Alright, let’s talk about money, the thing that’s either fueling your latte habit or making you question why avocado toast costs $12. Young adulthood is a wild ride. You’re out here figuring out life, TikTok trends, and the mysterious art of adulting. But if there’s one thing Kevin Spain (a.k.a. the investing guru you wish you had in high school) wants you to nail, it’s avoiding rookie mistakes in investing. Trust me, you’ll thank him when you’re sipping mojitos on a beach at 40 instead of stressing over credit card debt.
Rookie Mistake 1: Thinking You Need to Be Rich to Start Investing
Raise your hand if you’ve ever thought, “I’ll invest when I’m rich.” (Spoiler alert: If your hand isn’t up, you’re probably lying.) Kevin says this is mistake numero uno. You don’t need stacks of cash or a Wall Street pedigree to start investing. Even if you’ve got just $20, you’re in the game. Seriously, that’s like skipping two Postmates deliveries or saying no to a concert ticket for once. Apps like Robinhood, Acorns, and Stash let you invest spare change. It’s not about the amount; it’s about building the habit.
Pro tip: Start with index funds. They’re like the avocado toast of investments: reliable, easy, and trendy (in a good way). You’re buying a slice of the market, which means less risk and more potential for those sweet, sweet gains.
Rookie Mistake 2: Trying to Time the Market (a.k.a. Psychic Wannabe Syndrome)
Here’s the deal: Unless your name is Nostradamus, you can’t predict the stock market. Yet so many rookie investors act like they can. Kevin Spain’s golden rule? Time in the market beats timing the market. Translation: Invest consistently, hold your investments, and let compound interest work its magic.
Let’s break it down. Imagine you put $50 into a stock every month starting at age 20. By the time you’re 40, that’s grown more than your roommate’s sourdough starter. Why? Compound interest. It’s basically free money that grows on top of your money. Trying to jump in and out of the market is like chasing trends in fashion, you’re going to miss the mark and waste cash.
Pro tip: Set up automatic contributions to your investment account. Out of sight, out of mind, and into the wealth-building zone.
Rookie Mistake 3: FOMO Investing
You see a meme about Dogecoin hitting the moon, and suddenly you’re ready to throw your life savings into it. Stop. Breathe. And maybe delete Twitter for a hot second. FOMO (fear of missing out) is a killer for newbie investors. Just because something’s trending doesn’t mean it’s a good idea.
Kevin’s advice? Do your homework. Investing isn’t about chasing the next big thing; it’s about patience and research. If you’re looking at a company or cryptocurrency, ask yourself: Does it have long-term potential? Is it something you understand? If not, walk away.
Pro tip: Follow the 90/10 rule. Put 90% of your money into safe, reliable investments (think ETFs or index funds) and 10% into riskier bets. That way, you’re not betting the farm on Elon Musk’s latest tweet.
Rookie Mistake 4: Ignoring Your Emergency Fund
Listen, life happens. Cars break down. Phones fall in toilets. Your best friend decides to have a destination wedding in Iceland. If all your money is tied up in investments, you’re going to be in trouble when the unexpected strikes.
Kevin’s rule of thumb: Before you even think about investing, build an emergency fund with at least three months’ worth of living expenses. It’s like a financial safety net for when Murphy’s Law decides to visit.
Pro tip: Keep your emergency fund in a high-yield savings account. That way, it earns interest while staying easily accessible.
Rookie Mistake 5: Not Understanding Fees
Fees are the sneaky villains of the investing world. They seem small, but over time, they’ll eat away at your returns like termites in a wooden house. Whether it’s account fees, trading fees, or expense ratios, you need to know what you’re paying for.
Kevin’s tip? Stick with low-cost investments. Index funds and ETFs usually have super low fees, and many apps now offer commission-free trades. Do a little digging before you hit “buy.” Your wallet will thank you.
Rookie Mistake 6: Thinking It’s Too Complicated
Last but not least, don’t psych yourself out. Investing can seem as complicated as deciphering your ex’s text messages, but it’s really not. Start small, keep learning, and don’t be afraid to make mistakes. Kevin Spain didn’t wake up an investing wizard. He started somewhere, made a few blunders, and kept going. You can do the same.
Pro tip: Read a book like “The Little Book of Common Sense Investing” by John C. Bogle or follow finance influencers who make investing fun (and legit). Knowledge is power, my friend.
Final Thoughts
So there you have it: six rookie mistakes to avoid, straight from Kevin Spain’s playbook. Remember, investing is a marathon, not a sprint. Start small, stay consistent, and don’t let FOMO or fancy jargon scare you away. You’ve got this, future mogul. Now go forth and conquer those financial goals, and maybe treat yourself to that latte while you’re at it.