feel like a limitless world of options to sort through.

There is the drama, wherein cable news has basically turned the stock market into a soap opera for finance bros. You probably have some mouth breather uncle who's constantly condescending to you about all of his hot stock tips.

And then, of course, you have COVID-19, which makes basically everything related to investing about 100 times scarier than it was a few months ago. But I say this with complete sincerity-- investing is nowhere near as scary as it seems. And here are five things you need to get over your fear of investing and start doing it right.

Number one, the world of investing is not limitless and you do not need to follow investing every single day. There is a common misconception that in order to be good at investing, you need to be obsessed with it, meaning you have to get up every day at 5:00 AM, crack your first Red Bull, and then spend the next 16 hours staring at your multiple trading screens. But this is totally untrue.

You do not need to spend all day and night thinking about investing in order to be good at it. And in fact, some people who are the most obsessed with investing are actually the worst at it, because on some level, they kind of believe that they actually can have some control over the future, which is obviously never the case. And in reality, good investing is not about manipulating or controlling anything.

It's about making good, smart, long-term thinking decisions that are aligned with your timeline and goals. This means learning about the major investment types such as stocks, bonds, or real estate, and learning about the different options for investing within them, such as things like funds or various robo advising services. But that's basically it.

There's a pretty finite amount of information that you actually need to know in order to start being proficient. And then it's really just about building out the right strategy and automating it from there. This doesn't mean that you can go without learning that information.

But it means that the amount of information you really need to know is well within your ability to learn. We'll link to some of my favorite resources for getting started with this info in the description. Number two is to remember that when you're investing in "the stock market," you're investing in businesses.

Now, there are lots of different types of investments. But when a lot of us are talking about investing, especially for the first time, we're often talking about the stock market. And that's because over history, the stock market has produced some pretty great returns, especially over the long term, which makes it inherently pretty appealing to young people.

So let's talk about what it is that you own when you own a stock. A stock is essentially a share of ownership in a specific business. Now, not all companies make stock available for purchase to people like you and me.

But many do. These companies are referred to as publicly traded, because regular old members of the public like you or me can invest in them by investing in shares of their stock. And these shares of ownership can be bought, sold, and traded in the place that we call the stock market, which is why the stock market is not the economy.

It's just a place where people are buying and selling these stocks. So keep this in mind as you make your way into stock market investing. Not every year is going to be a good year for the economy generally, the stock market, or many individual businesses.

Growth does not happen in a straight line. And as a small business owner, I'm very familiar with the concept. But the idea is that over time, there is more progress than there are pullbacks.

And if anything, accepting this as true makes it much easier to think of your investments in the long term. You wouldn't expect a business to have a banner year every single year. So why would you expect a stock, which reflects ownership in that business, to have a banner year every single year, either?

You wouldn't. But furthermore, something interesting happens in the stock market. People buy and sell shares in order to position themselves for the future, which is inherently unknown.

So it becomes inherently kind of an expectation market, because think about it-- you would only buy a stock if you felt that it was going to make you money in the future, right? But you and I might disagree about the prospects of that stock. Maybe you buy and I sell, which is one of the reasons why we get price volatility.

This buying and selling is reflected in the price of the stock in real time. All of these factors come together to make the stock market a living, breathing manifestation of all of these expectations, and to some extent, emotions. In the short term, it can be dramatic and even irrational, which is pretty aligned with how humans can be.

On a given day, we can be a bit of a hot mess. And some of the short term volatility can be even further compounded by financial institutions like hedge funds and their trading activity. But all of this short term volatility is OK, because what you are really doing is investing in these businesses and these stocks in the long term.

Number three, remember that when analyzing an investment, risk and return are inextricably linked. With investing, if there is a potential increase in returns, there is also an increase in risk. You simply do not get one without the other, which means that the act of investing over the long term is simply an act of balancing risk and reward.

Like, imagine you were hiring for a job, and one candidate is a true rock star in terms of their skills for the job. They're a bit of a creative genius. But they also have a reputation for being somewhat unreliable, showing up late to work, et cetera.

The other candidate is kind of boring and is not overly amazing at the skills of the job, but is incredibly reliable and professional. Which one are you going to choose for the position? One is not inherently better or worse, but you still have to make a decision about which one is better for this particular role.

In investment, that short term volatility that we were talking about earlier is the inherent risk required for that long term benefit. It's the price you have to pay for the chance at higher returns over time. Volatility isn't just a pretty damn normal part of the stock market cycle.

It's also required of an asset class where we're hoping to see more than a few meager fixed percentages of return. So in general, stocks are considered higher risk, higher reward, where bonds are viewed as generally more low risk, low reward. And real estate investing can fall anywhere on this spectrum, depending on the kind of real estate investing that you're doing.

Then, of course, there are all different types of ways that you can get access to any of these investment types, each of which will have their own level of risk and reward. For example, if you put all of your money into one specific stock, that is way more risky than if you're investing into a fund that is comprised of thousands of different stocks in a diversified way across the entire stock market. Number four-- historically, the easiest and cheapest ways to invest have also been the most successful.

Quite frankly, there are pretty few areas of money management in which the chillest and cheapest options also happen to be the best ones. And for anyone who's intimidated of investing, this should come as incredible news. There's a really simple way to achieve the stock market's average performance over time, and that is through what are called index funds.

So quickly, let's break down the term index fund. An index is simply a measure of stock market performance. So for example, the S&P 500 index is a measuring stick for the performance of the 500 leading companies in the United States.

That's it. That's its whole job. A fund is really nothing more than a basket of investments.

For example, it could be a basket of estate holdings. Funds make it super easy to buy a whole bunch of stocks or bonds, or whatever, all at once. And some of them are even these fully diversified portfolios, all packaged into one fund.

Therefore, an index fund is a basket of investments mimicking some index. So an S&P 500 index fund invests in all 500 of those leading US companies, which will return about the average of the US stock market's performance over time, which has historically been quite generous. Basically, what you're saying is just, invest me in the whole thing.

And I'm not trying to get cute and beat the stock market. And then you're just along for the ride. Because you're not actively trying to beat the market, this is called "passive investing." And historically, passive investing has been really successful over time.

In fact, index funds tend to outperform managed funds about 90% of the time-- huge. And these are active managers, by the way, who are pretty experienced and have a lot of knowledge about the market. So I'll say it again.

You can do better than 90% of money managers by sticking to index funds. So that's it. Keep adding money in and let it ride.

And of course, you may still opt to take a more active approach, but that does inherently come with much more risk when you're trying to beat the market, because your outcomes are going to deviate from the markets, for better or for worse. And lastly, number five-- your brain is inherently mismatched to the task of investing. But knowing that is the first step to overcoming it.

Part of being a good investor is learning your own cognitive biases. We've already discussed one, which is that humans don't like to think in long terms. We like instant gratification.

We like to see results right away. This is hardwired into our survival. We want a Snickers bar right now, not 40 years from now.

But this is simply not how investing works. And if you think in these terms, you will constantly be disappointed. For example, 10 years seems pretty long to the average person.

But it's not a particularly long time when it comes to the stock market. And this really messes people up. There might be a 10 year period in the stock market that totally sucks.

And our brains will trick us into thinking that the stock market is just inherently bad, or we're inherently bad at it. But this isn't true at all. Over history, the stock market has had many periods that were overall quite lackluster.

And in the moment, seeing those returns might make you feel like you're just treading water. But you're not treading water, the market is. And it's about waiting it out.

Investors also tend to fall prey to something called hindsight bias, which is basically the perception that if a certain thing has performed a certain way, such as a particular stock or the market generally, that it will continue to do so. But this isn't necessarily the case, because if all it took to predict the performance of the stock market was just looking at how it predicted the last few months, everyone would be rich. Lastly, think about how we are often wired to handle something that feels dangerous.

We are hardwired with that fight or flight response where if something feels bad or risky to us, we are encouraged to get away, or at minimum, to do something about it, which leads us, when we see a huge market dip, to want to take out our money right away to prevent further damage. But all we're really doing is ensuring that we're locking in those losses, because we're cashing out at a very bad moment. The last thing you want to do if your investments have suddenly taken a big dip in value is to sell them all.

But that can be a hard instinct to fight. Learning to identify these impulses and to actively counteract them is going to ensure that you're able to invest in the way that is most sustainable and stable. So in summary, learn the options that exist.

Find low cost investments that suit your goals. Keep adding in money regularly, no matter what the market is doing. And stick to the plan.

So then go to sleep for a few decades, because you have the ability to invest. I know it. And as I mentioned, this video is sponsored by Fidelity Investments.

They are here to help you reach your savings goals. If you're looking for an easy way to finally start investing what you save, check out Fidelity. Bye guys.