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3 Mistakes to avoid as a Beginner Investor

Jun 09, 2024

Hello Stoic Investors,

Today I want to share with you 3 mistakes I made as a beginner investor that cost me $62,000.

 

By avoiding these three mistakes, you can improve your investment strategy and avoid losing money.

Investing is a long journey, and learning from others' mistakes can help you succeed!

 

Mistake Number 1: Not Using Tax-Advantaged Accounts

One big mistake was not using tax-advantaged accounts.

It doesn't matter how much money you make if you end up giving a lot of it to the government in taxes.

 

Learn about the tax rules in your country and find ways to pay less taxes.

 

Here are some tax-advantaged accounts to consider:

United States: Roth IRA

United Kingdom: Stocks and Shares ISA

France: PEA (Plan d'Épargne en Actions)

Australia: Superannuation

Canada: TFSA (Tax-Free Savings Account)

Germany: Riester-Rente or Rürup-Rente

Japan: NISA (Nippon Individual Savings Account)

 

These accounts can help you keep more of your investment gains.

 

Mistake Number 2: Not Balancing High-Risk Investments with Safer Ones

Early on, I put too much money into high-risk stocks, hoping for big returns.

But not all stocks recover after going down.

Sometimes, you can lose your money for good.

 

For example, I once invested heavily in a new tech company that seemed promising.

When the company didn't perform well, I lost most of that investment.

 

To avoid this, balance your investments.

Don't put all your money into high-risk options.

 

I now use a 60-40 split:

I put 60% of my money in safer investments and 40% in high-risk ones.

Safe investing is often better in the long run.

 

Mistake Number 3: Not Contributing Regularly to My Investments

I also failed to invest regularly.

Think of your investment contributions like paying rent—you wouldn’t skip a month.

Be consistent with your investing.

 

For example, I used to invest a large amount one month and then skip several months.

This inconsistency hurt my overall returns.

 

Let's say you invest $500 every month.

With regular contributions you can harness the power of Compound Interest.

Your investments can grow significantly over time.

If you invest $500 every month for 20 years with an average annual return of 7%, you would end up with

about $260,000.

 

That’s the power of consistent investing and compound interest!

 

So, Note down these three key-points and start investing today:

1.Use a Tax-Advantaged accounts: Learn about the tax rules in your country and find ways to pay

less tax.

2.Balance high-risk investments with safer ones: Allocate 60% of your money in safer investments

and 40% in high-risk ones.

3.Contribute regularly to your investments: In this way, your investments can grow significantly over time.


 

See you again next week.

 

Whenever you're ready, here is how I can help you:

1. Take advantage of all our Free Resources and start your journey as Stoic Investor 

2. Book a Free Consultation to ask your investing questions and we will point you in the right direction

3. Watch hundreds of Video Testimonials of Stoic Money Clients from 25 different countries

About Me

I am Vittorio Rigato, the Investing Coach behind Stoic Money.

I invested for more than 8 years, both for myself and by managing the 7-figures retirement account of my family.

After my¬†Master Degree in¬†Finance & Management,¬†I worked in the FinTech industry in Frankfurt (Germany) and managed financial products with value up to ‚ā¨100 Millions.

In 2021 I have founded Stoic Money to teach employees and professionals worldwide how to invest to reach $1,000,000 Net Worth and beyond. Many of them reviewed Stoic Money service with a video testimonial here.

Multiple Finance News Websites like Yahoo Finance and Euronews talked about Stoic Money mission and services.

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