About investing, let’s talk about a few of the most common investing mistakes that people make when it comes to the stock market and how to overcome them.
The first mistake that people make when investing and this is the biggest mistake of all if they just don’t understand the company they’re investing in
Charlie Munger and Warren Buffett and Manish provide guys fear great managers of money who managed to get enormous returns and do it the way, all have an area of the market that they get really good at they call it their circle of competence and those guys stay well within that circle because they know they need to understand the business that they’re buying.
Most people when they invest don’t even treat it like a business they just treat it like a piece of paper and they just hope that the price is right so you can’t begin to invest properly without first understanding the business.
The second mistake people make is they don’t have a plan on how to invest
They just basically go out and start putting money into things they don’t understand. They don’t know how much money they’re going to need to retire and they don’t know how much time it’s going to take them to get there for any given set of returns that they expect to make, so they’re just basically flying completely blind.
They don’t know how to figure out that kind of retirement requirements that you’re going to have depended on how much money you’re starting with how much money you can put in every year and the rate of return that you can reasonably expect to get.
The third investing mistake that people tend to make is they just don’t have enough time they haven’t given them self enough time.
Really really easy to get to a good retirement if you start early enough but we never do right we always have a million other things we’re going to use that money for, it seems like we never make enough money when we’re starting to have kids and by the time the kids start to go to college we still don’t have enough money so it’s like we never catch up with it.
You got to follow this advice to put away a little bit of money for yourself all the time pay you first and get going on it right away. Now the good news is even if you’re starting extremely late you’re 55 you’re 60 or 65 and you don’t have enough of a nest egg to retire comfortably on the good news is that doing rule 1 style and dusting and being aggressive with it can still get you where you want to go I started with a thousand dollars and I got to 1.45 million dollars in just five years so it’s never too late.
The fourth investing mistake people make is buying stocks based on tips from experts, what?
When you buy stocks based on tip from other people you’re going to a company that now most inevitably you don’t understand almost inevitably you don’t know what it’s worth and almost inevitably you end up with a bad rate of return and this is just a bad habit people have of being lazy or from just not having a clue on how you deva glia a company in the first place now.
This isn’t to say that getting a little tip from an expert is a bad idea all by itself because if you know how to analyze a company noticing that Warren Buffett is buying it might be a really cool thing you get in there figure out why he’s buying it maybe you can buy right along with him which could be a really good thing but never just take somebody at their word.
Fits investing mistake people make is vine stocks that appear really cheap but they aren’t really cheap actually now this is a really common mistake especially when the market drops a lot. You’ll see people saying that this stock is on sale because it used to be at 100 and now it’s at 50 what they don’t realize is that when it was at 100 he was massively overpriced, Chipotle Mexican grill is a great example of that right now.
So those are the most common investing Mistakes. If above is helpful and you thought it might be valuable then share this who might benefit from.