S3E114: How to Overcome the Fear of Losing Money When Investing

The fear of losing money when investing is one of the biggest barriers that keeps people from ever getting started. But avoiding investment risk entirely has a cost, too: inflation continues, time passes, and opportunities don't wait.

In this episode of Rich Dad Stockcast, host Del Denney sits down with Rich Dad investing expert Andy Tanner to answer a question many new investors struggle with: How do you invest when you're afraid of losing money?

Andy begins with the psychology behind fear. He explains why the human brain naturally reacts more strongly to threats and potential losses than to possible rewards. That protective response can help us survive real danger, but in investing it can also make uncertainty feel more dangerous than it actually is.

The solution isn't simply telling yourself not to be afraid.

Andy argues that investors reduce fear by reducing the unknown.

His first recommendation is practice. Before risking real capital, investors can use paper trading to experience how investing works, make decisions, watch outcomes, and learn without putting money at risk. That experience can turn something unfamiliar into something increasingly understandable.

The second strategy is position sizing. Instead of putting a large amount of money into a first investment, Andy recommends starting extremely small. A small position allows you to experience a real investment while limiting the amount you can lose. The purpose of that early investment isn't necessarily to make significant money—it's to build experience and learn how you respond when real money is involved.

Andy also makes an important distinction between the fear of loss and the fear of failure. Investors may believe they're afraid of losing a small amount of money when what they're really protecting themselves from is disappointment—the emotional pain of believing they could succeed financially and then discovering they were wrong.

Then Andy introduces what he considers one of the most powerful ways to overcome investing fear: stop trying to do everything alone.

In this episode, you'll learn:
-Why investors are naturally afraid of losing money
-Why avoiding investing also carries financial risks
-How financial education can reduce uncertainty
-Why paper trading can help beginners gain experience
-How smaller position sizes can make investing less intimidating
-The difference between fear of losing money and fear of failure
-Why experienced investors focus on managing risk rather than eliminating it
-How mentorship can increase confidence
-Why having a plan for different market outcomes matters
-How to start investing without risking more than you're prepared to lose

Andy also explains why a good investment plan should account for multiple outcomes before money goes into the market. If an investor understands what they will do when an investment rises, falls, or moves sideways, uncertainty becomes more manageable because the decision-making framework already exists.

The goal isn't to become fearless.

Successful investors still recognize risk. They simply learn how to identify it, measure it, manage it, and make intelligent decisions despite it. That's the role financial education plays: transforming investing from something that feels like gambling into a process where the risks are understood and managed.

🎯 Visit https://bit.ly/3JsRdmj for access to FREE investing tools, including Andy's "Power of 6" ebook.

00:00 Fear of Losing Money
00:56 Andy's Bold Promise
02:43 Why Loss Hurts More
10:08 From Wonk to Action
10:26 Start Small and Paper Trade
18:10 Break and Resources
19:08 The Real Fear Killer
23:30 Mentors Over Deals
28:36 Risk Plans and Checklists
30:42 How to Find a Mentor
32:57 Final Takeaways and CTA

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