Financial Wellness

Healthy Finances: How Nurses Can Invest With Confidence

The Trusted Team
January 6, 2021
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Nurses! Are you ready to talk about money in a fun and inspiring way? (Finally, right?)

Get your financial life sorted and learn more about investing so you and your family can enjoy more freedom, even if you’re on a median income, have debt, have no time to learn about investing, or are terrified to start. 

We spoke with Lynn Frair, RN, a nurse and personal finance enthusiast who, despite numerous financial and health setbacks, used simple investing tactics to reach “work optional” status at age 39. In our recent event, she explained it all!

Watch the full event below!

Throughout the event, and below, you’ll learn:

  • Why investing is a necessity for financial success
  • The #1 financial mistake nurses make that sets them up for financial failure and compromises their security
  • The top factor preventing nurses from beginning to invest and how to overcome it. 

Disclaimer: Lynn Frair is not a financial advisor (she’s a nurse!) and doesn’t pretend to be one online. We suggest consulting your tax and accounting professionals. This post is for informational purposes only.

What Do We Mean When We Say Investing?

Here, when we say “investing,” we’re talking about stock market investing (not real estate). Stocks, or parts of companies, are traded publicly on the stock market.

Before You Start Investing

  • Assess your debt 
  • You don’t want to remodel your kitchen if your garage is on fire!
  • See our previous Healthy Finances event that covered paying off nursing debt

High-interest debt should be considered and possibly paid off first (anything over 6% or 7%). Presuming you have lower interest-rate debt, like a home mortgage or student loan. There’s a lot of nuance with this, but this is generally speaking what you should expect to see.

Why Should You Consider Investing?

Inflation! You can expect the cost of living to increase by 1-3% each year, in other words, your money is worth 1-3% less. The only way to counter this increase is to have your money increase simultaneously, or work for you (i.e. no leaving your cash under the mattress or even in your savings account).

So why is investing necessary for financial success: it gives you financial freedom and flexibility. Without this agency, many nurses are trapped and can’t realize their full potential.

woman holding plant in soil in her hands investing myths investing for nurses

Common Investing Myths

Investing Is Dangerous

There will always be natural fluctuations of the market; the goal is to buy and hold for long-term gains. But yes, of course, it’s true that there is always a risk of losing money. And in fact, this may happen in the short term.

Investing Is Too Complicated

Some people choose to outsource and feel good about that (i.e. hiring a financial advisor). In fact, many people don’t feel comfortable and confident, so they outsource, but actually it’s far less complex than you think.

To use the analogy of car maintenance. Most of us outsource the work on our cars. You don’t have to, but if you understand how often you need to change the oil or how often you need a transmission flush, then when you outsource to a mechanic, you’re doing so from a much more knowledgeable and empowered place. 

It’s the same idea with your finances.

It’s Too Late for Me to Start Investing

Yes, it’s true that time is a huge factor in investing—and compound interest is real—but investing can really begin at any age. It’s about relative, long-term gain.

I Don’t Make Enough Money to Start Investing

You don’t need a lot of extra cash sitting around to begin investing. You can start with a little at a time. It all adds up at the end, and something is better than nothing! 

Here’s an example: Chris and Jennifer both invest $100 a month at a 5% annual compound rate of return. Chris begins investing at age 25, putting away $100 every month until 65, and Jennifer begins saving $100 a month at age 35.

An extra 10 years of saving means that Chris has about $162,000 in his bank account, while Jennifer has $89,000 by the time she is 65. Chris' balance is nearly double Jennifer's, and he contributed only $12,000 more of his own money.

So age and time do matter, but you can begin taking advantage of compound interest at any age.

What’s the Top Investing Mistake Nurses Make?

As we saw above, waiting too long to start investing! So don’t put it off! But…

What’s the Hardest Thing About Getting Started With Investing?

Fear, of course! Fear, confusion, feeling overwhelmed, and under confidence can all be stifling. Women tend to be under confident investors rather than over confident. Guess which one is easier to fix? Under confidence.

How can you begin to overcome this? Incrementally educate yourself. You won’t become an expert overnight, but you can keep learning more, and the confidence, competence, and money builds over time.

coffee mug with begin written on it sitting on dining room table begin investing for nurses

So, How Can You Start Investing in 30 Days?

Find out what you already have invested (if anything)

  • Get a snapshot of your current investments and fees
  • Estimated time: 30 minute phone call

Find out your employee match

Are you signed up and getting the full match? You are entitled to that as part of your compensation package. You are voluntarily turning down part of your compensation if you don’t take advantage of your employer match. 

  • What is your employee match: does your work have one and are you signed up?
  • Some employers will sign you up automatically
  • This is part of your compensation package!
  • Estimated time: 30 minute phone call to HR or your brokerage

Set up your automatic retirement contributions

  • Set up or adjust your employer match to maximize it
  • Estimated time: 3-15 minutes of adjusting your designation on the website
  • May take a couple of pay periods to take effect
  • What is your employee match: does your work have one and are you signed up?
  • Some employers will sign you up automatically
  • This is part of your compensation package!
  • Estimated time: 30 minute phone call to HR or your brokerage

What's Next?

You do need some money to start investing, so how can you make sure you’re getting the most out of your paycheck? Check out the Nursing Salary Calculator to make sure you’re making a competitive salary for your area.

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