How I conquered my fear of money, learned about risk, and started saving to retire early

I’m Only Risky with my Money

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One thing that really bothers me about intro to investing advice is the use of the word risk. It instilled fear in me when I first started thinking about investing. Unfortunately, I didn’t know where to turn to help get me more comfortable with that risk. So I spent my first investing years buying CDs (and no not this one).

Fortunately, my big low risk mistake didn’t continue for too many years, and eventually I overcame some of my fears, learned about investing, and started getting “risky” with my money.

The Start of Our Money Journey

Plants start out small, much like my knowledge of money
Plants start out small, much like my knowledge of money

The way that people talk about money leads the average investor to frequently make poor investing choices. I’m a fairly very risk adverse person, so when I was looking to start a Roth IRA at the age of 22 I scoured the internet and determined that a bank CD would serve risk adverse Mrs. Kiwi best.

Beakes, I missed out on earning a lot of money in the post-recession stock market surge, and I could call this my biggest financial mistake. But, while I’d never jump out of an airplane and going scuba diving sounds like a death wish, I’ve come to realize that the definition for risk when it comes to money is much different.

I didn’t grow up in a house where my parents were boring me with investing conversations. I didn’t take any personal finance classes in college. So, as a young adult, I started with little financial literacy and a net worth of -$50,000 (and student loans still in deferment). Fortunately, I at least knew not to carry a credit card balance. And, I knew I wanted to start investing before paying off all of our student loan debt.

And that’s where Mr. Kiwi’s and my joint money journey began. Our home was making $32,000 each year with a negative net worth. We all start somewhere.

The Jargon Confusing Language of the Gatekeepers

Money, much like sports, is only as complicated as you want to make it. You can spend every waking hour learning team stats, watching game tape and being the expert, or you can go outside and shoot some hoops. With money, you could watch cable news, turn on stock market alerts on your phone, day trade stocks – or you can set up your investments and then ignore them. Guess who typically earns better market returns? The people who died or forgot they had the accounts! Learning about money is complicated

While diving into a full understanding of the IRS code is complicated, what the average person needs to understand is not. And when I have conversations with my friends about money I frequently see looks of confusion on their faces.

So today, I want to talk about my investing story, and help open the gates, so more of you can walk through them, educate yourselves, and invest confidently. I am not a financial professional, so please talk to a financial professional and don’t take this as investing advice. Think of this as a basic money conversation with a friend over tea.

And there are a bunch of bloggers talking about money. Check out the Rockstar Finance feeds to find the people that speak your language and can help make money fun.

Where do I keep my Money?

There are many places where you can keep your money:

Risk and money vs risk and real life are totally different things
A million money options, like planning out a complicated board game
  •       Under your mattress (while it’s good to have a small stash of cash on hand, this is clearly a poor choice for where to store most of your money, proof: home alone movies – thieves exist, second proof: inflation (money becomes less valuable over time))
  •       Banks
  •       Brokerages (Fidelity, Vanguard, Schwaub, etc.)
  •       Company sponsored programs
  •       Real Estate
  •       Private Businesses
  •       Government Bonds

And I’m sure there are more, but those are some popular ones.

Money can be kept at all of those places in many forms:

  •       Cash
  •       Bonds
  •       Stocks
  •       ETFs
  •       Certificate of Deposits (CDs)
  •       Annuities (less in vogue option currently)
  •       Physical Assets (i.e. house or business)

Then there’s different apps and spending tracking software out there. You don’t have to use them all, I use Personal Capital (see my review here).

Cash, bonds, and stocks are frequently compared and their relative “risk” is discussed:

Risk and Money cash bonds stock, money 101

Cash or low interest bonds are frequently described as the “least risky.” Their value doesn’t fluctuate crazily if you live in a stable economy, like that in the US.

And, of course, I didn’t want to lose my hard earned money, so I wasn’t going to jump to any risk that wasn’t needed when I started investing. But, silly me, I didn’t realize that young Mrs. Kiwi was going to continue to make money for the next few years, so that risk isn’t as risky. Risk and money vs risk and real life are totally different things

What was I so scared of risk? Maybe it’s the timing of graduating during the recession that shaped the fear inspired language that I came across when researching investing. Maybe now that we’ve been on a stock market surge, the general advice is different. But future Mrs. Kiwi lost out on a few years of market growth, until I finally had the infamous conversation. The conversation that got us going down the path towards financial independence.

The conversation that showed me the Simple Path to Wealth, which was just the Stock Series back then.

And I finally committed to getting risky with my money.

  •       Why does the financial services industry have to use fear to guide investors?
  •       Why all the technical language that few understand and make taking that first step so much harder?

So, as my Roth CDs matured I rolled them over to low fee index funds, and kept them as Roth IRAs, so their tax status didn’t change. I started looking at the fees for my company 401k options, and I started contributing more of my money to pre-tax accounts.

Since we are DINKs, there’s definitely the potential for us to fall into a moderately high tax bracket, but by taking advantage of our 401ks, 457s, and IRAs we are keeping more of our money we are earning now to grow pre-tax.

Embracing My Failures

My tentative jump into investing, while certainly not optimal, wasn’t the worst path.

Risk and money vs risk and real life are totally different things
The first year of gardening was full of failures

I saved a lot less of my money than I could have since I just didn’t understand how to invest. Not only did I pay more in taxes, I also just bought more stuff. I wasn’t confident that saving my money was going to benefit me in the long run, so I spent my money to enjoy today.

I’m so grateful I took that step, read a few blogs, and got pointed to low fee index funds by my mid-twenties. Fortunately, I was only making “low risk” decisions with a few thousand dollars.

From talking to family and friends more openly about money, I’ve realized that my path is pretty common.

Personal Finance is Personal

Risk and money is tough to conquer, but aligning your money risk with your personal risk isn't always the best idea
No one size fits all solution

We all make money mistakes (seriously, check out this group of bloggers fessing up to their mistakes!), and have to sift through all the bad advice out there. Personal finance is personal, so what others recommend may not be the best thing for you.

I like to DIY, so I manage my own money, but it took a lot of learning and reading to get to a place where I’m comfortable with our family plan. We track our spending every month and instead of budgeting we spend money on our values.

Mr. Kiwi has no interest in anything financial, but he learned too, since it is our money. I handle all the regular tasks, but he knows the basics and could handle investing if he ever needed to.

So, try to sift through the scary language and words, and educate yourselves. Nobody will care more about your money than you!

How’d your money journey start? Where are you on your investing or debt payoff journey? What’s your favorite resource for all things money?


16 comments on “I’m Only Risky with my Money”

  1. Reply

    ” You can spend every waking hour learning team stats, watching game tape and being the expert, or you can go outside and shoot some hoops”

    What a great line! You make a great point, you got to just get in the game. In my case, a subscription to Money Magazine over 20 years ago was all I really needed to get started. Some rudimentary reading, the basics, and then I was even keen enough after about 6 or 7 issues to tell when they were trying to sell me something versus give me good basic advice. After that it was just a matter of being in the game.

    1. Reply


  2. Reply

    To put it basketball terms, I was on the bench for a long time. I was watching money shows, reading WSJ but didn’t have skin in the game outside of my work 401K which I really didn’t pay attention at the time. I did invest in mutual funds because I got convinced by a rep. at my bank do it . I had it for a few years but cashed it out because of the high fees and used it to pay off my student loans.
    Right after I cashed out, I took the time to really understand about investing. I took a class on it, read a few books and blogs. I finally opened one with WealthFront a few years ago that had low fees and ETFs. Its performing really well and now have another investment account with Vanguard.
    From this experience, I think that educating yourself into something that you want to get into really helps and won’t be that fearful because you now have good understanding of it

    1. Reply

      Learning the basics is so important to build your confidence investing!

  3. I made the same mistake you did with going for “low risk” investments, PLUS had a high fee advisor handling my funds.

    1. Reply

      Our 401ks were full of mutual funds. I know we picked some crazy high feed funds to begin with, but in time we learned!

  4. Reply

    I can relate to this post. I should have started earlier. I should have invested more. Now at 50 years old I am comfortable with how much I am investing and where I am putting it!

    1. Reply

      That’s great, thanks for sharing. It’s so nice to get to a place where you are comfortable!

  5. Risk is crucial. It is important to take risk in business or investing, or else nothing would happen. You wouldn’t earn money from financial markets which work on risk and you wouldn’t become a business owner. It is important to review the risks you are taking, look at them on balance – risk vs reward, and make smart decisions. But don’t try to eliminate risks because you then eliminate rewards.

    1. Reply

      Yes! Don’t eliminate risks to just eliminate rewards!

  6. Reply

    I loved low risk investments too. Until I knew better.

    1. Reply

      So true!

  7. Reply

    One thing to consider is how much time you have. Yes stock is riskier than bond in the short run, but if you aren’t retiring for another 20, 30, or 40 years, time is an allie you can utilize to your benefit.

    1. Reply

      Yep, most of the money we have invested won’t be touched for many more years. Thanks for saying that so succinctly!

  8. I wish I had been more risky with my money early on. I had no clue though and by the time I started learning as much as I could about personal finance it was the recession and we were digging ourselves out of a hole so investments were not on our radar. I am still waiting to cash out two small cds I got for my daughter many years ago that I have to go to the bank in person during a narrow time frame to cash out. I never remember though and they just get reinvested at a super low interest rate :(. I know better now though!

  9. Isn’t it a shame that financial literacy isn’t taught in many high schools?

    I’m pretty risk adverse, but thankfully got involved in the stock market via my 401k early in my career 10 years ago. I was buying stocks at 1/4 of what they are worth now. The risk was definitely worth it!

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