Investing in the stock market is so vital to achieving a comfortable retirement. I have seen first hand how investing can put you ahead of the curve financially. It’s only fair to pay that forward by passing the useful information to anyone who will listen. One thing that I learned as I embarked on my investing journey was that there is a lot of room for error. Boy did I make plenty of mistakes.
While making mistakes during your investing journey is somewhat inevitable, there were many that could have been avoided had I been privy to any of the information that I found through trial and error. I have a plethora of mistakes that I could warn you about, but for the purpose of this post, I have narrowed it down to the three worst investing mistakes that I have made since starting my retirement journey.
(Pin for later…)
This post is for educational purposes only, and does not represent investing or financial advice. Please seek professional guidance if you are wanting to be guided through the risks of investing. please read our full disclosure
Not investing as early as possible.
I didn’t start investing until I was 24 years old. That was 4 years ago. The age that you can start investing independently is 18 years old. For me, that would have been 10 years of investing under my belt. Why does this matter? Well as many of you know, We just reached the end of a ten year bull run. Because I started 4 years ago, I missed out on about 6 years of possible gains. It pains me to come to terms with the thousands of dollars lost because of that small decision. My choice to do nothing cost me an average of 7% gains through a decade. Truly a painful realization. How I choose to make up for it is to be present in my current investments, and contribute as much as possible, as early as possible.
Investing without doing my research.
How exciting is it to jump into something new and speak online to like minded people during your journey? That is the first thing that I did upon the genesis of my investing journey. Where the mistakes started was when I would soak up all of the information without having my own input. This is a problem because investing is a huge risk. While the risk varies depending on your investment choices, there is always risk associated. I simply was not educated on the investments that I jumped into.
This resulted in me not establishing a stable position in my portfolio until about two years ago. I spent the first 2 years experimenting with high risk, and volatile stocks like vodafone for example. I had no idea what Vodafone was, but I was entirely focused on the dividend yield at that time. It ended up costing me more than 1000 dollars in that investment alone! The least that I could have done was use the wealth of information available on the web to become more acquainted with different investing strategies and engines.
Investing in expensive ways to fit in.
My biggest investing regret (besides starting later in life) is investing expensively. What do I mean by this? The first investment platform that I started with was Ally invest. At the time, each trade came with a commission fee of 5 dollars. That’s not too much money at first glance. However, if you were a terrible investor like me, you would have been investing small amounts of money to invest, and throwing money away on commissions.
For example: I would buy 1 share of something like T. At the time T cost around 29 dollars. I would literally buy one share of T and throw 5 dollars away via the cost of using Ally invest instead of waiting until I had at least 1000 dollars. At least that way the commission would have been negligible.
Another way that I was investing expensively was by using a brokerage that did not have zero dollar commissions. Instead of paying 5 dollars for every trade, I could have opted to invest on a completely free platform. While I am not the biggest Robinhood fan, I still could have opted to invest with something like M1 finance because it is a great hands-free robo-investing platform and would have saved me hundreds of dollars had I started on their platform.
These are the 3 biggest mistakes that I have made during my investing journey, and I hope you learn from what I have done. I cannot even imagine how much money that I would have If I never made these mistakes. But alas…such is life! These days I’m riding the crazy volatility of the market, and enjoying my well sought out and healthy portfolio positions.
So now I need to hear from you. What investing mistakes have you ever made? Were there any that I did not list in this post? Either way, I hope that these mistakes opened your eyes to some common mistakes that beginners make. For more content on investing and money please check out these two articles or my Youtube page. See you next time!