Think You Don't Know Enough About Investing to Get Started? Here's Why You're Wrong

It is often self-doubt that stands between us and the things we want to achieve.

Unless you sat at your grandfather's knee and learned everything there is to know about investing, you might feel a little anxious about getting started. Here's a secret, though: No one knows everything there is to know about investing (or any other subject, for that matter). It's a process. You pick up a bit of information at a time. And how do you do that? You dive in. 

If you don't believe you know enough about investing to get started, I'm here to tell you you're wrong. Here's why:

You probably believe it's more complex than it is

Investing is a learning process, whether you have money on the line or not. You don't have to empty your bank account to begin investing. You just have to be willing to learn how it's done. Here's a secret you may not hear anywhere else: It's not that complex. 

Sure, there are investing strategies that long-time investors use that seem convoluted, but basic investing is quite simple.

The lemonade stand

Imagine that you're a kid. Your friend across the street wants to open a lemonade stand but doesn't have the money they need to buy the supplies. You have a few weeks of allowance saved up and offer to pay for most of the supplies. In return, you get a portion of the profit your friend makes as lemonade is sold. 

While that illustration breaks investing down to its most basic form, real-life investing isn't that different. Let's say you want to buy individual stock. You do some homework, figure out which company looks poised to grow, and purchase as many shares of stock as you can afford. If you're right, and that company earns profits, your stock becomes worth more. That means that if you sell it, you make a profit. 

You may not realize how many learning resources are available

If what stands between you and getting started is the belief that you'll never figure the process out, you're wrong. You can learn to invest. Here's a sample of some of the ways you can become comfortable with investing from the comfort of your home:

Books

Hundreds (if not thousands) of books are aimed at beginning investors. Most will walk you through the process step-by-step. Again, it's because all investors were beginners at one point. 

Online courses

There are some pretty terrific online courses available to beginners. Even if you know nothing about investing, these courses explain the process in such a way that it begins to make sense.

Websites

Websites like The Motley Fool exist to demystify the investing process. Take advantage of them. If you're ever confused by the terms used, the District of Columbia Retirement Board provides an excellent glossary of investment terms. Referring to it as you're introduced to new terms can be helpful. 

Stock simulators

A stock simulator is a great way to learn about investing without spending money. For example, sites like WallStreetSurvivor, ThinkOrSwim, and HowTheMarketWorks offer simulators that allow you to “invest” with pretend money. There's no chance of losing anything, but every chance that you'll grow more sure of how investing works. 

A word of caution: If a book, online course, or website suggests you make a specific investment, do not automatically believe it's the right thing to do. All you're attempting to do at this point is to learn enough to give yourself the confidence you need to get started.  

You don't have to be an expert

Let's say you invest in your company's 401(k) or work with a broker to open a Roth IRA. In either case, professionals manage those accounts. Unless you specifically open a self-managed account, someone on the other end has expertise in growing (and protecting) your money. Even if you think you don't know enough about investing to start, you're paying a management fee for someone else to do the heavy lifting. 

Better yet, there are brokerages that cater to beginning investors. 

Doubt is the enemy     

In unsteady times, it's natural to look for a sure thing. It's normal to develop a case of analysis paralysis. If doubt prevents you from investing, consider this: Sitting on your money may make you feel safe, but due to inflation, it will be worth less in 10 or 20 years than it is today. 

On the other hand, historically, the stock market has gone up more years than it's gone down. One look at the S&P 500 tells the story. In 40 of the last 50 years, the S&P 500 has gained money and generated an average annualized return of 9.4%. 

Of course, that's no guarantee of what will happen in the future, but nothing in life comes with a guarantee.