Spending your hard earned money wisely is one thing you need to be good at to reach financial independence. What to spend and where to spend are questions we ask ourselves many times during the day. Now if you want to invest your money, it’s the same questions…what to invest and where to invest. Have you started investing? Are you afraid to invest? Are you cautious of getting burnt from investing or have already been burnt from investing? Getting burnt from investing can leave scars and enough fear from investing again.  

When you spend your money, at least you’ll be getting some service or product that’s tangible. With investing, it could be a little harder to see where your money goes. Meaning it may not be as tangible and it is harder to see where your money has gone. If your investment happens to go down in value or even crash, then the loss has a bigger effect. It’s like you’re putting your money into some investment and watching your money disappear. If you invested money during the Dot Com Bubble, the 2008 Financial Crisis, Great Recession, or the Covid-19 Market Crash you probably experienced some high anxiety watching your investment tumble.  

I’ve read many stories about people who saw their investments tumble and pull whatever remaining money they had out of it. You could say it is a cause and effect reaction. The problem with this reaction is that it becomes an emotional decision to withdraw your money. It’s ok to have emotions but is pulling out of your investment the right decision?  

If history has taught us anything it’s that the US markets bounces back every time there’s a downturn. This is where people start to get scars because they pulled back their money out to reduce losing more value not realizing that the economy will soon bounce back. After some time, the market returns back to a normal state and now you’re left with a net loss because you were too afraid to get back into investing. Now you feel burnt and don’t want to invest anymore.  

All the crashes I listed above I lived through. I watched my investment portfolio deteriorate in value. I also watched my investment portfolio bounce back everytime. I was not one of those who pulled back my money rather I put my faith into the US market knowing that, based on history, it will recover.  

Investing is not easy. It’s your hard earned money that you are putting somewhere else hoping its value appreciates. So there is an emotional attachment. No one wants to get burnt twice so if you’ve been burned once, you’ll do what’s necessary to prevent getting burnt like not putting your money into good investments.  

Like I said I’ve been through four economic downturns so what how did I cope watching my investments be cut in half? Here’s who I pushed through 

• The US economy always bounces back. With this in mind, it’s a matter of time and waiting for the recovery to start 
• Be patient. Recovery takes time.  
• Don’t pull your money out. You may want to reallocate where your money gets invested but pulling out may mean you might miss the upturn 
• Continue to put more money into your investments if you’re able to. Buying low is always a good thing.  
• It’s temporary. Downturns are temporary. Look forward to the upturn. 
• Keep your emotions under control. You’re emotionally attached to your money. Don’t let that cloud decision making. 

Getting burnt from investing can feel like a stab in the back and leave huge scars. This doesn’t have to be your situation. As history has taught us, every downturn stock market has rebounded every single time which means that getting burnt can be prevented. Do your due diligence by evaluating and assessing your financial portfolio and don’t let emotions take control of your financial decisions. I’ve lived through 3 financial crises and all 3 times the economy bounced back. If you are interested in following my journey, email subscribe here to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.