This was published 3 months ago
Opinion
My wife thinks investing is too risky, how do I convince her?
Paridhi Jain
Money contributorI’m married, and we’re both in our 30s. I want to invest our money and put our super into high-growth portfolios, but my wife is very risk averse and scared of the idea of investing. We have had a meeting with a financial advisor, but it didn’t seem to help. She isn’t any more open to the idea of investing than before. How do I get her on board?
People often use the term risk averse to describe what is essentially “fear of risk” but there’s a difference between being scared of something (which is an emotional response), and making a calculated decision to take on less risk. It sounds like your wife sits in the former category.
When someone says they think investing is too risky, they can often be speaking from a place of fear.Credit: Simon Letch
In dealing with this, sometimes people want to go straight into presenting a very factual, well-reasoned case to convince someone that they should invest. They think that if they present enough evidence they might be able to logic the person out of fear. Now, this can help to a degree, but it usually isn’t a very effective solution straight out of the gate.
When someone is operating from a place of fear, logic rarely helps them out of it. They’ll hear what you’re saying, but it won’t convince them to let go of the fear. You have to deal with the fear itself, and help the person feel more safe. That’s an emotional journey, not a logical one.
Here are a few steps you can do to start that process:
Talk about it
Where did the fear come from? What exactly is she scared might happen? Did she see that happen to someone in her family growing up? What does her family think about investing?
This might be a slow process, but it’s a little short-term pain for long-term gain.
Through this process, both you and your wife will start to understand the fear better. You both might discover things you previously didn’t know. Maybe someone in her family lost a lot of money through investing. Maybe her family was scared of investing as well?
This conversation helps you both give context to the fear. Instead of treating it like an inconvenience that you just want her to get over, you start to have empathy for how that fear developed. Remember that the fear is just doing its job, and trying to keep her safe.
Rewrite your beliefs together
This could look like reading or watching educational material together, and pausing so that she can ask questions or share her concerns. If your wife prefers to learn on her own, then you can still be supportive and encouraging in helping her find resources that might help her, or making time to chat about what she’s learned and discuss her findings with her.
It could also look like having conversations with other people you know (friends and family) who can start to share their experience of investing.
The goal is less about getting her the practical and tactical investing skills, but more about providing alternative sources, information and stories that can start to counteract her fears. This will start to loosen up the narrative she has built around investing.
If she never heard about investing growing up, seeing others who invest will help normalise it for her. If someone in her family lost money investing, learning about how others manage risk and have been successful will give her an alternative perspective.
This process will help her rewrite the beliefs she has about investing. For example, instead of “investing is too risky” it could change to “there are ways to manage the risks”.
Start small
There are investing apps that let you start investing with under $100. You can start there. Alternatively, I also often suggest that if you’re scared to start investing, start with learning how to manage your superannuation because that’s just another investing vehicle.
So, do that process together. Sit down and sign up for an app together, or walk through your super funds together. Help her get familiar with the tool, the portfolios, the different options, how it works, what happens when the market moves. This will help her feel more familiar with the process, and start to normalise the ups and downs of the market.
Yes, this might be a slow process, but it’s a little short-term pain for long-term gain.
If you try to brute force your way past the fear, there’s a good chance that the minute the market drops, she will panic. But if you work through the fear, she will be more confident to handle risks longer term, making for a more united and resilient approach to investing as a team.
Paridhi Jain is the founder of SkilledSmart, which helps adults learn to manage, save and invest their money through financial education courses and classes.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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