Why your risk tolerance isn’t as low as you think

A lot of newbie investors tell me, “I just have a low risk tolerance.”

But here’s what I’ve learned: most of the time, that’s not actually true.

What’s happening is that you’re trying to make long-term investment decisions without short-term clarity, which makes everything feel risky.

Here's why you think you have a low risk tolerance:

You don’t know where your money is going.

So putting it into a market that feels uncertain just adds more uncertainty. Your brain interprets that as danger, not because it’s true, but because there’s no plan.
Once you start budgeting and telling your money where to go, that confidence builds. You stop asking “what if I need it?” because you know exactly what your money is doing.

You don’t have a safety net.

Before you even think about investing, you need to build a solid emergency fund outside of the market. When you have a cash buffer you can fall back on, you're no longer tempted to pull money out of your investments every time something breaks. That buffer allows you to increase your risk so your investments can grow because you can afford to leave your investments alone even when the market is down.

You’re carrying debt (and the shame that comes with it).

You’ve been taught that debt is bad and you shouldn’t do anything for yourself until it’s gone. So investing feels like a betrayal, even when it isn’t.
Let me be clear: you can pay off debt and invest. That’s exactly what I do. You just need a strategy that makes space for both. And if your debt feels like it’s out of control, the first step is getting it under control, then start small. Even $50 a month in your investments can make a difference.

You don’t understand investing well enough to feel confident.

And that’s okay. Most of us weren’t taught this. But once you start learning how the market works, how it moves in cycles, how to manage risk, how long-term gains work — you stop feeling scared and start feeling empowered.

You don’t want to lose money.

The biggest reason why you think investing is risky is because you don't want to lose money, and that's totally fair. But when you learn how investing really works, you realize:
→ You don’t lose money until you sell
→ There are smart ways to manage risk
→ The market is designed to recover and grow over time

The more you learn, the more confident you become. And your risk tolerance starts to rise, not because you’re braver, but because you’re finally informed.

This is exactly what I built the Surplus Stack Society to do — to give you the tools, education, and support you need to invest confidently and make decisions from a place of clarity, not fear.

Your Truly,

Eduek 🦢