[USER]

Advice wanted. I haven’t gotten past the fear of investing even at 31. I’m just sitting on cash.

I feel somewhat burned from my upbringing watching my dad invest in a 529 and lose it the year I went to college.

It just seems like it’s a legal way to gamble but I do know I lose value having it just sit in the hysa.

[Molly]

Go easy on yourself and also start reading some of these recommended books and listen to some podcasts like ChooseFI.

Right now with HYSA saving rates so high, it’s not the end of the world, but this is a temporary situation.

If you don’t need the cash (like as a down payment on real estate or something), keep in mind that you may never reach FI unless you invest.

Saving is not enough. But…. Think about who you are, and find a strategy that works for you emotionally and for your goals.

For example, maybe use that cash as a down payment on a duplex and have your tenant pay for your investment, while you have a free/reduced cost place to live.

Surround yourself with savers instead of spenders. Dip a toe into investing in your tax advantaged accounts (401k/trad ira, hsa, etc).

It’s a great first step that you recognize your own fears. Are you more afraid of having to work until you die?

You have the huge advantage of youth and time in the market- you can do this!

[Jeff]

Education is what will help. Read Bogleheads Guide to Investing.
Read and start implementing slowly over time to build confidence that what you learned will work as advertised.

[Riley]

Something isn’t adding up
I saved for my boys 529 plans and my oldest is your age. Back then most 529 plans are more conservatively managed in nature and while we took a big hit, they didn’t lose 50% like the major indexes.

I remember losing enough to get back to the amount we originally invested 4 years prior.

Unless he was playing with the money in risky single investments, even if it dropped, it should have returned by the time you went to school

[Tweetie]

how about this: go on and invest that money into the market and then start teaching yourself about the bucket strategy.

[David]

The stock market has always felt like a gamble to me. For the past 8 years I’ve been 100% in real estate and sleep so much better and the returns have been many X the stock market.

Quality rental properties and good locations have very little risk, if you have sufficient reserves.

Rents go up, mortgage stays the same (except taxes and insurance) so it’s pretty safe if the numbers work and you really screen tenants

[Amy]

How did he lose the 529. It’s a tax advantaged plan for saving for you to go to college. You went to college and had the money, no?

It was never meant as money for him but as money for you.

Maybe you misunderstand this? Anyway inflation is a real thing. Every year the dollar loses value so if you don’t jncest and keep up with inflation uou are losing money.

Just saying. It is scary.

How much did a loaf of bread cost when you were a child? I am older than you probably, but I remember 19 cent white bread.

Can’t buy a cheap loaf of bread for less than 2 dollars now can you? Use a professional money manager and get going.

[Ln]

If you’re afraid of the cyclical gyrations of the stock market (and you should), then it’s important to invest in alternatives like gold and real estate.

Gold in particular has proven resilient if held for at least 10 years.

It never loses value in the long term. Real estate can be rewarding if you can source the right property.

You need a lot of research for Real properties.

[Sandy]

Start by reading the simple path to wealth, then set it up automatically and forget about it.

[Mel]

Read the book called”Beat the Bank” and “Millionaire Teacher”. It may helps with fear but using simple English to understand how and why to invest and how to avoid massive losses and risks like the one your dad did.

[Cory]

The mistake your parents made was having the 529 invested in the wrong things at the wrong time.

Don’t punish your future for the mistakes your parents made.

[Mindi]

How about start by investing 50% of your cash? Once you see it gain value more than your HYSA it may build your confidence to invest the rest, or however much you feel comfortable with investing.

[John]

Well, for starters, it absolutely IS a legal form of gambling. But UNLIKE casinos, the odds are actually in your favor when you bet on American companies.

This has been proven over many decades.

Now, at any particular time, you could lose fast and lose big, for a temporary period of time. It’s happened before, and will happen again.

Thus, the recommendation for DCA entry into the market. Based on losses, your Dad’s investments were too aggressive.

He should have had more conservative investments in something that he knew was needed short-term. Read ‘Simple Path to Wealth’ by Collins.

[Coffey]

I’m 33 and my college fund was also lost in the Great Recession by my parents not understanding time horizons for investing.
You need to look at different goals.

For example, my college fund should have been cashed out so close to going to college and not been in the stock market at that time. 4 years before? Sure that’s fine.

Look at time horizons and set ones you’re comfortable.
For example for long term stuff, I invest. For short term (less than 2 years), I have a HYSA. For medium term, I have bonds & invest.

Run the numbers. You’re losing money sitting on cash. Maybe do some trauma therapy if this continues to block you.

My biggest regret (I had 1-2 jobs once I was 16) was putting my paychecks into CDs in 2009-2011 instead of investing.

I would’ve been way better off now putting it in the S&P 500.

[Ryan]

Depends on your time horizon. There’s almost zero risk of your ability to weather a few rough years and still come out significantly ahead by just investing in the S&P500.

Go with VOO, dollar cost average.

If you don’t need the money until retirement, you’ll be absolutely fine.

Just stick to to strategy and don’t get shaken when there’s turbulence.

[Author]

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