One thing we all have in common is that we make mistakes. Maybe you made the mistake of taking back your ex or picking a fight with the biggest guy at the bar. These are pretty punishing mistakes but if you ask me, the worst mistakes relate to your money. However, no matter what the mistake, the key is that we learn from our errors and move forward and as such here are five investing mistakes I wish I knew when I started that you can use to make better financial decisions!
Mistake #1: Trying to invest like big money investors
No matter who you are, we all look up to others and want to emulate their actions. For me, I grew up playing hockey and would pretend I was my favourite player when I hit the ice. For others, they may want to grow up to be their favourite movie star or musician. Needless to say we all draw influence from those we look up to however when it comes to investing this isn’t always the best move to make.
You see, just like we look up to athletes and celebrities, those in the investing world tend to observe and often mimic investing efforts of those with the deepest pockets. It’s for this reason that people follow investing magnates like Warren Buffett and Ray Dalio so closely. They want to emulate these two men’s success and see their own financial wealth grow over time. Now, in many circumstances, emulating the actions of those who have succeeded before us makes a ton of sense but when it comes to investing, you need to tread carefully. Let me share with you the issue I ran into trying to invest like my financial role models and what approach I now take instead that has yielded me greater financial returns.
When I started to get serious about investing 5 years ago, I knew that I lacked the knowledge it would take to make wise investing decisions and as such I did what any millennial would do when they need to learn something: I watched YouTube. In fact, I began watching a ton of content around investing and over time I started to notice that most of these creators were heavily into individual stock investing and as such I followed suit. I began buying single stocks hoping to cash in on the same kinds of returns I was seeing the people I follow enjoy.