Updated: May 18, 2024
Nobody wants to lose money, and when it comes to investing, this is a possibility. Unfortunately, this fact has turned many people off and made them choose not to invest at all.
I used to be like that, too. I was a strong believer that when it comes to my hard-earned money, “It’s better to be safe than sorry.”
That was until I learned all about inflation and realized that if I do not invest, then I’m setting myself up to be both safe AND sorry.
Safe AND Sorry
Price hikes occur year after year, and no amount of protests, rallies, or government legislation can stop them.
Sure, those efforts can delay the process, but they can never prevent what’s inevitable. Prices of goods will go up, whether you like it or not.
I’ve been buying the same type of rice from the same rice vendor for many years. According to my expense records, a kilo of rice back in 2009 cost P35.00. Now assume that today is 2014, and rice today costs P45.00 per kilo.
If I had P350 five years ago, I could have bought myself 10 kilos of rice. But if I had simply put that money in a savings account, I’d have around P370 today.
Did I earn P20 from interest? Yes.
Was putting my money in the savings account a safe decision? Yes.
But can I still buy 10 kilos of rice with that P370? No, not anymore.
Overcome your fear:
Your money may be safe in a savings account, but its value or purchasing power will decrease over time.
If you’re afraid of losing money in investments, realize that you are technically also losing money by not investing.
Money Is Just Money
Several weeks ago, a friend lost his wallet to a pickpocket while riding the MRT.
When I met him a couple of days later, he said that he had around P4,000 in it. Surprisingly, losing the money was NOT the most painful part of the experience.
He says it’s losing the wallet, which his father had given to him before his death.
“I can work and earn back that P4,000 – but that wallet can never be replaced.”
People fear (and hate) losing money. But at the end of the day, considering all things, money is just money. And more importantly, it can be earned back.
Your dreams and goals in life are things that cannot be easily replaced. So, you better make sure that you don’t lose them by failing to plan for your future today.
Overcome your fear:
Make it a habit to save money regularly. Your goal is to save at least six month’s worth of your expenses.
Doing so will create your emergency fund. Successfully achieving this goal will also serve as motivation that even if you lose money in an investment, you can always earn it back.
Let that emergency fund remind you that you have great money-saving skills. And fortunately, those are the very same skills anyone will ever need to create an investment fund.
The Big Picture
I fell in love with reading when I was in college. My dorm roommate at that time was a bookworm, and I believe I developed the habit from him.
However, I avoided buying books back then. I borrowed from him and other dormers because I was afraid that I might pick up and waste my money on a bad novel.
After graduation, borrowing books from my former dorm mates became inconvenient. Thus, I had no choice but to start my own collection.
One lesson I immediately learned is that just because a book is a bestseller doesn’t mean that I will like it. In fact, there were several novels that I hated and even regret buying.
On the other hand, there were obscure novels I bought simply out of curiosity. A good number of these books ended up being a great read for me.
Looking at the big picture, I now realize that my novel-picking skills will never be perfect. In fact, I still get to buy crappy novels today.
However, with each good book I discover, I can fine-tune my instincts and make better purchases later on.
But more importantly, I discovered that choosing those bad ones was not a total waste of money. Because, at best, reading them has helped me expand my vocabulary.
Overcome your fear:
There’s no perfect formula for choosing the best and most profitable investments. And there will be times that you’ll make a bad decision and lose money.
But you have to look at the big picture. For each investment decision you make, the good ones will fine-tune your skills, while the bad ones will, at best, help you expand your understanding of investments.
Lastly, the good news is that when you make it a habit to invest regularly, you will eventually end up with more winners than losers.
That’s it! I sincerely hope that this article has given you helpful tips on how to overcome your fear of losing money when it comes to investing.
And if you have friends who are afraid to invest, make sure that you share this with them.
What to do next: Click here to start your financial journey with IMG Wealth Academy
This is really a great motivation for investment-minded person Sir… nice one!
Keep it up!
Sis Fitz, All I can say is thank you…I’ve learned a lot from your blogs.More power and God bless..
Very well said sir Fitz,thank you and more power.
GOD BLESS.
Thank you so much for this!!! You are the best!!
Hello sir. I recently graduated from college and I start med school this June. You could say I will still be a dependent of my parents for a little over 4-5 years. My plan is after I gradute from med school (4-5 yrs from now) is to build an apartment so I could have an extra outlet of income and be more independent (ang corny pero totoo po nahihiya na po ako sa magulang ko ang tagal ko mag aaral mehehe). I have roughly around 70k in my bank (ipon ko po ito simula bata & hindi ko po ito ginagalaw) ,so my question is: where is best place for me to invest? In UITF or in stock market? Thank you so much sir.
Hi Rica, you can invest your money in a moderate-risk fund like a Balanced Fund, and in blue-chip stocks (companies that are in the Ph Index). You can choose one, or choose to divide your money among them.
Also, the money you’ll get will not be enough to build an apartment, so I think you would have to possibly take out a bank loan. So make sure that you create good and stable sources of income until that time, so you’ll have money to pay and see the mortgage through.
This is a very good plan, but it needs your commitment and focus.
Will keep that in mind, sir. I appreciate your reply so muchl thank you :)
Hi Fritz, I appreciate your articles very much as it really helps me whenever I’m honestly trying to convince my mother to invest. Currently, I had already manage to convince my mother to agree on two investments that I proposed and I have another investment proposal coming up. Thanks very much!
Thank you Sir Fitz! I always tell my friends who are too afraid to invest about the purchasing power of their money in their savings account. More power to you!
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Another superior article Fitz!!! Fiat currencies are simply paper and only have value because of a central bank promise. They were designed to lose value so governments worldwide could escape their debt. Use your paper money for a convenient medium of exchange but understand that it is NOT an appreciating asset. To beat inflation you must do one or more of the following. Preferably, have several streams of income all beating inflation.
#1 Invest in stocks and ETFs that through off inflation beating income.
#2 Own a bushiness that generates enough income to cover expenses and still beat future inflation with the surplus.
#3 Put money in alternative, inflation beating investments. Example, buy property in areas that will be the next real estate hot-spot. Purchase assets proven to hold and hopefully increase in value at a rate beating inflation over time. If you are good with art or collectibles, that could be the vehicle of choice.
Whatever you do, conquer your fear as this article suggests or you will be losing over time.