Investment Mindset Lesson 1: Why "Only Invest What You Can Afford to Lose" Matters

Almost every article about investment risk says "only invest what you can afford to lose". But not many people truly understand this phrase.

Today I'll use my real experience to tell you why these four words are so important.

When I first started, I couldn't listen to this advice. Back then seeing others making money, my eyes would turn red.

Back then I had just started working, had saved up a few tens of thousands, which I was preparing to use for rent, and some was even borrowed from friends.

Looking back now, this was practically suicidal - putting living expenses and borrowed money in, how could my mindset be good?

The first few days after putting it in, I would check the charting app every half hour.

Up I'd be happy, feeling like I could add an egg to my next meal; down I'd be anxious, couldn't even eat.

Couldn't focus at work, would secretly check my phone during meetings, got told off by my boss several times.

Couldn't sleep at night, one moment thinking about what to do if it goes up, one moment thinking about what to do if it goes down.

During that time my whole state was really bad, friends would ask if I was sick when they saw me.

Later the market did go down, the money in my account kept getting smaller.

Back then I really panicked, thinking every day: what about rent? How to pay back my friend?

That time was really tough, even thinking back now scares me.

Later I gritted my teeth, pulled all the money out, first paid rent and paid back my friend.

Although I lost quite a bit, in that moment, I felt the weight lift off my heart.

Since then, I set myself a hard rule: only invest what I can afford to lose.

What is money you can afford to lose? Money that if it's gone, it doesn't affect your normal life.

Rent, mortgage, food money, medical money, emergency money, none of these can be touched.

Investing with money you can afford to lose, your mindset is different.

Up, certainly happy; down, not panicked - anyway this money was already prepared to "disappear".

Can focus at work, can sleep soundly, your whole state is different.

Even more interesting, after your mindset improves, decisions actually become more rational.

Before as soon as it went up I wanted to buy, as soon as it went down I wanted to sell; now can think calmly, wait patiently.

Of course, this isn't to say investing with money you can afford to lose will definitely make money - investing has risks, no one can guarantee.

But at least, you won't mess up your life because of investing, won't affect your physical and mental health because of investing.

Final reminder: this article talks about investment mindset, not investment advice.

Everyone's situation is different, the definition of money you can afford to lose is different. Think clearly before deciding, you bear your own risks.