It’s Time to Unlearn Your Investment Fears

Growing up with their parents’ scary tales of Depression hardship, the generation now approaching retirement age grew up to be wary of investing and owning debts. This means missing out on returns and losing the value of savings to inflation.

The squirrels brought this lesson home for me. Like many others in suburbia, my wife and I had a squirrel problem. We tried various things to keep the creatures out of our garbage cans, with no success. They ate through the covers. Even after we built a wooden shed to house the garbage cans, they got in there, as well.

Then we escalated our confrontation. We took a tip from the Internet and buried a battery-operated instrument into the ground near the garbage cans. The instrument makes an intermittent sound like that of a rattlesnake. The solution worked incredibly well. No bushy-tailed scavengers tried to get into our trash.

The batteries died out on this rattle-maker several months later. We never replaced them. However, to our amazement, the cans continue to be free of invading animals, years after the device stopped working. Our guess is the squirrels passed down the knowledge to stay away from these particular containers.

Humans function in a similar manner. We learn lessons of potential danger in our youth. Like the fake rattlesnake sounds, these memories still generate fear even though the threat is no longer there.

One example is people become fixated on eliminating their mortgage payments as soon as possible, even though they have is an incredibly low interest rate loan. Why? Because they remember all too well the warning of their parents, who were familiar with the Great Depression of 1929 and its aftermath, when many Main Street banks reacted with a massive foreclosure surge, far worse than the housing-led financial crisis that began in 2007.

Another thing this generation learned to fear is the stock market. They grew up in households speaking about how they should avoid the stock market as the scourge of human existence. The question around the kitchen table was not if the next Great Depression and stock market crash would occur, only when.

What childhood fears still mislead your investing decisions? If you do not appreciate that things may have changed through time, if you only focus on an imaginary rattlesnake, you may lose sight of the opportunities that help you reach your financial goals.

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Dan Crimmins is the co-founder of Crimmins Wealth Management LLC in Woodcliff Lake, N.J. His blog is Roots of Wealth.

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