3 Mistakes to avoid as a Beginner Investor

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.