The swimming pool is a great place to learn about life and love when you’re a kid. Come on admit it–you had a crush on the *lifeguard too.
Learning how to swim took practice, hours at the pool, and the guts to jump in and try. You might have been a natural swimmer or maybe you had to work at it.
Investing holds many similarities to swimming. Let’s dive in together…one…two…three…jump!
Learning how to swim is like learning how to invest.
1.Take Deep Breaths This is the first rule. Don’t breath the water–you don’t have gills. You’ll need a lot of oxygen in your lungs for swimming. Investing is for the long haul (5 years or greater). Take deep breaths and prepare for long seasons of swimming.
2. The water is cold at first- If you just stick your toe in the water, that water is freezing. It’s not until you put your head underwater does the water finally feel normal. Investing seems odd, weird, even scary–until you finally commit and begin investing does it seem normal.
3. Kickboards and Practice- I remember using kickboards as I learned how to swim and even later to get my legs stronger. Investing takes practice and maybe even a few tools (dollar cost averaging) to help your investments become stronger.
4. Don’t forget the floaties (water wings)– As you begin to swim, water wings keep your head above water. Index funds are the water wings of investing and you’ll find that they work well even after you learn to swim. Sometimes simple is best.
5. Find an instructor you can trust– You might not want to learn how to swim from your crazy uncle Louie who hasn’t swam in 15 years. Don’t listen to you uncle’s investment advice either, unless he’s a millionaire. Find a teacher and advisor you can trust to learn about investing. (How to find an investment professional)
6. Get over your fear and jump in– Jumping in the water takes guts and faith in your swimming ability and the fact that you’ll float. You’ll need to get over your fear of investing and begin or rejoin the pool party.
There aren’t many other ways besides maybe real estate to prepare for retirement and your children’s college beyond being involved in the stock market. Take the plunge!
8. Invite Your Friends- Swimming is best done with friends. It’s hard to have a water fight with yourself! Ask your friends about investing, start an investing club, and include others in your investment decisions.
9. Bring Money for the Snack Bar- Swimming makes for a hungry tummy. Don’t forget to bring money to the pool for snacks, but only money that you can afford to loose. I think I always spent any money I took to the pool. Whatever money you invest, be prepared to loose it all.–it’s not likely this will happen, but don’t invest money you’ll need for your rent next month.
10. The cool kids jump off the high dive- Diving off the high dive takes practice and a lot of guts. There is a lot of prestige and also a chance you’ll hurt yourself. Investing in complex instruments and advanced trading practices also have a high risk/reward factor. Many times they are just not worth the risk.
11. Swimming is Fun– Don’t forget the purpose of swimming is fun! If you’re not having fun investing and having trouble sleeping at night, then you’re doing it wrong. Investing should be fun or at least tolerable. Get help if your investment plan is causing you angst or sleepless nights.
12. Everyone Swims Differently- I swam a lot as a kid and was even on the swim team for a few years (backstroke was my style), but investing wasn’t as natural for me. I had to learn and continue to learn how to invest wisely and find which investing style (stroke) is best for me. Find what investments work best for you and stick to regular investing.
*For the record I married a hot lifeguard.
Are you ready to join the pool party and begin investing? What keeps you from investing or helps to keep you in the investing market?
Photo Credit lizbadley (Creative Commons)