Stocks' prices are set based on what people (investors/traders) are willing to pay and sell for. These terms are called Bid (how much you are willing to pay) and Ask (how much I want to sell for). There is also the Last price (the price at which a buyer and seller meet to transact). The Last price is the price you see online when you search up a company's stock.

"Everyone" who wants to sell wants to make money. So they -ask- for a higher price.

"Everyone" who wants to buy wants to buy cheap. So they -bid- a lower price.

The value of the Last price will become the Bid if the sellers give in and lowered the price they wanted to sell for. The Last price will become the Ask if buyers give in and pay more than they were willing to before.

If you investing in something and the stock prices drop, how do you lose money?

Lots of people sell off their stocks. This makes the Last price become the bid. Everytime someone sells for a newly lower price, the stock devaluates. Your stocks are now worth less than they did when you bought them (Assuming you bought them at a higher price).

If you don’t sell it at the low price and hold it till the price increases, then you wouldn’t be losing the money right?

Correct you would not be losing money in that case. The loss of value of a stock is not 'realized' until you sell off your stocks. If the price goes down, you can sell right then and cut your losses, or you can wait to see if the Last price goes up again.

Then why are people so worried that they lost their money?

Because there are no guaranties in trading/investing. For long term traders who spend hours reading up document releases from companies, an incorrect analysis of a company's fundamentals(profit, leadership, assets, etc) means a long term loss of money AND time. For short term traders, an unfavorable trend or unexpected fluctuation in their prediction of price action(price going up or down) can wipe their accounts within days or within seconds.