Afraid to Start Investing? The Financial Basics That Can Help You Begin

For many people, money feels intimidating long before they ever open an investment account.

There are unfamiliar terms. Fear of losing what you’ve worked for. Memories of financial hardship. And a lingering sense that everyone else somehow understands a language you were never taught.

Financial expert and bestselling author Nicole Lapin argues that this last point may be closer to the truth than many people realize.

Money is a language.

And not knowing the language doesn’t mean you’re bad with money. It means you haven’t learned it yet.

In a Heal Squad conversation about financial health, Lapin breaks down some of the fundamentals of investing, compound growth, debt, emergency savings and financial advice—and explains why your history with money can influence the decisions you make today.

Financial Literacy Is a Form of Self-Care

Most people wouldn’t expect themselves to understand a medical diagnosis without learning what the terminology means.

Yet when it comes to money, we’re often embarrassed by what we don’t know.

Lapin says she didn’t grow up discussing stocks, bonds or mutual funds. As a first-generation American, her family primarily used cash.

Her financial education came later—and not without mistakes.

She accumulated credit card debt. She was initially intimidated by investing. And when she first entered business journalism, she admits she knew very little about the financial world she was covering.

What she eventually realized was that finance wasn’t necessarily too complicated for her.

She simply didn’t speak the language yet.

You Can Forgive Yourself for What You Didn’t Know

Financial mistakes can carry tremendous shame.

I should have started investing earlier.

I shouldn’t have accumulated that debt.

I should have saved more.

I should have understood this.

Lapin’s approach combines self-forgiveness with accountability.

Forgive the earlier version of yourself for what you didn’t know, she suggests. But once you have better information, use it.

That distinction matters.

Your previous financial decisions may explain where you are.

They don’t have to determine what you do next.

Before You Invest, Look at Your Entire Financial Picture

If someone has $1,000 available, should they immediately invest it?

Not necessarily.

Lapin stresses that the answer depends on the person’s overall finances.

For example, if you’re carrying high-interest credit card debt, she suggests that paying down that debt may make more sense than investing the money.

Why?

Because the interest you’re paying on the debt may significantly exceed what you could reasonably expect to earn from an investment.

The same principle applies to emergency savings.

Before putting money somewhere you can’t easily access, consider whether you have enough liquid savings available if something unexpected happens.

Lapin suggests an emergency fund covering roughly three to six months of essential expenses.

Not luxuries.

The basic amount required to keep your life functioning if you lose your job, become sick or experience another financial disruption.

Why Leaving All Your Money in Cash Has a Cost

Keeping money in a bank account can feel safe because the number doesn’t fluctuate.

If you deposit $100, you can still see $100.

But Lapin points out that there’s another factor to consider:

inflation.

If prices rise while your savings earn very little interest, that $100 gradually buys less.

The balance may look the same.

Its purchasing power isn’t.

This doesn’t mean you shouldn’t keep cash available. Emergency savings, short-term expenses and money you’ll need soon serve an important purpose.

The point is understanding that holding money and growing money are two different financial goals.

What Is Compound Interest?

Compound growth is one of the central concepts Lapin wants people to understand.

Suppose an investment earns a return.

You now have your original money plus the return.

If that money remains invested, future returns can potentially be earned on the larger amount.

Then the process repeats.

Your money isn’t simply earning money.

The money it earned can begin earning money too.

That is why time can be so powerful in investing.

The longer compounding has an opportunity to work, the greater its potential effect.

Starting Earlier Can Matter More Than Starting Bigger

People often assume investing is something they’ll begin when they have “real money.”

Lapin argues that this can overlook one of your most valuable assets:

time.

A relatively modest amount invested consistently over decades has much longer to potentially compound than a larger amount started much later.

That doesn’t mean someone who is 40, 50 or 60 has missed the opportunity.

As Lapin puts it:

You’re never as young as you are today.

The useful question isn’t Why didn’t I start sooner?

It’s:

What can I start doing now?

What Are Stocks, Bonds and Index Funds?

Financial terminology can make relatively straightforward concepts sound inaccessible.

At a basic level, Lapin explains several common investment categories.

Stocks represent ownership in individual companies.

Bonds generally involve lending money to a government, municipality or corporation in exchange for interest.

Index funds are designed to track a particular market index, providing exposure to many investments rather than requiring you to choose each company individually.

The S&P 500, for example, is an index containing hundreds of large U.S. companies.

An investment fund tracking that index allows someone to gain exposure to that broader group rather than relying on the performance of one individual company.

Why Diversification Matters

Imagine putting a large portion of your savings into one company.

If that company performs exceptionally well, you benefit.

If it performs poorly, you’re highly exposed to that one result.

A diversified investment spreads that exposure.

That’s part of the appeal of broad index funds discussed in the conversation.

Instead of trying to predict which individual company will be tomorrow’s winner, an investor can potentially participate in the performance of a much broader section of the market.

Diversification doesn’t eliminate investment risk.

Markets can still decline.

But it reduces dependence on the fortunes of a single investment.

Investing Can Be Emotional

Knowing what to do mathematically doesn’t mean it will feel easy when markets fall.

Menounos describes becoming deeply uncomfortable during the pandemic and eventually taking money out of the market because she feared losing what she had worked so hard to build.

That illustrates something important:

Investment decisions aren’t made by spreadsheets. They’re made by human beings.

Fear matters.

Past experiences matter.

Family responsibilities matter.

And watching the value of your investments fall can feel very different from discussing market volatility theoretically.

That’s one reason Lapin encourages people to recognize the emotional side of their financial decisions rather than pretending it doesn’t exist.

You May Have Financial Trauma Without Calling It That

Lapin describes difficult experiences with money from childhood, including foreclosure, financial scarcity and learning to conserve household resources because money was tight.

Menounos similarly describes growing up hearing repeatedly that her family didn’t have money and watching financial stress create conflict.

Those experiences can stay with people long after their circumstances change.

Someone who grew up without enough money may become extremely reluctant to spend it.

Someone who watched investments disappear may avoid investing.

Someone raised around debt may repeat those patterns—or become intensely afraid of borrowing.

Lapin describes these experiences as forms of financial trauma.

Recognizing the pattern can help explain why a financial decision that looks perfectly logical on paper may feel terrifying in real life.

What Is Dollar-Cost Averaging?

Trying to determine the perfect day to invest can create another source of anxiety.

Is the market too high?

Should I wait?

What if it falls tomorrow?

What if I miss an opportunity?

Lapin discusses an approach known as dollar-cost averaging.

Instead of investing all your money based on what you think the market will do today, you invest a predetermined amount at regular intervals.

For example, someone might invest a set amount every month.

Sometimes prices will be higher.

Sometimes they’ll be lower.

The strategy reduces the need to make a fresh emotional decision about when to invest every single month.

Automation Can Remove Emotion From the Process

One practical extension of dollar-cost averaging is automation.

Choose the amount.

Choose the interval.

Set the contribution.

Then allow the system to repeat.

That can help separate your long-term plan from whatever frightening headline appears that morning.

Automation can also make saving and investing part of your regular financial life rather than something you do only when you remember.

The amount doesn’t necessarily need to be enormous.

Consistency is the habit.

Don’t Assume Your Retirement Money Is Actually Invested

One of the most practical warnings in the conversation concerns retirement accounts.

Putting money into an IRA or similar investment account doesn’t necessarily mean that money has been invested.

In some circumstances, money can be contributed to the account and then remain sitting in cash until investments are selected.

Lapin says she sees people make this mistake.

So if you have an IRA, 401(k) or another investment account, understand both parts of the process:

Funding the account puts money into it.

Investing the money determines what those dollars are actually invested in.

If you’re unsure, review your account or speak with the appropriate financial professional.

Fees Matter More Than They May Appear

A 1% or 2% fee can look tiny.

Over many years, however, fees can reduce the amount of money remaining in your portfolio and available to compound.

Lapin recommends paying close attention to investment expenses and understanding what you’re being charged.

Financial jargon can make those charges harder to recognize.

A fee may have another name.

Different versions of similar investments may have different costs.

That’s another reason learning the vocabulary matters.

You don’t have to become a Wall Street professional.

You need enough understanding to ask informed questions about your own money.

What’s the Difference Between a Broker and a Fiduciary?

One of the most important distinctions discussed in the episode involves financial professionals.

Lapin and Menounos emphasize understanding whether someone you’re working with has a fiduciary responsibility to act in your best interest.

They compare it to the difference between someone earning a commission for selling you a particular product and someone whose role is to recommend what best serves your needs.

If you’re considering professional financial help, don’t be afraid to ask directly:

Are you acting as a fiduciary for me?

Also ask how the person is compensated, what fees you’ll pay and whether there are financial incentives connected to the investments being recommended.

The title on someone’s business card doesn’t necessarily tell you everything you need to know.

You Don’t Have to Be “Good at Math” to Understand Money

One of the barriers Lapin frequently hears is:

I’m not good at math.

She doesn’t buy it.

In her view, the harder parts of personal finance are often human rather than mathematical.

How do you talk to your partner about money?

How do you ask someone to repay you?

How do you confront debt?

How do you negotiate?

How do you discuss a prenup?

How do you stop allowing fear to control financial decisions?

Those questions don’t require advanced mathematics.

They require communication, self-awareness and enough financial literacy to understand your choices.

Focus on the Big Financial Decisions

Personal finance advice sometimes focuses heavily on small purchases.

Skip the coffee.

Don’t buy avocado toast.

Eliminate every little indulgence.

Lapin argues that the bigger financial levers deserve more attention.

High-interest debt.

Credit scores.

Interest rates.

Savings.

Investment fees.

Retirement contributions.

Those decisions can have significant long-term consequences.

That doesn’t mean small expenses never matter. If you’re spending beyond your means, they obviously add up.

But eliminating one latte isn’t a substitute for understanding the larger structure of your finances.

Sometimes You Can Buy the Stock Instead of the Stuff

Lapin shares a story that captures the psychological shift she made with money.

Growing up, she wanted a particular Tiffany bracelet that other girls had.

Years later, after becoming successful enough to afford it, she went to Tiffany intending to finally buy the bracelet.

Then she changed her mind.

She bought Tiffany stock instead.

Her point isn’t that you should never buy yourself something enjoyable.

She explicitly believes people should enjoy some of the money they work hard to earn.

It’s about recognizing the choice.

Before buying something, you can occasionally ask:

Do I want to own this product—or put this money toward owning an investment?

Sometimes you’ll choose the product.

Sometimes you’ll choose your future.

Simply recognizing that both options exist changes the conversation.

Financial Independence Doesn’t Mean Doing Everything Yourself

You can work with a financial professional and still understand your money.

In fact, Lapin encourages people to stay engaged even when they have help.

Know where your accounts are.

Understand what you’re invested in.

Know what you’re paying in fees.

Ask questions when something doesn’t make sense.

Don’t assume someone else must understand your financial life better simply because they have a professional title.

Menounos compares this with advocating for yourself in healthcare.

You can have excellent doctors and still learn about your own health.

The same principle can apply to your finances.

A Financial Checkup to Start With

If money has always intimidated you, you don’t have to master everything at once. Based on the conversation, a useful first review might include:

• Identify any high-interest debt and understand what interest you’re paying.
• Determine whether you have accessible emergency savings for essential expenses.
• Review any retirement or investment accounts and confirm whether the money is actually invested.
• Look at the fees you’re paying on investments and financial advice.
• If you work with an adviser, understand whether that person is acting as a fiduciary and how they’re compensated.
• Consider whether automatic, consistent contributions fit your financial situation.
• Learn one unfamiliar financial term at a time rather than trying to understand all of Wall Street at once.

The appropriate choices will depend on your income, debts, age, goals, risk tolerance and when you’ll need the money.

You Don’t Need to Know Everything to Start Learning

Perhaps the most reassuring message in the conversation is that financial literacy isn’t something you’re either born with or without.

Lapin didn’t begin as an investing expert.

She learned the language.

And once you begin understanding the language, concepts that once seemed intimidating can become much easier to evaluate.

You don’t need to know everything today.

You don’t need to erase every financial mistake you’ve made.

And you don’t need to compare yourself with someone who started investing decades before you did.

You need to understand where you are now—and make the next informed decision from there.

Because when it comes to building your financial future, the time you didn’t use is already gone.

The time you can still use starts today.