Putting off investing until later in life
FotograFFF/Shutterstock Why it’s a mistake: People who start to invest earlier in life are not only taking proactive steps toward a stable future, but also cashing in on time, which is investing’s best friend, says Nick Holeman, a certified financial planner at Betterment, an online financial advisory firm. “The younger you start investing, the more you can reap the benefits of compounding and long-term market gains,” he says.
What to do instead: If you’ve missed the boat on early-in-life investing, don’t stress. Instead, start by paying off any outstanding high-interest debts, such as credit card debt. “Then, work out how much you can afford to invest,” Holeman says. “This will differ depending on your age and salary, but what is important is that you get in the game. Trim the fat from your budget wherever possible, decide what you can spare, then set up auto-deposit to start building your portfolio.” Try these genius money-saving tips from self-made millionaires.
Assuming you need a lot of money to invest
hfng/Shutterstock Why it’s a mistake: If you don’t feel like you’re flush enough to invest your money, you’re ultimately losing in the long run, says Steve Dorval, head of digital advice at saving and investing app Twine. “In reality, how often do we receive large sums of money at once? Relying on a yearly tax return, holiday bonus, or birthday gift to reach financial goals will delay crossing the finish the line,” he says.
What to do instead: Save in smaller, consistent amounts—it’s more successful and far more predictable. Remember: A lot of companies will let you get started with as little as $50, Dorval adds. Get the ball rolling with these 56 money-saving tips you can use today.