Three main comments:
1. Your last paragraph is called market timing. Stay away from it. You will not succeed, and it will hurt you in the end. This is coming from your loss aversion: if you wait until the market crashes, you think you will feel "safe" to invest, and you won't have to worry about losing money. This is entirely false. Take it from someone who has been doing this a lot longer than you: when the market is falling, it never feels "safe" to invest; then you tell yourself, well, you'll wait until it's heading back up; and then you end up missing the bulk of the next upswing.* And don't forget: if you want to time the market, you also then have to know when to sell again. And no one gets both ends of that right -- if you're too aggressive, you hold on too long; if you're too scared, you bail too soon (that would be you, btw). It just doesn't work. For anyone. Think about it: there are thousands of extremely high-IQ, genius-level talents with Ph.Ds and years of training who go to work on Wall Street to make gazillions of dollars by timing the market better than everyone else. What is it about your background, talents, and abilities that leads you to believe you are going to call the peak and the trough more accurately than they do? Either you are totally in the wrong line of work and need to head to Manhattan immediately, or it's hubris, pure and simple.
I am sympathetic, though -- believe me, I know the feeling. I really started investing in the early- to mid-90s, when (despite several crashes) the market had been on an overall upwards run for over a decade. Oh, the drama -- P/E ratios are at such highs, the Dow is ridiculous, this is just guaranteed to crash! But what do I do? What are my other alternatives? I couldn't think of any, so I gritted my teeth and kept throwing my money in. Lived through the first tech crash. Lived through the 2008 crash. Lived through a variety of other short-term crises that all said This Time It's Different. And guess what? I have buttloads more money than I did back then. And a metric shit-ton more than I'd have had if I had waited for some metric to hit my desired target before I started (because it never did).
2. I don't care much about the debt-vs.-investing thing given the size of your debt, but don't wait too long to get going in your 401(k). The power of compounding is amazing -- and it is at its most powerful early in your career, when whatever you invest has the most time to grow. You have seen the stories about "if you started at 25 vs. 35" -- they're all true. But it's even more important to start getting that growth soon if you want to FIRE. Say you're 25 and you want to retire at 65; the rule of 72 says that at 7% average returns, the money you put in at 25 will double 4 times over -- so $10K at 25 will be around $20K by 35, $40K by 45, $80K by 55, and $160K by 65. But if you want to FIRE at say 45, you lose the final two doublings. And note that that is not 2x, it's two doublings, or 4x -- so instead of $160K, you have $40K. So the more important an early FIRE date is to you, the more important it is to get investing as much as you can, as soon as you can.
And the 401(k) is, of course, a double-bonus, because not only do you get tax-deferred growth, but you also get a tax deduction from your current taxes, which means you can invest more without actually losing as much out of your paycheck. Run some tax calculators and see for yourself -- you may be able to sock away noticeable amounts without seeing much of a hit to your paycheck.
3. Most people who say they are risk-averse are really risk-blind. You are averse to the immediate pain of seeing a big loss in your investment accounts. But what you're not seeing is that if you keep your money in cash and out of the market, you are guaranteeing that you are losing money to inflation every year. Sure, it's not as painful, but it will do more to damage your chances of FIRE than any market upheaval -- it's death by 1000 cuts. It's not as obvious to people today, but the ridiculously low inflation rates of the past decade or so are not normal. If inflation reverts back to 4% (closer to its historic average), and bank accounts and money market funds increase the interest they pay all the way up to 2%, your purchasing power will be cut in half over 36 years -- so if you have $100K in savings now, in 36 years it would be worth the equivalent of $50K. It will eat you alive, and you won't even notice it. Meanwhile -- reverting back to 1 above -- the market has never lost 50% over 36 years; in fact, it's never even lost money over that period of time. And if the market were to suffer that kind of long-term loss, well, I can only assume that the whole country would be in so much trouble (or no longer existent) that none of us would be worrying about FIRE anyway.
So, tl;dr: figure out how to manage your fear, and make decisions based on math. Which means throwing as much as you can manage into the market as quickly as you can, and then just holding on tight.
*Historically, much of the market gains have occurred suddenly and over a short period of time, which means even if you get back in in time for some of the gains, you will still miss out big-time if you are not in the market when the change happens. Do some research on how your returns change if you miss the 5 or 10 or 20 biggest days.
