5 Investing Myths Stopping You From Building Wealth

Investing is a key component to building your wealth, and achieving financial freedom.

Making money is one thing, but keeping it, and multiplying it, is another.

Putting your money to work for you is imperative to avoiding inflation.

But, the problem for most people, is that investing isn’t something that a lot of people know about.

It still has a ton of myths and misconceptions that are stopping people from investing their money.

So, I’m debunking the 5 biggest investment myths, so you can start investing your money without stress or confusion.

1. You Need A Lot of Money To Invest

Of course, you need some money to start.

But, to think that you need a lot, say $10,000, couldn’t be further from the truth.

In fact, some investment accounts like eToro let you invest with as little as $10 per deposit.

Investing isn’t only for the rich, or the old. It’s for everyone, including you.

Even in 2023, people delay investing because they think they need more money to invest. Not true.

Why wait until you have $10,000 or $20,000 saved up to start investing, when you could be multiplying whatever amount you have right now?

In fact, seasoned investors will tell you that it’s actually better to dollar cost average small amounts over time, rather than a big sum all at once.

So, if anyone’s telling you that you need more money to start investing, they’re lying to you.

You can get started with only a few dollars in 2023, and in a few clicks, you’ll be an investor.

This’ll help some of you get through the door.

2. Investing Is Too Risky

If I hear someone say this one more time I’m going to… nevermind.

Of course, there are some risks to investing.

The bottom line is that you might end up losing money, but with a little bit of preparation, you can avoid losses.

When a lot of people think of investing, they think of one thing, and that’s stocks.

Individual companies that you can buy ownership of.

But, the problem is, stocks are too risky for the average person, who doesn’t have the time to keep up to date with current affairs.

But, there’s a solution to this, and the solution lies in what are known as ETFs.

An ETF, or exchange traded fund, is a stock market fund which tracks a much wider range of investments, like:

• Small cap stocks.

• Dividend stocks.

• Growth stocks.

• Or a global index like the S&P 500.

The benefit of these assets is that you’re removing 90% of the risk, through diversification.

These ETFs are managed by professionals, and filter out all of the bad investments for you.

The S&P 500 for example, which tracks the 500 best performing US stocks, is an ETF that is constantly changing what stocks it’s made up of.

But as for us investors, we don’t have to lift a finger, and can enjoy healthy returns, whilst doing no work.

Sure, there’s still some risk involved, but think about this.

When inflation is high, and consumer prices are soaring, what’s the bigger risk?

Investing into ETFs, or keeping cash?

Ask any successful investor.

You’ll soon be at a point where the bigger risk is actually, not investing.

3. You Need A Lot of Time for Research

Many people, possibly including you, think you need to spend hours…

• Researching companies

• Reading financial statements

• Watching the news

…in order to be a successful investor.

It’s simply not true, and like I said in the point before, ETFs makes this point completely obsolete.

ETFs solve this problem for you, and make investing as easy as buying something off amazon.

No, seriously. It’s that easy.

The two elements that will help you succeed as an investor, are:

• Time

• Patience

• Not work, timing, or anything else. Time, and patience.

Time is your greatest friend when it comes to investing, but so few people acknowledge this.

If you’re smart, and set up an automatic direct debit to invest, you won’t need to spend any time at all on investing, and in truth, this is exactly how investing should be.

You’re making your money work for you, not the other way around.

4. You’re Too Young/Old to Invest

I’ve heard countless times from my friends that they’re too young to worry about money, or investing for their future.

This may be true to an extent, but being young and having the ability to invest regularly, can put you at an insane advantage to a lot of people your age.

Why not take advantage of it?

The one thing you can benefit from as a new investor is to understand the power of compound interest.

Remember when I said that time would be your greatest asset?

Well, here’s what I mean.

Compound interest occurs when your investments generate returns over time, and you continue to reinvest the returns, slowly building a continuously growing investment portfolio for you to generate returns from.

Overtime, your money will begin to take on the snowball effect, as it continues to grow and generate returns.

Even starting to invest a few years later than everyone else could set you back hundreds of thousands of dollars, because you missed out on compounding your money that little bit more.

I’d even argue that the most important thing when investing, isn’t how much you’re investing.

It’s how long you’re investing for.

Embrace the long term mindset, and start investing as early as you can, so you get the maximum rewards from your money.

5. You Need to Time The Market to Succeed

Sure, the general aim of investing is to buy low and sell high.

But, mastering the skill of timing the market is something you don’t need. In truth, it’s something that could even prevent you from generating the best returns possible.

Like I said earlier, to succeed, you need to be in it for the long run, and being in it for the long run doesn’t include spending hours constantly trying to buy and sell.

That’s what we call trading, and this is dangerous territory for beginners like yourself.

You’ll start to rack up large costs via transaction fees, and there’s no guarantee you’ll even make a profit.

The last thing you want to be doing is investing your time into trading, only to be losing money, and this is all too common.

There’s no need to stress over trying to time the market, especially when you have the mindset of being invested for years, rather than weeks.

Stick to a regular investing schedule, say weekly or monthly, and leave your investments alone.

Investing is a way to make your money work for you.

You don’t need to invest your time, to succeed in the world of investing.

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