If your goal is to reach retirement having a great-performing portfolio, then you should avoid this dumb financial moves now.
We all have something inside our heads that tells us to save money “for a rainy day.” And that is an excellent idea, but saving money can be more complex than it sounds. Here are some mistakes everyone should avoid:
1- Not investing
Sure, saving is one thing. But have you ever considered the possibility of putting your money to work for you? Investing might seem like a titanic task that requires a lot of knowledge, time and money. Well, not entirely so. While the more information you have, the better, you can start investing with very little money. And yes, you do have to monitor your portfolio to make sure it is performing as expected, but there are great robo-advisors that will do the job for you. Not investing soon enough can cost you thousands of dollars down the road.
2- Being impatient
Building wealth takes time. You need to invest like you will live forever, so thing long-term. Sure, you might find an investment option that pays incredibly high returns in no time, but check the risk it entails. Is it worth it? Probably not. Set a goal and invest towards achieving it in the estimated deadline. Don’t act rashly!
3- Not diversifying
When you get into investment, you will read over and over again that diversification is key. And do you want to know why? Because that’s the way it is. If you keep all your eggs in one basket and the basket, let’s say, falls… you will be left with no eggs. Now, if you diversify, you might lose some, but you will also keep some. The same thing happens with investment. If you put all your money in one place, you are more likely to lose it if there is a drop in the market.
4- Getting greedy
Being an investor is one thing. Being a speculator is a whole different thing. Once you start making money with your investment decisions, you need to stay focused on your long-term goal and tune out all the rest. Talk to people you trust.