How To Start Investing In Stocks (Even If You’re Scared To Lose Money)

If you’re reading this, you probably know that its important to invest early to let compound interest work its magic. But you’re apprehensive or fearful, how do you even get started?

What comes to mind when you think of investing in the stock market? Is it fear? Is it excitement? Is it an overwhelming feeling of simply not knowing where to begin?

I understand all of those emotions. I saw them every day as a stockbroker. Being in the stock market can be very emotional – but it doesn’t have to be. I know it can be overwhelming to even start, but it’s important not to let that hold you back from learning how to invest.

There are two important things you should remember when it comes to investing:

  • You must remember your goal or purpose for investing
  • Time is your best friend, but it can also be your worst enemy

Knowing that, if you want to start investing in stocks but don’t know where or how to start here are some tips to point you in the right direction.

Investing in the Stock Market Means Knowing Some Basics

Many of us want to know how to start investing in stocks, but its easy to get overwhelmed.

We often think we need to be experts to start investing but being active in the stock market doesn’t require a special certification. Our eyes glaze over when we hear people talk about investing, as we believe it’s possible for only a select few.

It simply requires a little basic knowledge. That knowledge, in turn, can help mitigate fear of the stock market so you can start investing. Thankfully there are plenty of available resources to help you grow in that basic knowledge, and most of it’s free.

Don’t believe me? Consider what one of the most well-known investors has to say on the matter:

“Warren Buffet has often been quoted saying he doesn’t invest in anything he doesn’t understand. New investors are well served by this advice,” says Matt Cosgriff, CFP® of Lifewise Advisors.

The thoughts by Cosgriff point out on simple fact – a comfort level. You need to be comfortable with the investments you select. Gaining even a small amount of knowledge will breed confidence that will turn into comfort with investing. The rest will take care of itself.

Find Somewhere to Invest

Now that you know the importance of acquiring a certain knowledge level with investing, where do you actually start? There are two main ways to begin investing in the stock market:

Knowing where you can invest is great, but when should you actually start? “It often makes sense to begin as soon as you get your first job. Almost all companies offer some type of retirement plan which serves as a great starting ground for many new investors,” says Cosgriff.

The American Benefits Council backs up Cosgriff’s point in that 80 percent of full-time employees have access to a 401(k) plan.

What can you do if you don’t have access to a 401(k) plan?

What can you do if you don’t have access to a 401(k) plan, your plan does not offer a match or you want to invest more money? The best option is to open an online brokerage account. There are many to choose from though the best ones will offer a variety of educational/training resources to help you get started.

The key to success is overcoming your fear of investing in the stock market. You will see your portfolio go up and down while investing, but you will also gain over the long-term if you’re wise in how you go about it.

“I believe that fear of losing money holds a lot of investors back from starting. However, they shouldn’t be investing in the stock market for money they need in the short-term. Instead, they should use stock market investments for long-term goals like retirement,” says Lance Cothern, personal finance expert at Money Manifesto.

Once you separate that emotion of fear from investing and know where you can invest you can determine when you should start investing.

Realize How Important Time Can Be

We often think it’s the amount we start investing with that counts. It’s not. It’s the time you’re in the stock market that matters.

In fact, the Center for Retirement Research states you must save three times the amount if you wait to invest until 45 instead of starting at 25. There’s one simple reason for that – compound interest. You need to give your money time to make more money.

So, when should you start investing?

Personal finance expert Jon Dulin at Money Smart Guides explains, “Yesterday. Seriously, though, the sooner you start, the sooner your money has a chance to grow. It’s all about time. The more time you have to invest, the greater the sum you will have at the end.”

I know what you may be thinking. “I only have an extra $20 or $50 left over at the end of the month and it’ll do little for me in the stock market.” Don’t give into that lie. If you don’t have enough to open a brokerage account, don’t let that hold you back. “Start putting $20, $50 or $100 a paycheck in a separate bank account until you hit the required minimum, then transfer it to your investment of choice,” says Cothern.

If you go the route of a 401(k) plan, you have little excuse not to start as soon as possible. Don’t put it off; start now.

“Ultimately inertia is the single biggest thing standing in the way of individuals looking to get started investing. They say ‘I’ll sign up next week’ and the next week turns into years and decades. The takeaway is simply to get started from day one,” says Cosgriff. The moral – start investing as soon as you can so time works for you, not against you.


We’ve all heard this phrase – K.I.S.S – or Keep it Simple Stupid. Many like to make investing more difficult than it has to be when you can really do it in a simple fashion. Harkening back to Buffett, he famously promotes a simplistic approach to investing.

I dare say that if it works for Warren Buffett, it is bound to work for the rest of us. This begs the question – how do you simplify investing in the stock market? The pundits and talking heads won’t tell you this, but taking a lazy approach to investing simplifies investing to the level that anyone can do it. There are two main ways to accomplish this simplistic approach to investing:

  • Using low-cost index or target-date funds available through a brokerage like Vanguard.
  • Using a robo-advisor like Betterment or Wealthfront to manage your investing.

In the first instance, low-cost funds through Vanguard give you access to the broad market at a very low cost. This provides instant diversification and allows you to stay with the stock market, not chasing after gains that may not be there. Cothern explains why he took this approach when he started investing: “I opened a Roth IRA with Vanguard and began investing in their target-date Funds.”

If you don’t have enough money to start with Vanguard, Betterment or Wealthfront are great options to consider. They customize a portfolio based on your needs and are also made up of low-cost index funds. Both will manage your portfolio, handling things like asset allocation, rebalancing and tax-loss harvesting, and making sure it’s invested how it should be for a minimal cost.

Betterment has no minimum balance requirement while Wealthfront requires $500 to start. “…robo-advisors are a great place for new investors. They help you to make smart decisions while you get a better understanding of how the market works. You know that the advisor is doing the right thing for you at all times,” says Dulin.

Regardless of which approach you take, you will enjoy a relatively hands-off approach to investing. This allows you more time to educate yourself on investing while following a traditionally prudent approach.

How To Start Investing In Stocks: The Bottom Line

If you’re scared to get started, just picture where you want to be in life. Investing in the stock market will likely play a large role in getting there.

Knowing how to start investing in stocks can be a challenge when you don’t know where to start. Don’t let that hold you back. At its basic level, it isn’t that complicated. Simply get started and the rest will take care of itself.

About the Author

John Schmoll, MBA, is a former stockbroker, mutual fund administrator and veteran of the financial services industry. His interest in investing and passion for financial literacy led him to leave his career with a well-known brokerage house to grow an advertising business with his wife and start a personal finance site, Frugal Rules, in 2012. In addition to running the business with his wife, John also writes for sites like Investopedia, Lending Tree and U.S. News & World Report.

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