Once you finally get a sense of your career and other life decisions, there’s a new realm of unfamiliar territory you might be entering in your 20s/30s: investing.
I’ve seen how many who are new to investing in this stage of life are prone to learn some very expensive lessons. However, these potential snafus are generally avoidable and easy to navigate.
With that in mind, here are some common investing mistakes you need to avoid in your 20s and 30s:
Avoiding it all together
The combination of other responsibilities and the confusion of diving headfirst into investing leads many younger individuals to forego investing altogether. Even if you know investing is important, you might also procrastinate with the “I’ll do it later when I have more money” camp.
However, by avoiding investing altogether, you’re likely to join the expensive game of retirement catch up, and miss out on years of compound interest. In addition, although investing may seem complex, you can start in the shallow end. Speaking with a financial advisor or starting a 401k are great baby-steps towards a financially healthy life.
Not being consistent with your contributions
When it comes to retirement investments (such as a 401k or Roth IRA) that have limited contributions each year, many younger investors make the common investing mistakes of having sporadic contributions, and not taking full advantage of these accounts.
Although your 20s/30s might be a time when you have less wealth, you should realize that it’s also the best time to invest full-throttle into these accounts. A small amount stowed away now has the chance to become a giant nest egg by the time retirement rolls around.
A great solution (especially for those who are busy) is to automate your contributions. That way, you invest without even thinking about it. By setting a certain amount from you paycheck to go into your investment account, you’ll ensure that you make timely and consistent investments.
If you’d like to learn more about avoiding common investing mistakes, don’t hesitate to contact us today.