Investing is not a familiar topic for many people. And I see so many beginner investors wanting to get it right.
And I completely understand this because you want to make sure you don’t do something silly with your hard earned money, and that it’s invested in the right place.
But this need to get it right quite often can be a hindrance as much as a help. That’s why today I wanted to share the 4 most common reasons beginner investors fail.
1. Waiting for the perfect time
Many beginner investors lack the confidence to invest. They are waiting for the perfect time to enter the market. The problem is, nobody rings a bell when the market is at the bottom. Meanwhile, their fear of making a mistake can cost them more than getting into the market.
The good news is, long term value investing is more forgiving on mistakes. As Warren Buffet says, time is more important than timing.
2. Waiting until they know enough
There is an unlimited amount of information to learn about any investment vehicle. You will never know it all. Many beginners research for months or years on end but never take action.
Just realise that you don't need to know it all. What you do need is a clear set of steps and guidelines to copy that gets results.
3. Not taking advice from successful people
When the market is hot, many sources will give you stock tips. You should only take advice from the most credible source, not the loudest one.
This means listening only to people that have been there and done it themselves. This means NOT listening to well-meaning family members or friends (unless they are successful investors or are telling you advice they got from a successful investor).
Warren Buffet once said: “wealth is the transfer of money from the impatient to the patient.”
Successful investing is more like a marathon, not a sprint. But impatient people want unrealistic returns in months or a couple years. In chasing the quick dollar, they miss out on the millions of dollars they could earn through consistent compounding over time.
Also, impatient people change strategies looking for the next silver bullet. Any strategy takes time.
Read more about: Wealth