This week, we’re busting myths about investing, so you’ll be better equipped to think rationally and make smarter decisions about how you invest your money for retirement.
Today’s myth is: “You Must Be Savvy and Understand the markets to be successful.”
Buzzer! Wrong!
Unfortunately, personal finance topics like saving, investing, and avoiding debt, are scantily covered in school. Even if you have a bachelor’s or master’s degree, you probably entered adulthood woefully ill-prepared to properly manage your money.
You’ve surely made some mistakes with your money along the way, and hopefully somewhere along the way, you figured things out. And you obviously care enough about educating yourself and making smart decisions with your money, otherwise you wouldn’t be here listening to me blather on day after day.
Most financial advisors, like myself, would likely tell you that success at investing and managing your money well isn’t about what you know. It’s about your habits.
Habits like consistently saving, investing in your 401k in good times and bad, and paying off your credit card balance in full every month. Most of what it takes to be successful has nothing to do with understanding whether or not Facebook or Apple stock is a good buy right now. You don’t have to be a savvy stock picker, because you can hire that out to someone else (whether that’s a financial advisor, or a fund company like a mutual fund or ETF to pick the stocks for you).
Too many people lack confidence in their own knowledge and abilities and are intimidated by investing, so they stay out of stocks all together or don’t fully participate in the 401k plan offered at work.
I’m still understanding the markets and there's a lot I do not know. And not only did I study this stuff in school. I’ve been doing it day in and day out for over a decade. And I still am humbled by what I don’t know and still have to learn. So don’t let a lack of knowledge keep you from trusting the incredible long-term wealth building engine that the stock market has proven itself to be.
That’s it for today, Thanks for listening!
Tomorrow, come on back, because I’m going to tackle the most common investing myth I hear: Investing in the stock market is just like gambling.
My name is Ashley Micciche and this is the One Minute Retirement Tip.
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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing myths, savvy investor, how to invest in stocks, how to start investing in stocks, investing 101, investing in stocks 101, how to invest in stocks for beginners, wealth management