Why Scared Money Don’t Make Money in the Markets

    When it comes to making money in the markets, scared money don’t make money. This is a popular saying on Wall Street that reminds investors that to make profits, they need to be willing to take risks. If you are afraid to lose money, then you will never make any profits. 

    In this article, we will discuss the importance of risk-taking and how it can lead to financial success. We will also explore why scared money don’t make money and offer some advice on how you can overcome your fear of losing and start making money! 

    What is the meaning of scared money? 

    The term “scared money” is used to describe money that is invested in the markets out of fear. This fear can come from a variety of sources, including the fear of losing money, the fear of not making enough money, or the fear of missing out on a good investment. When investors are driven by fear, they are more likely to make decisions that are not in their best interests. This can lead to them making poor investment choices, selling investments too early, or holding onto investments for too long. 

    Who coined the term scared money don’t make money? 

    The origins of the phrase “scared money don’t make money” are unclear, but there are many different versions of this phrase. 

    One example is: “Don’t let the fear of losing be greater than the excitement of winning.” – Robert Kiyosaki. 

    Likely, the phrase was first used in the context of gambling, as it is often used today. It was a common saying among poker players at the table that was then popularized by Billy Napier. 

    This is because when people are afraid of losing money, they are less likely to take risks. And when people are less likely to take risks, they are less likely to win money. 

    This term applies to stock market investing because there are still risks involved even though it is not gambling. When people are afraid of losing money, they are less likely to invest in stocks. And when people don’t invest in stocks, they are less likely to make money. 

    What does Scared money Don’t Make money mean? 

    The phrase “scared money don’t make money” is often used to encourage people to take risks. Its meaning can be interpreted in a few different ways. A common interpretation is that to make money, you have to be willing to lose some. 

    This is because no investment is guaranteed, and there is always a chance that you could lose money. Another interpretation is that if you are afraid to take risks, then you will never make any investments. 

    This means that you won’t make any money and the value of the capital will degrade over time due to inflation. The phrase can also be interpreted to mean that investing in a trendy stock because of a fear of missing out, is a risky move. 

    It is often better to invest in a stock that has been around for a while and has proven to be stable, rather than a stock that is new and may not be around for long. No matter how you interpret the phrase, the meaning is clear: if you want to make money, you need to be willing to conquer your fears with money. 

    Importance of taking risks to make money 

    Every financial decision you make will come with some sort of risk. Even leaving your money in the bank is a risk, as there is always the potential for inflation to eat away at your savings. 

    Unless you take risks you will not be able to build wealth. Nobody has ever heard of the millionaire that built his wealth by buying treasuries or through his savings account.

    Additionally, if you store your money under a mattress or in a safe at your house, there is always the risk of theft. The key is to find an acceptable level of risk that you are comfortable with and make sure that your financial decisions fall within that risk tolerance

    If you are too afraid of risks, you may miss out on opportunities to make money. However, if you are willing to take risks, you could potentially make a lot of money. It’s as simple as that. 

    There is always a risk involved when investing and it is necessary to make money as a stock market investor. And, as the saying goes, “scared money don’t make money.” So if you’re ever feeling scared about investing, remember that you can’t compound your wealth if you are too afraid to ever invest. 

    Embracing risk

    For some people, the stock market is too risky. They believe that they can lose all of their money. A single investment turns out to be a wrong move or they never end up investing at all. It is true that stocks can be volatile and risky, but this mind frame can be very limit your ability to create wealth.

    This type of thinking is what we call “scared money.” To accept risks, you have first to understand that there is always a potential for loss when you invest. You can never predict the future, so there will always be some uncertainty. 

    But if you’re comfortable with that uncertainty, then you can start to take on more risk. One way to do this is by investing in a diversified portfolio of stocks and bonds. 

    This way, you can minimize your losses if one particular investment doesn’t perform well. Investing in ETFs and starting with a small amount can also help new investors get comfortable with the idea of investing. 

    An index such as the S&P 500 can help passive investors gain market exposure without having to experience a significant loss. Another way to take on more risk is by dollar-cost averaging frequently

    This means investing a fixed sum of money into security at regular intervals. By buying shares over time, you can smooth out the effects of market volatility and minimize your losses. 

    Using dollar-cost averaging to your advantage

    Dollar-cost averaging is a great way to get started in the stock market. It allows you to take on more risks without having to put all of your eggs in one basket. Once you are comfortable, you can begin researching blue-ship companies. 

    These companies are well-established and are less likely to cause fear through volatility. Remember that accepting some level of risk is a part of investing. However, there are ways to lower your fear through intelligent investing strategies. 

    If you’ve done your research and aren’t taking significant leveraged positions on volatile stocks, you have a lot less to fear. Of course, you don’t have to take on extra risk if you’re not comfortable with it. But if you’re looking to grow your money, accepting some risk is necessary. So what do you think? Are you ready to start taking on more risks?

    Image source: Barrons

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