Selling Stocks is Super Scary, Seriously

Simple Path To Wealth?

The high-level FIRE roadmap seems fairly straight-forward: Save & invest as much as possible until one’s portfolio grows large enough to enable withdrawing money as needed & living off the assets. Simple to execute, right? In theory yes, but in reality it’s more complicated than that.

For 20 years on my FI journey I always saved & invested as much as I could. Although it wasn’t always easy to do this, it also never felt like a burden since I had an end goal in mind (to retire early) and it helped that I was already a natural saver. Also, because I worked a W-2 job my entire career, my income was always consistent – I received a paycheck once every 2 weeks. My normal routine became 1) receive paycheck, 2) pay bills, 3) save & invest as much as I could. I became so accustomed to this process that my financial life was pretty much on auto-pilot and I was always very comfortable with money.

The Dark Days When Fear Crept Into My Mind

I viewed money in a positive light and thought of it as a tool that I could use to someday buy my freedom. However, as I mentioned in one of my musings, things started to change when I retired – surprisingly I started to think way more about money and actually even began to worry about it for the first time in my life. My sense of logic started to fade and psychology started to take over… Not having a steady paycheck was scary and so was the thought of actually withdrawing money instead of investing it.

Before leaving my job I had intentionally built-up a cash reserve equal to approximately 1.5x our baseline annual expenses. Since my wife continued to work part-time, my plan was to slowly draw from savings to supplement our income, knowing that at some point the cash would be exhausted and I would need to start withdrawing from our investment portfolio. Well, of course the cash pile started to deplete WAY faster than anticipated due to things both out of our control (unexpected housing & medical expenses) and things we consciously chose to spend more money on (travel & concerts).

Emotions > Logic

Although withdrawing money was always part of the plan, I was so scared even thinking about this, since it would be my first time selling an asset in ~13.5 years (5/23/11 to be exact). For an entire year leading up to this event I had many sleepless nights and worried often throughout the day – I just couldn’t stop thinking about it. I knew that I had to rewire my brain after 20+ years of constantly saving, saving, saving to let myself know that it was actually OKAY to take money out of savings & investments because after all, this is what my wife & I had worked so hard for and had planned for all these years.

I know that all of this probably sounds absurd and I wouldn’t blame anyone for thinking that. But just remember that no matter how logical someone is on a regular basis, sometimes emotions take over and play a huge role; after all we are humans and not robots. I am a perfect example of this.

Money Scripts

Another explanation for my hesitation & fear may be associated with what Dr. Brad Klontz calls “money scripts”. Money scripts are a set of rules and lessons people learn about money, often in childhood, that guide their financial behaviors. There are four identified money scripts (Money Avoidance, Money Worship, Money Status, Money Vigilance) and understanding these scripts can help identify limiting beliefs to inform better financial choices.

Note: I won’t go into details of each money script in this post, but Brad has a great video for those who’d like to learn more.

The money script I personally identify with is “money vigilance” which applies to those who are alert, watchful, and concerned about their financial health. Feeling that they have enough money is important to them, encourages saving & frugality, and being smart with spending. This is good for financial health, but can also lead to excessive wariness or anxiety with money which may not be so good for personal health & happiness. These feelings can prevent people from enjoying their money. Money can provide a sense of security & safety, but those with Money Vigilance may not really get to enjoy this benefit; their feelings of worry may be stronger.

In my case, the worry was definitely strong.

Logic > Emotions

As a way to regain control of the situation, I decided to go back to what got me here – putting a plan in place and then executing it. With that in mind, I chose the specific investment I was going to sell and set a date for executing the trade. I purposely chose Halloween because: 1) it seemed to fit the mood perfectly since I was personally scared to sell and Halloween is all about frightening things, 2) With so many activities planned for that evening (i.e. taking my kids trick-or-treating), even if I ended up freaking out or having an anxiety attack, I knew that I would be distracted by other things.

The week or two leading up to Halloween was still scary and a little stressful, but I surprisingly felt much calmer than I had in a long time. I think this was primarily because I had a plan in place, which allowed me to be in the driver’s seat and in particular have control over my emotions.

It’s Go Time

Well, the day to sell finally arrived and it started out pretty much like any other – I drove my kids to the bus stop then came back home to do a little podcast work. I was so engaged in my daily routine that I actually almost forgot about the impending task at hand. When I finally remembered around 10:30am I called my wife to the computer, so we could partake in the momentous event together.

I logged into our brokerage account and with hands shaking I readied the trade. With the transaction preview pulled up on the screen and the cursor positioned directly over the “place order” button, my wife and I looked at each other nervously knowing that we were close to the point of no return.

She placed her hand over mine and together we clicked the mouse. The screen took a couple seconds to refresh and then voila, the next thing we knew we no longer owned 40.15443 shares of YUM (Yum! Brands, Inc).

The Aftermath

It still took us a few moments to process what went down, but then it abruptly hit us that we had overcome our fear and had done it; we had sold stock! Mission accomplished!

After taking some deep breaths, a calmness washed over us and we felt completely relieved. We considered this first act of selling good practice, knowing that we would be performing this same action on a more regular basis moving forward (either monthly, bi-monthly, or quarterly). We also discovered that the actual mechanics of selling weren’t too onerous – in fact, it felt exactly the same as any standard online transaction, such as paying a bill or purchasing concert tickets.

Once the momentary excitement died down, I went back to my normal routine as if nothing out of the ordinary even happened. I didn’t even think about it again until later that night as I was standing in the pouring rain trick-or-treating with the kids. It was at that moment I realized that life was about so much more than money worries or money itself. Having the freedom & time to spend with family was the entire reason why my wife and I saved money in the first place. Hopefully by keeping this thought front-of-mind it will eliminate (or at least alleviate) any fears surrounding future withdrawals, but we shall see…

Links/Resources

Reader Questions

Do you have any fears surrounding money? If so, how did you (or how do you plan to) overcome them?
Would you consider yourself more logical/rational or emotional when it comes to money?
Which Money Script do you associate with?

Leave your answers or comments below – or email us directly at info@epicfinancialjourney.com