Finance advising For New Investors | Common Investment Mistakes | Millionaire Financial Advice For 18-35-Year-Olds. 


First Mistake: Spending too much money


That’s why my #1 piece of advice, ESPECIALLY for anyone who’s 18 to 35 years old, is to SPEND LESS THAN YOU MAKE. I know, it might be common sense to you and me…but it’s not too common sense to a LOT of people. Especially when you consider that 40% of Americans couldn’t cover an unexpected $1000 emergency. So the EASIEST way to get out of that trap is to simply: track your spending and cut back on discretionary expenses.

Second Mistake: Getting Into Consumer Debt


I really believe that having ANY amount of unpaid consumer debt will grossly hinder your ability to build wealth in the future. So if at all possible, avoid consumer debt AT ALL COSTS…use it only as a LAST CASE RESORT if you literally won’t have food on the table, or there’s something that happens and there’s just no other option.


Third Mistake: Lifestyle inflation


This is the practice in which we make a little bit more money, and then we start spending just a little more each month. The biggest issue I’ve seen is that people get used to spending almost all the money they make, and when that happens…they almost DON’T KNOW what to do when they have money left over at the end of the month….so then, they just continue spending it. And that’s where the problem lies.

Fourth Mistake: No Emergency Fund


An emergency fund is money you set aside to ONLY be used in case of an emergency, where you have no other option to turn. Ideally, the size of this fund should equal anywhere from 3-6 months of your expenses, and kept easily accessible.




Fifth Mistake: Being Too Cautious About Credit With No Credit Card


Getting a credit card, and learning how to handle it responsibly, is so incredibly important to your financial future. Not only will a credit card provide purchase protection, rewards, or cash back throughout all of your purchases - but you’ll be continually improving your credit score, which will get you the best and lowest rates anytime you buy a property, finance a car, rent an apartment, or do ANYTHING that involves running your credit report. 

Sixth Mistake: Not Contributing To Your Retirement


For instance, the BEST time to contribute to a Roth IRA is when you’re young and not earning a ton of money…this is because you’re in a low tax bracket already, so you have more money left over, and your money has more time to grow. Or a 401K allows you to reduce your taxable income and postpone your tax bill until retirement…not to mention that sometimes employers will match your contribution, dollar for dollar, up to a certain amount. 


Seventh Tip:


Now is your time to absolutely pursue your career aspirations, work harder than you ever thought was possible, save every extra dollar you can. While sure, it’s fine every now and then to relax and have fun…stay disciplined, because if you play this right, you could use these your 20’s to accumulate enough investable assets to carry you forward for the rest of your life.


And during all of that, do your best to also focus on INCREASING your INCOME, just as EQUALLY as you are on SAVING IT. Sometimes people just can’t save enough money, and it’s not a fault of their savings or spending habits…it’s just the fact that they don’t earn enough in the first place. And when it all comes to investing…just keep it simple. Broad index funds are the easiest, simplest, and “safest” investments out there when held long term. Or, it’s as simple as spending a few hours a day on BiggerPockets and YouTube researching how to invest in real estate - going and checking out open houses on Sundays - and then eventually looking into purchasing some income property once you have your down payment saved up.



Investing doesn’t need to be complicated, budgeting doesn’t need to be difficult, it’s all about learning the right financial habits early on and then sticking with them long term - and you’ll be on your way to a ton of millennial money.

Avoid The Following 5 Common Investment Mistakes :


Finance advising For New Investors & Common Mistakes

It has happened to many of us at one time: You're at a cocktail party enjoying your drink with hors d'oeuvres and the "storm" is happening your way. You know you will be proud of the great "big deal." In the meantime, he has taken a long position at Ridgets Plus.com, the latest, largest online gadget market. He discovers that he knows nothing about the company, is still impressed with it, and has invested 25% of his portfolio when he hopes to double his money soon.


Despite your resistance to feeling driven, you start to feel comfortable and cared for knowing you have made at least four investment mistakes and hopefully this time you will learn your lesson. In addition to the four mistakes made by the community blowhard, this article will address four other common mistakes.

*1 "Not Understanding the Investment " 

One of the world's most successful investors, Warren Buffett, warns against investing in businesses you don't understand. This means that you should not buy stock in companies if you don't understand the types of business. The best way to avoid this is to create a diversified portfolio of mutual funds (ETFs) or mutual funds. When investing in each stock, make sure you fully understand each company the stock represents before investing.


"*2 Lack of Patience" 

How much of the energy for slow and steady development is very clear? It is slowly and steadily rising from the top - whether at the gym, at school, or at your workplace. Why then do we expect it to be different from investing? A slow, steady, and disciplined approach will go a long way in holding them longer than attending the "Hail Mary" final games. Expecting our portfolios to do something other than that is designed to make a recipe for disaster. This means that you have to keep your expectations realistic regarding the length, time, and maturity that will come with each stock.


"*3 Attempting Market Timing"


 Season 3. Market, the evil cousin of evil, also kills the comeback. Successful timing in the market is very difficult to do. Even institutional investors sometimes fail to do so successfully. The well-known study, "Determinants Of Portfolio Performance" (Financial Analysts, 1986), conducted by Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower include the restoration of pension funds in the United States. The study showed that, on average, about 94% of the variance in returns over time is explained by the investment policy decision.1 In terms of the keeper's terms, this indicates that, in general, most portfolio returns can be explained by asset allocation. the decisions you make, not the time or the choice of security.


   

Finance advising For New Investors & Common Mistakes


"*4 Failing to Diversify"


Effective investors can generate an alpha (or return a benchmark) by investing in a few integrated positions, ordinary investors should not try to do this. Stick to the principle of diversity. In building a portfolio of ETFs or mutual funds, remember to allocate exposure to all major gaps. In building each portfolio of shares, allocate to all major sectors. As a general rule of thumb, do not exceed 5% to 10% of any single investment.


"*5 Letting Your Emotions Rule"


Perhaps the No.1 killer of refunds is your feelings. The axiom that fear and greed dominate the market is true. Don't let fear or greed overtake you. Focus on the big picture. Stock market returns may be short-lived, but in the long run, historical returns on capital stocks can yield 10%. Note that, in the long run, your portfolio's portfolio should not deviate significantly from those ratios. In fact, you can benefit from the ridiculous decisions of other investors.


Finance advising For New Investors & Common Mistakes



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