'll feel confident that you can weather the storm.

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Your Loss Aversion Is Costing You More Than Your FOMO

Anum Yoon — Wed, 05 Apr 2017 08:00:10 +0000

Imagine the following scenario:

You can either pocket a guaranteed $500, or flip a coin. If you get heads, you get $1,000. If you get tails, you get nothing.

Now, imagine this second scenario:

You are given $1,000 — woohoo! But you have to decide whether you'll lose $500 of it outright, or flip a coin. If you get heads, you lose nothing. If you get tails, you lose $750.

Chances are, in scenario one, you chose to pocket the money, whereas in scenario two, you chose to flip the coin.

How did you know that!?

That's because we feel the pain of losing money so much more than we feel the joy of earning a reward. This trend is called "loss aversion," but, in everyday terms, you might find it a bit familiar to FOMO: the fear of missing out.

FOMO tends to describe the pain of seeing your friends on social media doing fun things and achieving their goals while you're left out. In a way, loss aversion is similar because you're afraid to lose out, but the pain might be a bit deeper with money.

It might sound ludicrous that we hurt more when we lose money than we feel joy in earning it. But studies have shown we feel the heartbreak of a financial loss twice as strongly as we feel gaining the same amount of money. So, if you get a $500 bonus from your boss, you'll only be half as emotional as you would be losing that same amount on the stock market.

How might this affect me?

Loss aversion can be both good and bad. For starters, it might lead you to make "safe," low-risk investments. This turns out to be helpful for investments you have to make, such as your retirement fund. Sure, you could put your life savings into a high-risk scheme, potentially multiply it several times over, and retire in riches — but you might also lose it all. It's often better to choose something with a low rate of risk so you have a healthy sum of money to live off one day.

On the opposite side of the coin, loss aversion can cause you to make rash decisions regarding the stocks and investments you hold. For example, if you're an investor in oil-related stocks and have a meltdown every time oil prices drop, you might be inclined to sell off all your stocks and stop the loss as quickly as possible. While this may be a good decision in certain situations, it's always important to remember that what goes down will likely go up again, and holding onto your stock could mean you'll get it back later. (See also: Want Your Investments to Do Better? Stop Watching the News)

Now, that concerns a drop to the market overall. The other potential pitfall of loss aversion is to hold onto stocks that have been underperforming for way too long. Many investors will sell stocks that appear to be at the top of their game, only to find out later that they've continued to grow. Meanwhile, the stocks they're waiting to see flourish continue to underperform, and they lose money in the long run.

How can I avoid falling into this trap?

One of the best ways to make sure you don't feel the pain of loss — or loss aversion — is to diversify your portfolio. In other words, don't put all of your eggs in one basket: Invest in different industries, different types of stocks, and in both short- and long-term investments.

If you're going to make a "risky" investment, make sure you're ready for the challenge. Prepare yourself by building your confidence and learning more about what it means to invest in whatever you're considering. Come up with a fallback plan. You've heard it before, and it's worth repeating: risk equals reward. Yes, you might lose, and that'll hurt — but you might also gain big. If that's worth the leap, then it's time to get off the ground.

If all else fails, talk to a professional about your options. Yes, you might have to throw him or her a bit of money in order to receive financial advice. But having a professional tell you the best, most secure way to invest your money might help ease your mind — and increase your dividends — without breaking the bank or your heart along the way. (See also: The Surprising Truth of Investing: Mediocre Advice Is Best)

This article is from Anum Yoon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Make Public Speaking Less Terrifying

Kat Tretina — Wed, 22 Mar 2017 09:30:32 +0000

Your ability to speak in public can be critical as you climb the corporate ladder. Struggling with anxieties about speaking in public can affect how your peers and other professionals view you, as well as limit your career opportunities down the line.

Speaking with poise shows that you are confident, knowledgeable, and can handle pressure — all important qualities for a professional (especially a manager) to have. And handling questions after a speech, for example, shows how quickly you can think on your feet and how well you know the subject matter.

If you cannot present confidently, or maybe you even skip speaking opportunities altogether, you miss your chance to showcase your skills. That gives others the chance to shine instead. Your fear of public speaking may be putting others in line for promotions ahead of you.

Many careers consider presentation skills part of the basic job requirements. As you grow in your career, that becomes more common. Don't let this fear threaten to derail your professional life.

Improving your speaking abilities

For millions of people, public speaking is their number one fear. If you are one of them, there are ways you can conquer your fear. Below are four strategies you can use to help master speaking in front of others.

1. Books

If you struggle with anxiety and speaking in public, self-help books may offer some relief. Many people swear by Dale Carnegie's The Quick and Easy Way to Effective Speaking . This book has helpful strategies on how to become more confident as a presenter and techniques on overcoming nerves before a big presentation.

2. Study what works

If you don't know where to start, study what works well for others. Look for speakers who speak well; they can be people within your workplace or professional speakers who perform in front of thousands. By studying what makes them engaging, such as their body language, volume, and presentation style, you can adapt their best practices into your own speeches.

Watching popular TED talks on subjects that interest you can provide fantastic inspiration, too. There are a wide range of topics and speaker styles, so you're sure to find something you can learn from.

3. Toastmasters

Toastmasters is one of the most well-known professional workshops out there. By joining a Toastmasters' club, you can practice public speaking in a relaxed, safe environment. You'll get tips and constructive criticism from polished professionals and experts, helping you hone your skills and get more comfortable at the front of the room.

4. Virtual reality

I tried a range of techniques to overcome my fear, including joining Toastmasters and reading dozens of books, but the most effective technique for me was virtual reality. While there are a number of apps and platforms available now, one of the biggest and most popular is Speech Center for VR.

Speaking in front of a large group is difficult to prepare for; practicing in front of an empty room, while helpful in ensuring you know the material, doesn't ready you for presenting in front of dozens or — gulp — hundreds.

Speech Center for VR is an app that uses virtual reality to make it seem like you're speaking in front of hundreds of people. There are different scenarios to choose from and virtual coaches that provide feedback, such as on your movement, eye contact, or voice level.

While I felt ridiculous wearing the headset at first, I found it really helped me get more comfortable presenting to large groups. And it gave me good feedback on using the space available to me and modulating my speaking voice. Within a few sessions, I was still nervous, but I felt prepared and able to give a speech without getting sick.

Tips for making a great speech

When it comes to actually giving a speech, here are a few tips to help you through it.

1. Speak louder than you think is necessary

When people are nervous, they tend to speak quickly or softly. This can give you the appearance of timidity or unpreparedness. If you speak one level louder than you think is a normal presentation voice, you will naturally slow your speech and sound more authoritative and confident.

2. Breathe

If you tend to rush, force yourself to take a deep breath after each sentence. This will make your words sound more purposeful, while helping keep your nerves in check. And taking a moment to take a breath will also eliminate the need for filler sounds, such as "um."

3. Hold a prop

For some, one of the most challenging aspects of speaking is what to do with their hands. Having a prop, even something as simple as holding a pen, can make you feel more relaxed and natural.

4. Know the material inside and out

One of the biggest public speaking fears is forgetting what you need to say. To combat that, practice the material until you know it by heart. That's not to say you should memorize the whole thing, but you should know the key stats and progression of talking points.

5. Find a friendly face

Making eye contact can be challenging when you're nervous or intimidated. Identify two or three friendly faces in the crowd to look at during key moments of the speech. That can give the illusion of making natural eye contact, while giving you encouragement to keep going.

6. Keep it simple

When writing a speech, it can be easy to use elaborate, wordy prose. But that can make it difficult to present naturally. Instead, use simple terms and short sentences to make it more engaging and understandable.

This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Reasons Millennials Should Stop Being Afraid of the Stock Market

Mikey Rox — Thu, 08 Sep 2016 09:00:10 +0000

Are you a Millennial who's interested in investing? Then stop being afraid of the market. Sure, the Great Recession wiped out market fortunes during your early adulthood, but in the years since, it's roared back. Those who held steady during the market tumult made their money back — and then some. And those who were smart enough to invest when the market was at its bottom? Well let's just say we should all be a little jealous of their foresight (and earnings).

So, don't be a slave to your stock market fears. Here are seven reasons why you should be investing in equities, too.

1. You Have Options When Deciding to Invest

There are different investment options available that match your goals and time horizon. For instance, you can invest more conservatively if you're trying to save for a down payment on a house in a few years, versus investing for retirement 30 years down the road. And with increased diversification, you can maximize your investment returns while taking smaller risks.

"The more risk you take, the longer you should be willing to wait before it pays off, but you can match your investment objectives with your time horizon," says Ryan McGuiness, founder of the wealth management firm CTR Financial. "I invest my clients in a diverse portfolio of 12 different index funds to provide maximum diversification at the lowest cost, and match their risks to their goals, time horizon, and risk tolerance. You can try to learn what to do on your own or work with an adviser, but there are plenty of options out there."

2. Market Volatility Is Normal

Hands down, everyone's biggest fear in investing in the stock market is that it's going to crash and you'll lose your life savings. While that scenario can happen, a crash is not as likely as you think. In fact, it's uncommon. And even when markets crash, they inevitably come back. So, if you invest for the long term, this volatility should be much less of a concern.

Of course, Millennials are more on edge about this particular setback than other generations, because they may have experienced the financial crisis firsthand in the late 2000s with parents losing their jobs or — even worse — their homes due to the global meltdown. As a result, you probably equate the stock market with extremely high risk, but that isn't usually the case.

Lori Pinkowski, co-founder of the Pinkowski-Allen Financial Group, explains.

"A 2008-type crash occurs very infrequently; however, a 10% market correction happens on average once a year, so stock volatility is normal," she says. "Market volatility also creates opportunity to purchase good companies at a lower price. With an active management strategy, their investment portfolios shouldn't simply rise and fall with the market like they do with a buy and hold management style. It's important to raise cash and get defensive at times but then be ready to deploy that cash once risk levels improve."

3. Investing Has Never Been Less Expensive

You don't have to be rich to invest — all you need is a little bit of disposable income. Many online brokers offer low-cost or even free trades, a prospect that was unimaginable just a few years ago. You also don't have to go broke by hiring a financial adviser to navigate you through the process, which is recommended. While the cost prospect of the latter is a deterrent for some Millennials, investment adviser Jeremy Torgerson details an inexpensive — and automated — solution:

"While many investors still want the assistance of a human financial adviser to help them figure out what to invest in and when to hold their hand during market corrections, it's no longer necessary to use and pay for a human adviser," he explains. "The technology is incredible, and the robo-adviser is on duty, 24 hours a day. Or if you want a human adviser, the ability to shop for exactly the right one, in terms of service, expertise, and cost, has never been easier."

4. Investing Protects Your Money From Inflation

Think about this sobering fact for a second: The money you're earning and saving today will be worth less in the future if you keep it in a bank — guaranteed. The amount may not change, but over time, thanks to inflation, the value of your money will go down if it's left sitting in a bank account. As Pinkowski puts its, "Inflation is approximately 2% and your bank savings account generates less than inflation, which means you have actually negative real growth. If you want healthy growth above inflation over time, stocks are the best choice."

5. Relying on Yourself Is a Better Bet Than Relying on the Government

The simple reality of our current fiscal situation includes underfunded promises to Medicare, Medicaid, Social Security, and prescription drug benefits to the tune of $121 trillion and counting.

"Millennials will, in many ways, be 'stuck with the check' in later years for all the spending that's already happened, which will mean a later retirement age for Social Security, higher tax rates and inflation in the future, and, likely, reduced benefits from these entitlement programs," Torgerson says.

Considering this potential, you owe it to yourself to prepare for a government that's less able to provide for you in retirement. Of course you should be contributing to a 401K, and taking advantage of matching contributions from your employer if they offer it. But investing separately in the stock market also can fortify your ability to retire at a decent age, if not sooner.

6. Reinvested Growth Can Pay Off in the Long Run

Many stocks pay dividends, and reinvesting those dividends as well as any capital gains will benefit you over the long run. For example, if you're 25 today and invest $10,000, earning on average 6% annually, you will see your investment grow to just over $100,000 by the time you reach 65 — and that's only with a $10,000 investment today. Consider that the S&P 500 has averaged 9.6% annual returns over the last 25 years, which includes the tech bubble and 2008 credit crisis, and the growth you could enjoy might be even higher.

7. Time Is on Your Side

Of course, let's not forget that you're young, Millennials, and you have a several decades of saving and investing ahead of you — and that's a benefit that older investors don't have which can be used to your advantage.

"If Millennials are saving for retirement, their time horizon is much greater than someone older," says Pinkowski. "They have time to wait out blips in the stock market and can focus on the long term. They also won't need to withdraw any income, thus allowing the investments to grow over many years. The power of compounding can be astonishing. Albert Einstein once said, 'Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it.' Give your money a job and make it work for you!"

Are you afraid of the stock market?

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Afraid of Spending Money? Here Are 5 Perks of Your Phobia

Emily Guy Birken — Tue, 10 May 2016 10:00:09 +0000

Several years ago at a blogger conference, I was telling a fellow freelance writer how difficult it was for me to get work done while I traveled since I didn't have a laptop. It was 2012, and I had been a professional writer for two years at the time.

My colleague's mouth fell open. "You do know that you could take a tax deduction, right?" she reminded me.

I knew. I just couldn't justify the expense of a laptop when I had a perfectly good desktop computer to work from at home. Maybe my writing career wouldn't work out, after all, and then I'd have spent the money for nothing.

Looking back, I now realize that my irrational refusal to buy a laptop was probably a symptom of chrometophobia — the fear of money, or the fear of spending money. I have been a chrometophobe my entire life, even as a small child. I can remember refusing to spend snack money on a field trip in elementary school, just in case I needed the money later.

But unnecessary travel stress and rumbly tummy aside, being afraid to spend money isn't all bad. Here are five unexpected perks of feeling the irrational fear of spending money.

1. You're Covered in an Emergency

My fear of spending money really comes down to a fear of wasting money. I did not buy a laptop for myself until well after my first book was published because I was worried that purchasing a second computer would be a waste of money if my writing career didn't pan out. I didn't want to waste the cost of laptop if I didn't ultimately need it.

That level of irrational fear does give me a robust emergency fund, however. Since I am afraid to spend money unnecessarily, the unspent money ends up in my savings account, where I can count on it in case of a real emergency. I would even argue that I get much more visceral satisfaction out of seeing the numbers in my accounts go up than I ever would get out of buying a material possession.

2. You Find Creative Solutions to Problems

Spending money is often the simplest and easiest method of problem solving — but those problems still need to be solved if you are afraid to spend that money. For instance, while I was in graduate school, the latch on my favorite purse broke, making it impossible to close. I could have bought another purse or spent money to have it fixed. Instead, I decided to MacGyver it, and come up with my own solution.

With some hot glue and a color-coordinated hair rubber band, I managed to fashion a loop that held the latch closed and looked great, without spending a dime. It even made me love the purse more than I did before it broke.

3. Spring Cleaning Is MUCH Easier

While much of America is just now embracing the minimalist, Marie Kondo lifestyle, chrometophobes have long understood how beneficial it can be to own only what you need. If you are afraid to spend money, then your house will already be a lovely minimalist retreat, with no repeated trips to Goodwill necessary in order to get there.

Relatively empty homes are also much easier to keep clean and organized, meaning chrometophobes who also suffer from germaphobia have a leg up on keeping their homes nice and tidy.

4. Receiving Bills Is Not Stressful

The fear of spending money is not exactly fun. I can distinctly remember the ice cream my elementary school best friend bought on the field trip when I refused to spend my snack money, since it probably tasted much better than the air in my mouth.

However, when you feel stress about spending money, you don't feel financial stress at the time most people do — when receiving a bill. There is actually something rather satisfying about receiving your credit card bill with a $0 balance, because you've either spent no money or you keep it paid off.

5. You Avoid Getting Burned by Fads

For about as long as they have been available, I have yearned for a FitBit. This is because I have the (mistaken) impression that this is the gadget that will finally help me achieve my goals for fitness, sleep, and organization — along with the ability to summon unicorns. Despite all of the hopes that I have pinned on the FitBit, I have not yet purchased one because that would send my chrometophobia into overdrive.

However, not buying a FitBit (or any other must-have purchase) has proven to be a great thing. By not purchasing the latest thing as soon as it comes out, I am able to avoid the bugs that early adopters must put up with. Also, waiting allows the market plenty of time to come up with cheaper alternatives, and it means I have a wealth of reviews and information to learn from when I do finally decide to make a purchase.

Learning to Love Your Chrometophobia

It can be easy to only focus on ways that your fear of spending money can be a drag. But handled correctly, chrometophobia can actually enhance your bottom line without negatively affecting your life.

Just learn from my biggest mistake: Don't pass up the opportunity to buy ice cream. Ever.

Do you have a fear of spending money? Share your money management tips with us!

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Are You Letting FOMO Ruin Your Finances?

Emily Guy Birken — Thu, 10 Mar 2016 10:30:24 +0000

Back in the pre-social media dark ages, I had a friend who would spend every night out on his cell phone, trying to determine if there was a better event going on, so that he could make sure he was having the maximum amount of fun possible. He remains my benchmark for fear of missing out, or FOMO, since I have never met anyone before or since who was so worried about missing out on something more fun than what he was doing at that particular moment.

This friend relocated prior to the advent of social media, so I don't know how he has adapted to the rise of FOMO as a lifestyle via Facebook envy (although I do worry that his head has exploded). But sadly, he is no longer an anomaly.

Now that we live our entire lives on social media, recording everything from lavish vacations to delicious meals for posterity, FOMO has infected an entire generation. While FOMO can push you to live a fun and spontaneous life, it is more likely to make you overspend — without actually increasing your enjoyment.

FOMO doesn't have to ruin your finances or your evenings out. Here's what you need to know about keeping your fear of missing out from breaking your budget (or annoying your friends).

How FOMO Can Ruin Your Finances

FOMO is a relatively simple concept — it is the social anxiety that we might lose out on something more awesome than what we are already doing or already have. In other words, choosing any one option costs you the alternatives that you could have chosen. Economists, rather than calling this by its cool acronym, refer to this concept as "opportunity cost."

What makes FOMO/opportunity cost so insidious is the fact that you can easily forget what partaking in any fun activity will cost. For instance, when you are drooling over your friends' Instagrammed brunch photos while eating a bowl of Cheerios in your bathrobe, you tend to focus on how much fun they are having and how delicious the free-range gluten-free French toast looks, rather than the fact that they have probably blown $45 on lunch. (See also: 10 Things to Stop Doing on Social Media by 30)

Here are some other sneaky ways FOMO can break your budget.

1. Experiences

This is the classic FOMO expense. You spend money going out with friends, rather than finding cheap or free ways to have fun together. Fear of missing out on experiences can be even more devastating to a budget if there is an income disparity among a group of friends. It's very easy to spend money to keep up with your richest friend, rather than suggest cheaper alternatives or face the prospect of spending the evening with Netflix and a frozen burrito.

2. The Latest Gadget

The folks who line up overnight in order to be the first to score an iPhone 3.1415s are not camping out because they are convinced that the slightly improved product is going to change their lives — rather, they are afraid of what they will miss out on if they do not upgrade.

Technology seems to change at light speed these days, and not only do we fear missing out on cool new features, but we also fear becoming the luddite who doesn't even know how to use a phone to summon nearby unicorns. (That's what Uber does, right?)

3. Time

There is an incredible time cost to FOMO, since it often leads to constant checking for updates. If you are doing this on your own time, it may not cost you money per se, but it can certainly harm your relationships (as I hope my friend eventually learned).

But who hasn't checked Facebook or Twitter at work — or when they should have been studying? Loss of productive time because you are afraid of missing something can be incredibly costly.

4. Investments

Believe it or not, investors are often bitten by the FOMO bug. Generally, this happens when a particular investment or sector is going gangbusters, and investors are afraid of missing out on big money. Of course, FOMO is often what leads to bubbles, such as the housing crash of 2008. You may recall the number of people who got into home flipping prior to the crash — who were then left holding the bag after the bubble burst.

Breaking FOMO's Hold on Your Wallet

While there is no way to completely turn off FOMO, there are several ways to lessen the effect enough to stay on budget.

5. Schedule Fun Ahead of Time

FOMO is most likely to strike if you find yourself on Friday afternoon staring down an empty weekend. Not only is that a bad time to make plans for logistical reasons, but it is also a good way to get stuck in my friend's trap, where he would spend all of his "fun" time trying to find something more fun to do.

Instead, schedule your fun ahead of time. Not only will you not be tempted by last-minute invitations, but you will also enjoy your planned outing even more than a spontaneous one. According to psychologists who study the science of happiness, we feel an extra boost of pleasure when we consciously delay enjoyment. So looking forward to your board game night or your weekend camping trip will add to the pleasure of those events — which is something the last-minute invitation to the lavish party can't offer.

6. Take a Social Media Fast

The big surge in the feeling of FOMO is due to the rise of social media. Back when you heard about the awesome party after the fact, or only learned of your old roommate's incredible vacation to Hawaii when you randomly ran into him at the store, there was no time for you to worry about missing out on their awesome experiences.

These days, we know about things in real time, and it can make us feel everything from envy to regret to dissatisfaction with our own lives. In fact, according to a 2013 study, the more people use Facebook, the worse they feel after logging off.

Turning off the social media — whether for a couple of hours, days, or weeks — can do wonders for making you feel better about your own life. For starters, you won't be able to compare your regular life to the polished version of your friends' lives online. In addition, we often check social media due to boredom, and taking a break from your feeds can prompt you to get back to the cool hobbies you don't have time for anymore. And nothing kills FOMO faster than working on something you enjoy.

7. Carry Cash

A simple way to fight FOMO in the moment is to make sure you only carry cash on your nights out. The last-minute invitation to the swanky club sounds a lot less tempting if you have to only drink water or stop at the ATM on the way. And having even a moment to think about whether you really want to do something can be enough for your better nature to prevail.

8. Acknowledge the Opportunity Cost

What makes FOMO so devastating is the sense that the stakes are very high. You are not concerned or nervous about missing out — you are afraid of missing the greatest opportunity of all time!!

So it helps to take a moment and really think about what it is that you will miss out on. Acknowledge that there is a cost to missing out on an opportunity and think through all of the ramifications of that cost.

Often, that is enough for you to recognize that the stakes are not nearly as high as you fear. And if you decide you don't want to miss out, it gives you the time to think about how you can afford to partake and what other costs you are willing to pay. For instance, if you absolutely must join your friends for drinks once a week, you could decide to forgo your daily latte to pay for it.

FOMO might be the 21st century acronym for the phenomenon, but human beings have always struggled with concerns about the grass being greener on the other side. Embracing the opportunities you do take is the key to breaking FOMO's grip on your life and your finances.

Do you experience FOMO? How do you deal with it? Share with us in the comments!

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Zen Concepts That'll Improve Your Finances

Sarah Winfrey — Tue, 17 Nov 2015 18:15:36 +0000

Zen and personal finance — sounds a little "woo woo," right? Except that there are actually several Zen concepts that can help you gain a different perspective on your money and improve your finances. Give it a try! Here are four ways that going Zen can help you handle your money better.

1. Fight Craving With Self-Awareness

Central to Zen is the idea that craving things causes us to experience bitterness, pain, and unease, and that the remedy for this lies in self-awareness. Basically, we see things (or people, or vacations, etc.) that we want. If we don't have them, we are unhappy. To get rid of this unhappiness, we need to understand our cravings better, rather than give into them without analysis.

This can be as simple as asking, "Why do I want this right now?" Make sure to always weigh a "want" versus a "need." Sometimes, we crave something so badly that we feel like we need it — but in reality, we don't.

2. Understand That Fear Gets Us Into Trouble

Zen says that a lot of people find fear or uneasiness at the bottom of their wants. They crave things because they feel like having them will resolve some anxiety. For instance, one person might want a larger retirement fund, and find at the bottom of that craving is the fear of being poor and elderly.

Finding this fear allows us to make conscious, intentional choices about how to address it. Maybe we do need to save more, not to provide ourselves with full security, but because it's a smart thing to do. In that case, we can slow down, make a plan, and stick to it, rather than blindly throwing money at our anxieties. Discovering our fears also allows us to address them in other ways, be that talking about them to a friend or finding a therapist

3. Stay Present in the Present

When it comes to money, the very best place to focus is on the present, which is central to Zen philosophy. If, for instance, the market drops suddenly, staying present might help you decide to hold an investment and ride out the swings, rather than sell too low and frantically buy whatever seems like it might be doing well. If you lose your job, staying present can help you deal with the stressful feelings in a healthy, productive way, rather than drowning in depression, trying to fill the void by buying things, or making hasty decisions about future employment.

4. Tell the Truth About Your Money

Shizen is a Japanese Zen concept of presenting yourself to the world as your true self, without pretense or lies. This means ignoring the desire to try and live wealthier than your means, and only buying things you can actually afford. It requires us to be honest with ourselves about how much money we really have. This is a truth we must face in order to live well.

Making a budget can be the first step to finding the truth of your finances. Many of us don't even know how much money we have or where it's going. When you write down your income and outflow, you'll have a much better picture of your situation. This will allow you to make realistic, honest decisions about how you spend.

Do you practice any Zen concepts that influence your finances? How does that work for you?

This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

24 Helpful Travel Hacks to Make Flying Stress-Free

POPSUGAR Smart Living — Fri, 13 Feb 2015 10:00:10 +0000

Traveling on a plane around the holidays can be pretty stressful, especially if you're not a particular fan of flying as it is. If the bumps on your flight make you anxious — or worse, sick to your stomach — then follow a few simple tips that real flyers gave us on how to have a stress-free plane ride and travel experience in general. Try these tips and some , and you may even end up looking forward to your flight!

For Anxiety:

1. Be Prepared

Pack completely the night before so that you can get a good night's sleep without worrying about last-minute details. Get to the airport earlier so you aren't stressed out about time.

2. Know Your Facts

Read plane crash statistics and facts, because, statistically speaking, crashes are extremely rare. Remind yourself that it's safer to fly than to drive, and research why you shouldn't be afraid of turbulence.

3. Get Comfortable

Once you board the plane, do your best to get comfortable immediately. Adjust the air conditioning, have a snack or some water, read a book or magazine, take deep breaths, and try to relax.

4. Sleep

Consider taking Dramamine or an antianxiety medicine that may help you sleep. If you're sleeping, you can't be nervous!

5. Fly During the Day

Sometimes flying during the day (when possible) is less stressful because it can lessen the feeling of being closed in, which tends to be worse in the blackness of night.

6. Make Friends

If you are a really nervous flyer, then try striking up a conversation with a stranger and let them know that you are nervous. This can be a good conversation starter and a useful distraction — especially during takeoff. Even if the plane hits turbulence during the flight, that person can help reassure you.

7. Use Your Imagination

Imagine the plane landing safely on the ground every time you're nervous.

8. Enjoy a Beverage

A preflight cocktail (and if necessary, a midflight cocktail) can be helpful.

9. Expect Issues

Especially when traveling over the holidays, always expect delays. That way, you aren't stressed out, upset, or surprised when they inevitably happen. In fact, when and if your flight takes off on time, it will feel like a pretty big victory.

10. Make a Playlist

Listen to calming music that will help you relax and sleep.

11. Distract Yourself

If takeoffs are what cause you the most anxiety, find a good podcast — something with a calming voice or something funny — and turn it up loud enough to drown out surrounding noise (but not loud enough to drive your neighbor nuts!), or play a game on your device that requires all of your attention (preferably with a timer) so that you can't look away and don't even notice the takeoff.

12. Block It All Out

Use noise-canceling headphones to block out noises and distract yourself with books, music, magazines, podcasts, movies, or TV shows.

13. Use Calming Techniques

Wear something around your wrist that you can jangle, pull, or snap, which can distract you just enough to get through the takeoff or turbulence.

14. Rationalize

Think about the fact that all the flight attendants in the plane fly nearly every day, and they are all perfectly fine.

For Motion Sickness:

15. Ginger Is Key

If you are prone to motion sickness, drink ginger ale or eat ginger chews to soothe your stomach.

16. Eat Mints or Chew Gum

Sometimes the coolness and freshness of mints, mint gum, mint tea, or Tic Tacs can help relieve some nausea. Chewing gum can also help, but avoid sugarfree gum, which can upset your stomach. Cinnamon gum, like Big Red, is a good option.

17. Buy a Motion Sickness Band

A motion sickness band uses acupressure to stimulate your body's ability to fight off nausea.

18. Don't Read

Avoid any kind of reading, including any phone applications, when taking off and landing and during periods of turbulence.

19. Drink Water

Make sure to stay hydrated and avoid alcoholic beverages or coffee.

20. Take Dramamine

Try taking Dramamine about an hour before you will be on the plane.

21. Find a Fixed Point

If the takeoff, landing, or plane ride is bumpy, keep your eyes on the horizon so that you're focused on a fixed point.

22. Plan Ahead

For the 12 hours before you'll be traveling, stick to simple, easy-to-digest foods, avoiding lettuce, nuts, and any kind of dairy.

23. Breathe!

Try taking deep breaths, which will help to relax the muscles that tend to contract when you're feeling sick.

24. Bring a Fan

Pack a portable fan! Keeping yourself cool can do wonders for motion sickness.

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From drop-off at the curb to touchdown at your destination, flying is filled with stress inducers. Take the edge off with some simple relaxers.

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This article is from POPSUGAR Smart Living of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Get Over These 5 Scary Things About Investing

Julie Rains — Mon, 27 Oct 2014 13:00:06 +0000

I was never scared to invest.

The moment I had discretionary income, I started investing. I paid no attention to market moves until Black Monday, October 19, 1987. At the time, my husband owned stock in his employer and we lost hundreds of dollars in one day. And after that? We kept investing. Though spooked by this major downturn, we persisted and today remain happily invested. (See also: 6 Basics You Must Know Before You Start Investing)

Don't let fear prevent financial success, and take a minute to think about whether you harbor and of these five common (but ultimately counterproductive) fears about investing.

1. You Can Lose Money Quickly

Even if you invest in market-index funds that track the market, you can lose money quickly if the entire market falls in value. Unlike the interest credited to your savings account, gains in the stock market are not linear with steady growth over time. Instead, your investments may decline before growing.

No one can consistently predict when the stock market as a whole or individual shares of a company's stock will rise or fall. So, whether you are a beginning investor or a seasoned one, you will experience drops in the value of your investments, often dramatic ones in a short period of time.

Fight the fear: Invest to build wealth over the long term, not to make fast money in the short term. Never invest cash that you need to pay expenses.

2. You Have a Large Position in Your Company's Stock and the Share Price Plunges

One of the scariest investment scenarios is the sudden drop of your employer's stock when shares comprise the majority of your wealth.

For example, retirees of Lucent Technologies went from millionaire status to nearly penniless when shares fell to $0.55 in 2002 from a high of $84 in the late 1990s. Similarly, employees who held Enron in their 401(k) plans and ESOPs (employee stock ownership plans) experienced major losses when the company declared bankruptcy.

Fight the fear: Realize that company stock is not inherently bad, just inherently risky as a major component of your wealth. After all, Microsoft and Google employees became wealthy after receiving company stock through stock options and profit-sharing programs. Just remember to diversify your holdings by investing 401(k) dollars in market-index or similar funds and making outside investments in other stocks.

3. You Will Invest in Something You Don't Understand

You may have heard that you should never invest in anything you don't understand. Even billionaire Warren Buffett refused to invest in tech stocks because he didn't grasp how technology companies made money.

But understanding often follows action. So, if you are a beginning investor, you may purchase shares of a mutual fund that tracks the S&P 500 without fully comprehending what you are buying. Later, you may notice that the fund value increases on the days that this index rises and decreases on the days that it falls. Eventually, you grasp the correlation; now you are (finally) putting money in investments you understand.

Fight the fear: Educate yourself about investing before making a move. Then, start by investing small amounts with a trusted brokerage firm until you feel comfortable with the process; pay attention to your investments to gain understanding. Stay away from investments that are portrayed as high return, low risk, complex, and/or available to an exclusive list of people as these are likely to be speculative investments at best or fraudulent schemes at worst.

4. You Will Make Mistakes

No one likes to make mistakes, particularly ones that involve losing money. But if you are an investor, you will misjudge market direction, buy overpriced shares, sell investments when they still have potential to grow, etc. You just will.

Fight the fear: Don't berate yourself if an investment doesn't behave as expected. Note your rationale for making a decision, track your results, pinpoint the sources of mistakes, learn from the experience, and move on. Also, realize that your goal is to build wealth, not perfectly time each transaction. Selling shares at a gain (even if the stock price continues to climb), for example, may be the right action to take, given your financial situation.

5. You Will Brag About an Investment, Which Then Slips

After you master investing basics, you will likely begin to feel more confident as an investor. So, you might start evaluating and then investing in individual stocks or actively-managed funds in addition to market-index funds.

On a good day, week, or month, you may make hundreds or thousands of dollars and boast about your achievements to friends. Soon, though, the price of your picks may fall and you feel foolish for bragging. Being discovered as an average investor or a flawed one is scary.

Fight the fear: Realize that you will make mistakes and great stocks will slip, even when you buy shares at an excellent price. Discuss the economy, investment styles, and the performance of publicly-held companies with friends or coworkers. But avoid broadcasting specific investment moves.

Do you still think investing is scary? Well, you could be safe and put money in a traditional savings account or certificate of deposit. Sadly, though, annual interest of 1% or less means that the buying power of your money is unlikely to keep pace with inflation.

But if you take risks, you have the opportunity to participate in the growth of the economy, which has historically yielded greater returns than safer investments. Sure, investing mistakes can be haunting. But staying on the investment sidelines and having little wealth when you retire is even scarier.

How did you overcome your fear of investing? And if you are still afraid, what are you afraid of?

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways the Ebola Outbreak Could Hurt the Economy — And Your Wallet

Brittany Lyte — Fri, 24 Oct 2014 13:00:04 +0000

We all know that the Ebola virus probably is not a threat to our health — but what about our fiscal health? As this deadly global story comes to a boil, it's also taking its toll on our wallets. And while nothing could compare to the deadly effects of the disease, these financial concerns are worth keeping an eye on.

1. There Could Be a Global Financial Collapse

Analysts at Barclays are warning that the continued spread of the deadly Ebola virus beyond the confines of West Africa could have a "significant" impact on the financial markets. "Ebola's likelihood of spreading to larger, more integrated economies has increased," Barclays' Marvin Barth told The Telegraph.

Already the disease has sparked a sell-off of travel and airline stocks worldwide. "If consumers and businesses retrench by reducing flights on airplanes, changing vacation plans, or altering business connections in a globally interdependent world, G.D.P. growth rates will fall farther," wrote David R. Kotok, chairman and chief investment officer of Cumberland Advisors. "We do not know how much, at what speed, or for how long."

In terms of its potential to wreak havoc on the markets, experts are comparing Ebola to Asia's outbreak of the airborne SARS virus in 2003. Not only did SARS rattle regional tourism and China's stock exchange, it also instigated a pronounced slump in retail sales.

2. The Price of Chocolate Could Skyrocket

Hold on to your chocolate bars! The price of cocoa beans spiked more than 10% last month due to fears that Ebola could spread to the Ivory Coast, the world's largest producer of chocolate's main ingredient. Ivory Coast shares a border with Guinea and Liberia, two of the three countries (the third being Sierra Leone) that are most affected by the virus. Not only is this West African region ground zero for Ebola, but it's also home of 70% of the world's cocoa supply. With Halloween just around the corner and the holiday season soon to follow, Nestle's chief executive has said the company is on "high alert."

3. Airline Stocks Could Take a Plunge

Airline stocks are already down about 7% due to fears of a global health crisis. And on the heels of news earlier this month that a medical worker contracted Ebola in Spain, shares in IAG, which owns British Airways and Iberia, as well as the cruise operator Carnival, dropped nearly 9% in two days, largely due to concerns about the potential for future travel bans. Meanwhile, the World Travel and Tourism Council that represents airlines, hotels, and other travel companies is reporting a 30% plunge in early bookings to Africa, where the disease is deeply entrenched. But experts say the outlook for airline companies and their shareholders could likely get much, much worse.

"It certainly depends on how serious and how widespread the situation becomes," Michelle Girard, chief economist at RBS, told a reporter for Yahoo! Finance. "Of course, people talk about, 'What if it becomes airborne?' And then you have a scenario where the borders are shut and people are afraid to travel, not just internationally, but perhaps domestically. If there are concerns about… being trapped on an airplane with the potential for somebody to be spreading the virus. Those are all the things that people are worried about, and you can understand that forward-looking investors are beginning to at least price in. [They] feel the need to price in some probability or some sort of risk of that [happening], albeit small."

4. Travel Insurance Could Become a Must

Global health and safety events are among the top reasons why nearly half of all jetsetting Americans consider purchasing travel insurance for international trips, according to data from Allianz Global Assistance USA. After Sept. 11, for example, there was a 10% bump in spending by Americans on airline travel insurance. But right now only about a third of Americans flying to foreign destinations actually follow through and buy the insurance. Experts say that's likely to change. As the Ebola virus continues on its cross-continental course, infecting numerous persons who either caught the virus or transported it via airplane, it's likely that more Americans will begin to view spending on airline travel insurance as a necessity.

5. The Health Care System Could Be Taken for a Ride

Nobody has yet to calculate the fallout of the Ebola virus on the health care system — neither here in North America nor abroad. But what's clear is that the money being poured into the fight against the disease (training, testing, treatment, waste disposal) — not to mention the money lost as hospital beds sit unused in isolation areas — will certainly affect the industry.

"One of the things I fear about Ebola is that it could spread more widely in Africa," Center for Disease Control Director Dr. Thomas Frieden told a congressional hearing. "If this were to happen, it could become a threat to our health system and the healthcare we give for a long time to come."

How fearful are you about Ebola?

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Do You Have Any of These 4 Most Irrational Fears?

Brittany Lyte — Mon, 29 Sep 2014 11:00:04 +0000

Everyone's afraid of something — and rightfully so. Masked murderers, burning candles left unattended overnight, and rabid animals are all perfectly healthy things to fear, since they've been known to cause harm or death. (See also: 9 Techniques That Can Help You Conquer Any Fear)

But clowns? As far as we can tell, no one has ever been killed or badly injured by a stuffed clown doll. Not even the walking-talking kind found at the circus. Yet coulrophobia, as it's called, is real for many people. It's true: A series of clown sightings in an English town a year ago set off widespread panic and heavy police involvement. This incident alone speaks volumes about how widespread clown phobia really is.

Read on for our roundup of the top four real — yet completely irrational fears — that plague even the most level-headed among us.

1. Clowns

Clowns are supposed to make us laugh. But for many people, just the sight of one of these red-nosed tricksters conjures up the heebie-jeebies — if not catapulting them into all-out panic mode.

While there are no statistics on just how many people suffer from an irrational fear of clowns, studies show it's probably more common than we think. British researchers found that wall-hung pictures of clowns in doctor's offices evoked negative feelings ranging from mild dislike to intense hatred in all of the 255 children between the ages of 4 and 16 who were questioned about them.

"We found that clowns are universally disliked by children," said researcher Penny Curtis. "Some found the clown images to be quite frightening."

2. Spiders

Spiders have a way of sneaking up on us — often we don't notice them 'til they're far too close for comfort. Plus, the webs they weave are creepy. And they've got a lot of legs. These are the major reasons why more than 9 million Americans — or 3.5% of adults — are afraid of them.

Okay, you probably could have figured that out on your own. But swallow this. Even many entomologists — the people who study spiders and insects for a living — experience a feeling of panic when in close quarters with these eight-legged creatures. Sort of like an air traffic controller who's afraid of planes. Rather silly, don't you think? Especially when considering that the U.S. has only two spider types — black widows and brown recluses — that can be harmful to humans. Just a dozen of the 40,000 spider species worldwide are venomous. In fact, most spiders aren't even capable of piercing the skin.

"I've had 100 recluse spiders running up my arm, and I've never been bitten by one," retired arachnologist Rick Vetter told LiveScience.

Arachnapobiacs can typically trace their extreme fear of spiders to childhood, research shows. Yet unlike toddlers who live in fear of the the Bogey Man, arachnophobiacs haven't outgrown that feeling of dread.

3. Failure

The funny thing about failure is this: The more we dodge opportunities because we fear it, the less likely we are to succeed. Fear of failure makes us stagnant. It breeds procrastination. Indeed, it is fear of failure that makes us fail because it greatly reduces our chances at success.

If you're having misgivings about any of this, a famous line from Thomas Edison should squash all doubts: "I have not failed 10,000 times. I have not failed once. I have succeeded in proving that those 10,000 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work."

Afterall, this is the man who invented the lightbulb — apparently on attempt number 10,001.

4. The Dark

Walk into a windowless room. Now turn out the lights. Nothing has changed, save for your ability to see. And maybe something else: Do you feel something? A tremor of fear, perhaps?

Studies show that fear of darkness is actually fear of the unknown. It's one of the reasons many of us dread spiders — the creepy crawlies have a way of sneaking up on us. It's startling at best. But for someone with a spider phobia, it's an all-out terror.

Fear of the dark is quite similar. Many of us fear what we can't see, or what we can see only when it's already upon us. Humans are highly visual people. We depend on our sense of sight more than any of the other senses. And when it's impaired or eliminated, we tend to freak out.

What are you afraid of that you know you probably shouldn't be? Please share in comments (where it's well-lit, there are no spiders nor clowns, and failure is not an option).

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

You're Blocking Your Own Success — Here's How to Stop

Kate Luther — Fri, 18 Apr 2014 08:36:17 +0000

Much has been written about the concept of success… oodles, in fact, all claiming to deliver the proverbial key that will help you get from here to there.

Proper planning is apparently crucial for example, as is unyielding determination. Setting goals that are measurable is also said to be important, as it allows you to monitor your progress and celebrate your milestones. (See also: Build on Your Strengths to Succeed)

And all of this is good, sound advice; so good, in fact, that I've given it myself on more than one occasion. But sometimes, even the best laid plans and the most dedicated dispositions have trouble standing up to the obstacles we ourselves create.

You heard me… sometimes, what keeps you from success is you — your beliefs, your fears, your inability to "go with the flow."

So, here's how to stop standing in your own way.

Let Go of Expectations

When we decided we wanted to move out of the city, we spent months looking for just the right house. The one we wanted — the one we thought was perfect — sat on three acres just twenty minutes outside of town.

We submitted an offer, the seller accepted, and we thought we had found our new home.

The Universe it seems didn't agree, because we encountered one obstacle after another. The roof would have to be replaced, the septic hadn't been properly installed, and, if you can believe it, our refrigerator was too big for the allotted space in the kitchen.

And that was just the tip of the iceberg. Physical repairs aside, our mortgage company suddenly got cold feet. They wanted more inspections. They didn't like the zoning. Our previously approved application now needed more employment history and bank statements.

We pushed and pushed to make the deal work but for every problem we solved, two more popped up in its place until we finally had to admit defeat. It was, I believed at the time, one of my biggest disappointments, ever.

Until the next day, that is, when we found the house we're living in now.

The roof and plumbing were all good, our refrigerator fit just fine, and we even had more land. Interestingly, there were no obstacles to buying this house, no delays, no roadblocks to our success. We submitted an offer and closed within 30 days.

And I've been "home" ever since.

The point is, we spend quite a bit of time deciding what we want, right down to the last detail. But sometimes, we need to let all those requirements go. Having such a rigid definition of success means that we're attached to a specific outcome. And if there's one constant in the Universe, it's that life is full of surprises. (See also: What Financial Success Means to You)

So, while you're working diligently toward a particular goal by following your detailed plan of action, you risk missing a whole host of other opportunities that might actually be better than what you had in mind.

Does this mean that you can't dream of a bigger salary or a flashy, red car or that perfect house in the country?

Absolutely not… but don't be so quick to dismiss it as a failure when things don't go as planned. Instead, take a step back and get a more objective point of view. You might find something new and wonderful waiting around the corner.

Let Go of Entitlement

And while we're talking about things we want, let's go one step further and talk about the things we're owed. Why? Because we're preoccupied with those things and it's keeping us from becoming all that we can be.

We went to college, therefore we should have a job. We worked hard, therefore we should get a raise. We tried our best, therefore our best should be good enough to get whatever it is we covet.

But sometimes, it isn't. We don't always win, and we won't always get what we want. The sooner we can come to grips with that fact, the sooner we can start to move forward.

Entitlement breeds anger. It fosters jealousy, contempt, and distrust. When we feel entitled, we also generally feel betrayed because we didn't get what was somehow rightfully ours. We got screwed… and someone, somewhere is to blame.

The result is the world as we see it now: people obsessed with an endless game of "mine" and paranoid about who might be plotting to usurp them. We'll quickly join forces with others we believe share our desire to protect those entitlements, but only insofar as their right to something doesn't interfere with our own.

In fact, if it comes down to a question of whose entitlement takes precedence, you can bet that the other guy is going to lose, and we become so consumed by what should be ours, that we lose sight of what could be ours.

Bottom line: You'll never have what you want if your life is built around what you don't.

Let Go of the Need for Approval

When I left high school, I did so with the belief that I needed to go out and find a job that would pay well and offer me opportunities for advancement.

I had this belief because that's what my mom did and that's what my counselors told me to do, and according to all my well-meaning relatives ready to offer advice, that's what I was supposed to do. (See also: Success Secrets You Should’ve Learned in High School)

And back then, I was all about gaining the approval of others.

As a result, I went into respectable fields like insurance and banking. I wore power suits every day, so others would take me seriously, and I had myself convinced that I'd find the happiness I was looking for once I had climbed that corporate ladder.

The funny thing is, my happiness wasn't on that ladder. I'm much happier now that I've permanently thrown away the pantyhose and started following a path that's more me, instead of doing what everyone else said I should do.

And you should try doing the same.

You have a choice. You've always had a choice. It's OK not to fit in. It's OK to follow your own path and see where it leads rather than arranging your life to fit someone else's concept of success.

Figure that out, and you'll find the adventure you're looking for. Figure that out, and you'll find happiness.

Let Go of the Past

Author Steve Maraboli once wrote, "Letting go means to come to the realization that some people are a part of your history, but not a part of your destiny," and yet, as true as that is, letting go of the past is often one of the hardest things to do.

As a result, we come with a lot of baggage. All those skeletons in our closet, all those preconceived beliefs about how the world works and what we can expect from the future. That's the baggage we've accumulated over the years, and we're determined to carry it around with us, no matter how much it weighs us down.

The past holds all of our regrets, the things we didn't do and wish we had, the things we did do and wish we hadn't. It reminds us of our limitations, our shortcomings, and all the opportunities that we allowed to pass us by.

Of course, clinging to this pool of disappointments only serves to limit us further, by reinforcing the idea that we "can't" do something or that we're doomed to "bad luck," but we tote it around anyway because somewhere deep down inside, we're hoping to one day atone for those sins and perhaps even get a do-over. Eventually, however, we begin to build our reality around all of that baggage and it becomes our self-fulfilling prophecy. We can't because we believe we can't, and we believe we can't because we never have.

So, break the cycle.

Start by reminding yourself that the past does not define you or your future. You get to choose how you want to apply those lessons from the past to your current life and move on.

My favorite mantra — it is what it is — works perfectly here. You can't change what happened, but you can decide what you take from the experience and more importantly, how you want to go forward. Getting to this place of acceptance allows you to weigh the pros and cons, determine your best course of action, and get on with your life. That alone will make you feel loads better.

Perhaps that's the real mark of winning: acceptance. Taking the bad with the good, the happy as well as the sad and accepting it for what it is — life. It isn't perfect and it's not always easy. But it's yours.

And you can choose to make it whatever you want it to be.

Let Go of Fear

Much of my life as a freelance writer is spent creating copy for other people. I write blogs and ebooks, sales pages and emails, web copy, marketing copy, and everything else in between. I've created entire courses for my clients — from scratch — and then marketed them with great success, making my clients a nice chunk of change in the process.

You'd think then, wouldn't you, that I could do the same for me.

But funny story… when I try to create my own products and services, all my creative juices just magically disappear. Oh, I have tons of ideas, complete with outlines and marketing plans, but they sit in my office, incomplete and collecting dust.

And as much as I want to see them come to life, I have this sinking feeling that's where they'll stay.

Why don't I finish one of those babies and retire as a self-made entrepreneur? Simple. I'm afraid.

When I'm writing for someone else, when I'm brainstorming and marketing and analyzing, I have all the confidence in the world. I know my stuff, and I know that I know it.

But when I try to branch out on my own, something strange happens. That unwavering confidence fades and is replaced with a whole host of nagging little voices telling me to revise, rethink, and regroup.

I'm afraid of failing — and I'm afraid of succeeding. I'm afraid that people won't like what I write or someone will prove my idea wrong or, I don't know, that I'll make too much money and I won't know how to handle the taxes.

Crazy, right?

Which is why we need to let it go. Fear serves no purpose. It pins us down, it holds us back, but not because there's danger nearby. That kind of fear at least, would be useful, forcing us to proceed with caution lest we fall prey to something unfortunate or unsavory. (See also: Techniques to Conquer Any Fear)

But this kind of fear is different. This is the fear that keeps you from asking for a promotion. It stops you from speaking your mind, standing up against injustice, and saying hello to that cute guy or girl that lives down the hall.

This kind of fear doesn't keep you safe. No, this kind of fear causes you to act irrationally, miss opportunities, and settle for something less than the life you want to live.

This fear would have you believe that you don't deserve success, that you're not good enough, smart enough, strong enough to win, and that you'll never be anything more than you are now.

But don't you believe it. You do, you are, and you will.

Let Go of Negative Thinking

Now, despite all that fear I'm lugging around, I'm also an eternal optimist, and it is that trait that allows me to keep trying to create that first million-dollar idea.

Yes, I'm well aware that my fear may yet win out, and I might never achieve the goals that I've set. The minute I stop believing is the minute those possibilities disappear.

In other words, what you think — how you think — has much to do with your success.

Between feeling afraid of what might happen and feeling angry about what should have happened but didn't, there's a lot of negative thinking floating around out there, and it's quite likely that it's keeping you from where you want to go.

In his book, "The Biology of Belief," cell biologist Dr. Bruce Lipton writes at length about the profound effects that thought has on our physical being. According to Dr. Lipton, it is not DNA that controls our body; instead, our DNA is controlled by signals outside the cell, including the energy that emanates from our thoughts.

"There is no doubt that human beings have a great capacity for sticking to false beliefs with a great passion and tenacity," he writes. And if that passion for false beliefs can affect our DNA at a cellular level, then what do you suppose it can do to your ability to succeed?

So, shake the voice that says "you can't" and prove it wrong. You may not always get what you want. You might stumble, fall and fail more often than not, but you can always try again.

And again. And again. Because giving up is worse than facing all your fears.

Now, it's your turn to fess up. What's holding you back? What do you need to let go?

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This article is from Kate Luther of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Stop Being Afraid and Live Your Dreams

Christa Avampato — Mon, 17 Mar 2014 10:24:46 +0000

Babe Ruth once said, "It's hard to beat a person who never gives up." To achieve our dreams, we have to be committed and determined. The twin fears of failure and rejection keep many people from pursuing what they want — dream careers, loving relationships, passion projects, and even moving to a new city. Fear is a powerful deterrent, although we can also turn it into an ally and motivator. Fear is just energy; it can either hold us back or propel us forward. Below are six ways to make it work for you. (See also: How to Do Things That Scare You)

1. Take Small, Low-Risk Steps

Sometimes a big change can feel like an overwhelming risk. We run what-if scenarios over and over in our minds. Try breaking down your big goal into as many small pieces as possible. For example, let's assume you dream about making a move to a city far from where you live now, and you don't know anyone there. Some small steps might be to get a guidebook about the city, read local blogs authored by people who live there, connect with friends of friends who live there to get their perspective, and take a long weekend trip to visit. These small steps will give you information and experience, build excitement about the possibility of making the move, and reduce the risk you feel about taking such a big step.

2. Get Inspiration From Others

One of the best ways to reduce fear is to hear the stories of others who have done what you want to do, particularly if they went through rejection and challenging times to make it. Seek out books, inspirational blog posts and news articles, and people in your network who have done things you want to do. Learn from their experiences, and if possible, connect directly to find out how they kept up their courage while pursuing their dreams despite rejection. When you see someone who's made his or her dreams come true, it's easier to imagine yourself in that same position. Those inspirational stories will also keep you motivated and strong if your plans don't unfold exactly the way you want. (See also: How I Erased $70,000 of Debt)

3. Become Informed

Knowledge is power. It's also a surefire way to fight fear. Many times what we don't know is what scares us. If you're thinking about a new career path, take a beginner's class related to your dream job. Volunteer or get an internship with someone who can show you the ropes. Go to networking and other industry-related events where you can meet people who share your passion.

For example, I started my career in theater, although most of my work was on the business and production side. When I decided I wanted to try my hand at writing an original full-length play, I connected with a dear friend of mine who is a theater professor and told him my idea. That was a frightening admission for me; the goal felt so big and I had never tried to write a play before. My friend coached me through the process and suggested playwrights that I should read to see how they structured their plays. I also did a lot of research on correct formatting, plot and character development, and the process of getting a play produced from scratch. Once my play was written, I then did another batch of research to discover what companies and contests I should approach to get my work read and possibly accepted for production. All of this research and information really helped me put aside my fear and accomplish this personal and professional goal.

4. Practice Rejection

Just like fear of the unknown, fear of rejection is scariest the first couple of times it happens. At this point, I've been rejected and disappointed so many times that it's honestly no big deal to me anymore. Over the years, I've submitted for many writing and consulting opportunities that never worked out. Many times I never even heard if my submission was received and reviewed. I see all of these rejections as part of the path to achieving my dreams. Just as we can practice our skills to improve them, we can also practice rejection. Imagine the worst-case scenario. What would you do if you tried something and it didn't work out the way you wanted? Sit with those emotions for a few minutes. Then, take a deep breath and imagine yourself moving on. Rejection may set you back, but it doesn't have to break you. (See also: Staying Motivated When the Going Gets Tough)

5. Create Your Success

We can create our own success rather than waiting for others to provide us with opportunities to be successful. This is especially true for writers and content creators. Traditional media used to own communication channels. Now with blogs, social media, and self-publishing, all of us are mini-media companies. We can quickly, easily, and cheaply get our writing, videos, and creative work in front of others and immediately get feedback. That feedback will teach us something and make us better if we give ourselves the chance to try. (See also: Build on Your Strengths to Find Success)

6. Give Your Disappointment Somewhere to Go

The worst part of rejection is the fear of how we'll feel if it happens. Rather than worrying about that, make a commitment about what you'll do if rejection comes your way. Have an outlet to help you get rid of your disappointment. This could be exercise or a support network of friends and family. When I was first starting out as a writer, I faced a lot of rejection. I decided that every time I got rejected, I would do something nice for someone. That could be sending a note to a friend I hadn't spoken to in a while to say I was thinking of him or her or taking the extra time to smile and ask the cashier at my local drugstore how their day is going. This way the rejection was transformed into a positive action and it made me feel good to do these nice things for people. I also would remind myself that getting a rejection put me one step closer to finding the right opportunity.

Rejection, failure, and disappointment are natural parts of life. As the great Dolly Parton said, "If you want the rainbow, you gotta put up with the rain." Use these tips to manage your fear and then go get exactly the life you want.

How do you deal with fear of rejection? Don't be afraid, share your experience in comments!

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This article is from Christa Avampato of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: