Mistakes. All investors have made a few. No one sets out to take a wrong step, of course, but many investors later say the lessons they learned the hard way are among the most beneficial parts of their investor education. Perhaps just as beneficial—and certainly less painful—are lessons learned from other people’s mistakes!
Recently we asked Sound Mind Investing (SMI) members to tell us about their most significant investing mistakes, and we were overwhelmed by the number of responses! We’re grateful for all who told us their stories. Here are a few of the lessons they learned.
Waiting Too Long to Begin Investing
“My biggest mistake was not starting early enough. I thought I had too little to invest to make any difference. I should have had the discipline to set aside small percentages of my income earlier in life even though I was not making much money back then. If I had started earlier it would have helped me get the ball rolling on investments and given me valuable experience that I really needed later on. Investing takes some practice.”
This mistake—not beginning to invest at an earlier age—was one of the most frequently mentioned investment-related regrets. Good intentions often are overcome by dozens of questions that arise when people try to get going. Where do I open my account? What do I invest in? How do I do this exactly? Busy schedules push the answers to the back burner. If this describes you, it’s time to stop allowing implementation paralysis to thwart your good intentions. Starting an investing program doesn’t have to be difficult. Check out Six Steps to Creating a Long-Term Investing Plan for a primer.
Not Getting an Education on Investing Basics Earlier
“My biggest mistakes have centered around buying the individual stocks of companies that I did not completely understand. But as I look back at that, I am thankful in a way for that expensive lesson. It made me realize how ignorant I was about investing and money management. Over the next several years, I began to seek financial understanding, and now have a solid foundation and am able to make educated decisions with confidence.”
Source: Crosswalk | Austin Pryor