Is the dating scene a little too daunting to face right now? You’re not alone. Whether it’s because of contagious layoffs, social distancing requirements, or generally low morale due to COVID-19, lots of people have been avoiding romantic entanglements in the last few years. So if you’re feeling embarrassed about your decision to step back from dating, or you’re confused why your friends are—we’ve compiled a list of the top things that might make a person take an extra-long break from the world of love.
1. You’ve Had Your Trust Broken
One user shared, “Just ending a 12-year relationship when my wife passed. Found out by looking through her phone that she had a bunch of relationships with men throughout our years together, both online-only relationships and in-person relationships. I had no clue because I trusted her completely. It makes me feel like I can never trust another partner once I get through the healing process.”
One user exclaimed, “Dude. What. The. Fudge.”
Another added, “Dude, just the combo of how angry and betrayed you’d feel, with the guilt over the feelings cause she’s dead.”
One Redditor sympathized, “I am SO sorry.”
The OP answered, “Thanks, it’s been a rough month.”
2. You’re Near Burnout
One Redditor posted, “Broke and tired.”
Another user commented with a pun, “Broken and tired for me.”
“Yeah, I’m gonna go with all three on this one. Broken, broken, and tired. Pill addiction doesn’t help, either. Don’t want to bring another person into my chaos right now; that person deserves better,” one commenter agreed.
Another commenter added, “You deserve better, too.”
3. You Want to Grow First
One commenter added, “Require more self-growth. I don’t know if I can trust myself to not go into people-pleasing mode rather than asserting my needs and boundaries and ending up in another years-long relationship with someone I just am not into.”
Another Redditor responded, “This is so very relatable.”
4. You’re Working Through Things
One user said, “I’m not dating because I’m currently undateable. I have some serious issues that I’m working on.”
Another user commented, “Good for you for working on yourself instead of desperately hunting for someone to distract from the problems.”
“Love this,” one commenter added.
One user asked, “What kind of issues? I know that’s a personal question, but I wonder what people mean when they say that.”
The OP replied, “It’s ok to ask. I’m on chemo, for one. I’m also fairly depressed and anxious.”
Another user shared, “I quit my job to take care of my mom who went into hospice… She passed away from cancer. My elderly father, who was destroyed by the whole thing, caught pneumonia, influenza, and covid a few months after… spent months in the hospital, and I’ve been nursing him back to health since discharge… where my wife divorced me and took our kid away.
“All this in a span of a year. I am unemployed, recently divorced, and taking care of my 90yo father while living in my deceased mother’s basement. I am working through serious issues. I am undateable.”
However, one user commented, “You know, for people who are taking care of their parents and loved ones: Please don’t think just because you may not have the energy and space to be present in a relationship right now means you’re undateable. I think it’s very noble to be caring for your parents (if I do say so myself.)
“If you haven’t already, join our/AgingParents. It’s tough, and reading about others going through the same is helpful. Edit: I forgot a few words.”
4. You’re Tired of Online Dating
One user said, “The fact that I have to endlessly scroll and go through the Tinder/Bumble/Hinge dance to connect with someone. I think we’re all tired of it.”
Another user responded, “I finally deactivated my profile a few months ago, and don’t miss it at all. I had been in the cycle of deleting the apps and redownloading a few days later for a long time because there was always that FOMO of ‘maybe I got a new match,’ but now I’ve taken that away. In the last few years, it’s really started to feel like they purposefully make the apps barely work unless you pay, and even when I have paid for a month here and there, I’ve never had much luck. Just preying on desperate lonely people for our data and money.
“I haven’t really dated anyone I’ve met in real life in a long time, but I’m just gonna keep living my life, and if someone comes along, that’s great. The apps are an emotional and energetic drain for seemingly little payoff.”
Another Redditor added, “I actually had a moment of weakness last month and paid for Tinder, Hinge, and Plenty of Fish all at once. Just one month, but still, it wasn’t cheap. Wanna know what I got from it? Zilch. Waste of damn money. Yes, I can see who liked me. Guess what? Bots. All bots. Once the month is out, I am deleting all of those apps. I’ll keep the Facebook dating thing going since it is free, but I don’t expect much from it.
“It’s so unnatural to try to force a conversation with someone you didn’t meet organically. My plan going forward is going to be to try to meet people through my hobbies and volunteering work. It might work, and it might not. But at least I won’t feel like I am trying to force anything unnaturally.”
5. You Don’t Like the Available Options
One frustrated Redditor said, “The dating pool needs chlorine.”
Another user commented, “Indeed. And I’ve learned to avoid the shallow end.”
“My thoughts exactly,” a third user confirmed.
6. You Have Bad Relationship Habits to Break
“Relationship me is the worst me,” one user commented.
One user replied, “Real talk… I get obsessive, extra moody, and clingy. Single me lets things go a lot more easily & pours my energy into objectively productive & healthy things.”
Another added, “Don’t forget to be anxious when they don’t respond to texts fast enough. I’m so much more at peace on my own.”
One Redditor user joked, “Hi! Don’t call me out like this. Thanks!”
7. You Don’t Think You’re Likeable
“I feel like no one I like will truly like me back,” one user shared.
One user replied, “I used to feel like this. Then I met my ex’s mom. She was so nuts but deeply loved by her husband, and now I always think ‘if she can find it, why not me.’”
Another added, “The first two sentences had me thinking it was going to go in a different direction.”
One user commented, “Yup. This, too. Every person I like isn’t interested.”
8. You Don’t Have the Energy
One Redditor posted, “The dating scene is so demanding. Ugh, I don’t have the energy for anyone like that anymore.”
Another added, “I agree. I don’t have the energy.”
Another user joked, “You two should date.”
9. You Want Commitment
A user commented, “Lack of options for serious monogamy.”
One replied, “Hell yeah. Nowadays, being 25 and looking forward to a serious relationship that hopefully will grow into marriage is almost shunned. Like I’m not damaged goods or inferior because I want a proper relationship instead of being a [f- boy].”
“I feel that… so many are into polygamy these days. While that’s a perfectly valid way to live, that is not my way. I prefer to know every bit about my special person… all their moods and quirks… I feel it gets difficult to appreciate when more than one person is in the mix… even if only casually… but again, that’s just me,” another user responded.
10. You Don’t Like Small Talk
One user posted, “I can’t go from, ‘What’s this thing on my back’ back to ‘What’s your favorite color?’”
Another replied, “Yes. This is it right here. It takes me so damn long to truly let go and say goodbye to that closeness. And when I finally do heal, grieve, and move on, I just can’t fathom starting back at square one again with a whole new person. I honestly don’t know how people cycle so quickly from one relationship to the next. I love pretty deeply and just can’t keep starting over. It feels unnatural.”
One user also commented, “They bottle everything up and tell themselves they are fine. That’s how.”
“This is so relatable; thank you for giving a great example!” replied another commenter.
11. You Lost the One You Loved
“The person I loved died. I doubt I’ll find anyone as wonderful as she was again,” one user commented.
Another user replied, “I’m sorry. I hope you have a delicious meal in the next 48 hours.”
The OP answered, “I’m having one right now, in fact. Thank you for your kind words.”
12. You Keep Finding the Wrong People
One Redditor commented, “Amazing connections with the wrong people, the pain that comes after it doesn’t work out.”
13. You’re Depressed
One Redditor added, “Depression makes me isolate myself.”
Another user replied, “Yep, I have it, and after my last boyfriend and some of the stuff he said… I think I’m better off by myself, so I don’t bother anyone or worry about certain stuff.”
One Redditor added, “Depression can make you believe your only choices are crappy partners or no partner. I was stuck in that place for a decade. Don’t listen to your glitching brain. It lies to you.”
14. You Don’t Feel Like Yourself Around Others
One user shared, “I haven’t met a guy that makes me feel like I can be myself around him.”
Another replied, “I’m always curious when I hear this. What part of yourself do you feel is stifled around guys? This is said a lot by both men and women, so there’s obviously something to it.”
One commenter added, “When it comes to your interests and personality, people who seem to have specific expectations of what you should be like or people who judge you when you express yourself or the things you like. Last year I was dating someone and chose not to share things that made me excited because I worried he’d look down on them or tease me for them.
“But also, more positively, there are just some people that you connect with easily and that make you feel super comfortable. Someone could be a wonderful person, but not right for you because you don’t click in that way and feel like yourself with them.”
15. You Think You’re Too Strange
“I have too many quirks and weirdnesses. I’m sure there is someone out there who would be interested, but the amount of effort it would take to find them is just way too much work for limited gain,” one Redditor posted.
Another commenter seconded, “This! And just being understood in general, especially when you’re ‘weird’ or ‘complex.’ Reaching even a quarter way with someone who seems like they get you, but then THEY do/say something to show you that they actually can’t deal, and having to restart with someone else is too exhausting and can make it all seem pointless.”
One user commented, “This is how I feel sometimes. I used to think that I might be too complicated for therapy, but since I started actually going to therapy, I feel like I’m not as complicated or weird as I thought. Maybe I’ve just been too harsh on myself and forget that a lot of people are just as, if not more, weird and quirky as me. Maybe I’ve been too anxious about meeting people and need to stop overthinking and just get out there.”
Do you agree with this list? Share your thoughts and leave your comments below.
Source: Reddit.
These are 10 Things That Completely Destroyed The Love in a Relationship
There’s no question that relationships can be confusing, but here are some of the top things to avoid if you want to keep your relationship healthy!
10 Actors and Actresses People Refuse to Watch Ever Again
We all have a favorite actor or actress, but most of us have a least-favorite as well. Check out this list of actors and actresses people never want to see performing again!
Top 10 Worst Human Inventions of All Time
Some inventions are world-changing, and some of them, well, they change the world in the wrong ways. Here are some of the worst inventions Redditors could think of.
10 Famous Celebrities Who Look Like They Smell Terrible
We’ve all had moments of hygiene faux pas—but these celebrities just look like they don’t take care of themselves at all.
10 Terrible Fads People Are Glad Died Out
Every fad has its time in the limelight, but some of them come and go faster than others; and some just need to die out right away. Check out this list of fads of which people were happy to see the last.
Beyonce and Jay Z were recently in San Francisco on their On The Run tour, but you knew that because you went. We, apparently, were the only ones in the entire city who DIDN’T go and oh, we felt the sting. While everyone was jammin’ to “Drunk in Love” we were stuck in the left over concert traffic only to be proceeded by an equally monotonous night. And to top off a serious case of Tuesday night FOMO, if the rumors are true, the power couple is headed for the dreaded “D” word and we just. can’t. handle. it.
So in honor of Queen Bey and Jay, we rounded up our favorite surfboard inspirations, or should we say surfbort inspirations? We’ve been seeing these dudes everywhere, from decor to editorials and we can only believe that it was partly Beyonce’s doing. After all, she runs the world, right? On her surfbort.
We’re in love with the idea of surfboards as decor, especially when they’re not your typical “surf’s up, bro” board. A gorgeous blond wood with a vintage-inspired shape is so cool leaning against a blank wall and the Gray Malin photography infused board is literally a work of art. Obsessed.
Speaking of art, fashion and interior designers have definitely received the surf delivered memo. We can’t decide if we’d rather break waves on Kelly Wearstler’s beautifully crafted wooden boards or Alexander Wang’s marble beauties. Probably Kelly’s, right? Marble sinks- in the literal sense of the word only!
And just in case you’re planning to ride this trend as long as we are, we present a surfbort moodbort. <– We had to!
Have you caught the surfboard wave too? Or are you ready for this trend to crash and break? Us? Oh, we’re prepared to ride this baby till the final days of summer are gone! —Bianca
image 1 via Home Adore // 2 via Fast Co. // 3 via One Kings Lane // 4 via Kelly Wearstler // 5 via Alexander Wang // moodboard images via
By rich, I don’t mean she takes selfies on private planes. Rather, she’s achieved a level of comfort and freedom that most sensible people are striving for.
Carol lives in a nice place in the safe part of town, donates generously to charity, and spends more of her time on her passions and hobbies than on work. Her bank account balance has two commas in it, and she hasn’t really worried about money since Barack Obama held a senate seat.
Carol’s neighbors in the “Whole Foods-y” part of town are mostly lawyers, CEOs, and even a few movie stars hiding from the paparazzi. There’s even a Bitcoin zillionaire living somewhere above her, trading crypto all day and “sucking up the building’s power” she jokes.
But Carol is none of these things. In fact, she’s never made more than $60,000 a year. Instead of scaling some corporate ladder or selling a tech company, she somehow got rich just by rotating pretty normal job roles for 35 years. At some point on her career carousel, she’s been a teacher, accountant, and secretary.
So how exactly did Carol get rich? Inheritance? Luck? Buying 1,000 shares of TSLA in 2011?
When I asked her (we have that kind of blunt relationship), her tone was so mundane and matter-of-fact that you’d think she was giving me the time of day:
“Get rich slowly, hun!”
Wait, what does that mean? How can you get rich and achieve lasting comfort and freedom without selling a company or winning the lottery? Why is Carol’s method of “getting rich slow” so effective, and how can you pull it off?
In this piece, I’m going to teach you how totally normal people like Carol get rich (and you can, too). Without further ado, let’s investigate how the rich get rich (and you can, too).
What’s Ahead:
Defining “rich” to avoid a common trap
There are two types of rich people: happy rich people and unhappy rich people. The key to becoming a happy rich person is to establish your “why.”
Why do you want to get rich? After all, a seven-figure bank statement is just numbers on a screen. What do you want to do with the money?
Well, you probably want to get rich so that you can buy something.
Some people want to get rich so that they can buy something with a price tag, like a mantis green Lamborghini Huracán or a six-bedroom house. But chances are that if you’re reading Money Under 30, you’re probably more interested in something more enduring and conceptual, like freedom, comfort, safety, health, or the most valuable asset of all: time.
If you think about it, everything I just listed is a currency. You have a “balance” of each, and you exchange them back and forth all day like a personal stock exchange.
For example, when you go to work, you trade 8-10 hours of time for one day’s salary. Conversely, when you take an Uber to the airport instead of the bus, you trade $31 to save an hour of time.
For a good visual of these intangible currencies, I like to look at Maslow’s Hierarchy of Needs.
Photo credit: SimplePsychology.org
On a conscious or subconscious level, most people try to get rich so that they can take care of all of their basic needs. Naturally, they take care of their physiological needs first (shelter, food, etc.), and then keep earning to cover “safety” needs (paying off debt, health insurance, etc.).
However, level three of the pyramid is where happy and unhappy rich people tend to diverge.
Unhappy rich people keep earning piles of money and forget to convert it to needs. Although they could work a little less to spend time with family or developing their passions, they choose not to. Over time, they even give up their safety needs, working so hard that it negatively impacts their health. With heavy money bags weighing them down, they end up tumbling back down the pyramid.
The whole point of getting rich is so that you can take care of your needs, all the way from sheltering yourself to finding purpose and achieving self-actualization.
If the act of getting rich makes you miserable, what’s the point?
I enlisted the help of Varun Marneni, an advisor with Atlanta’s CPC Advisors and Raymond James Financial Services. At 31 years old, Varun is 23 years younger than the average wealth advisor in America and is passionate about making an impact on people by helping them navigate the complexities of their finances.
How to not end up rich and depressed
Happy rich people like Carol never lose sight of why they wanted to get rich: namely, to achieve freedom.
“Remember – your goal isn’t to get ‘rich’ – it’s to become financially independent” says Varun. “After a certain point, it’s time to stop trading your other needs for money, and reverse the flow. Money can (and should) buy freedom, which in turn can facilitate love, belonging, esteem, health, and self-actualization. Besides, giving up your mental health to get rich is counterproductive. Unhealthiness can affect your ability to perform, be a good person, and even make money. The simple fact is that it’s easier to get rich when you’re happy along the way.”
So how can you get rich without giving up your needs along the way? Well, let’s look at the options.
4 ways the rich get rich
In his decade-plus studying wealth-builders, Varun has seen four general ways the rich get rich. He also has an easy recommendation for the method you should use.
Let’s analyze the four most common methods to getting rich.
Method 1: save and invest
“Get rich slowly, hun!” Carol said, matter-of-factly.
Then, she silently returned to the task of fetching two Key Lime Pie LaCroixs from the fridge.
I, on the other hand, was bubbling up with questions like a shaken champagne bottle. I asked her to elaborate and mentally cleared my calendar for a four-hour coaching session. But before she could even sit, she’d already given me her entire strategy:
“I’ve saved and invested 20% of my income since I was your age.”
But… what did you invest in, I zealously inquired?
“Oh, hun, I don’t invest any of my own money. I let Andrew [her financial advisor] do it.”
In addition to her 401(k), Carol had opened an investment account in her mid-20s, contributing as much of her paycheck as possible to it while her financial advisor managed it. They set a medium-risk portfolio, and she let it mature for years.
So… that’s it? The secret to getting rich without working 12 hours a day or betting the farm on Bitcoin is to open an investment account, keep adding to it, and… wait?
“Pretty much, yeah,” Varun says.
Carol’s not just some lucky outlier, either. According to Thomas C. Corley, author of the Rich Habits series of books, roughly half of rich Americans are just average earners who saved and “prudently invested” 20% of their income for decades. No CEO salary, no crypto bets, just smart money management.
Prudent investments could be hands-on like real estate, but for most low-key rich folks, it was just depositing into an investment account managed by someone else.
So if this method is so effective, and totally normal people get rich that way, it begs the question why nobody talks about it.
Method 2: high-risk investing
Carol’s neighbor, “the Bitcoin zillionaire,”, is 29. Rumor has it that he bought thousands of bitcoins when they traded at $2 a pop, which would’ve been around November of 2011. At the time of this writing (early 2021), a single bitcoin is worth $50,000.
Stories like that create a pretty potent sense of FOMO. A few clicks and he never had to break out his resume ever again. Sigh.
But if you truly want to subject yourself to FOMO Central, look no further than r/wallstreetbets, the now-infamous subreddit for retail aka amateur investors.
“WSB” is full of 22-year-old millionaires proudly showcasing their skyrocketing portfolios after having bet the farm on individual stocks.
But if it seems too good to be true, it probably is. Such is the case with r/WSB. “This isn’t investing; it’s gambling” warns Varun.
Even if you do get lucky once, amateur day trading simply isn’t a path to sustainable long-term wealth. “Sure, you can make a 100% return on a stock – but how are you going to do that month after month?”
Method 3: earn a high salary
This method to getting rich is to work your fanny off. You can become a partner at Deloitte, for example, and make $355,000 on average (according to Glassdoor). And that’s chump change compared to your bonuses, retirement benefits, and stock options.
However, the path to becoming a partner at Deloitte isn’t short, easy, or even guaranteed. It takes more than a decade of sterling work, plus a chest full of medals and the universal approval of your clients and colleagues.
The sky-high bar for entry is why only out of 113,000 Deloitte employees, fewer than 1,000 ever reach the level of partner.
Attaining a high-salaried position is a surefire way to get rich, but it can be extremely difficult to juggle your work and your needs. In most roles earning $250,000+, you’ll end up trading most of your time and freedom: the two currencies that are the hardest to buy back.
Even getting there can take a lot of time and freedom. All of Glassdoor’s top 25 highest-paying jobs “require many years of advanced education [or] years of experience gained over time.”
Of course, there are plenty of people working high-salaried roles who love their jobs and have a great work-life balance. But it’s not the norm, and getting to that point can take decades.
Method 4: inherit wealth (or privilege)
In 2019, when Forbes announced Kylie Jenner as the youngest self-made billionaire ever, we all responded with the world’s largest collective eye-roll.
Sure, she’d built a profitable makeup and modeling empire, and claims that her parents had cut her off at 15, but was she really on an equal footing to the rest of us, as the title implies?
Certainly not, because even if she didn’t inherit cash, she did inherit her parents’ platform, network, and financial guidance; all worth way more than a lump sum.
The Forbes/Kylie Jenner drama serves to highlight a common way the rich get rich and stay rich: through the passing down of cash and assets, but also platforms, privilege, and financial guidance.
You may or may not inherit wealth in the traditional sense, and it’s safer to assume that you won’t. According to CNBC, over 70% of young people expect an inheritance, but only 40% of their parents plan to give one.
But that doesn’t mean inheritance is totally out as a way to get rich. If your folks have done well for themselves, you can ask them for other forms of inheritance, such as advice and connections. For example, if your parents are financially independent, chances are they have a great financial advisor helping them who would gladly have a complimentary planning session with you.
Overall, however, inheritance isn’t really a viable or predictable way to get rich.
What’s next?
Here’s why nobody talks about the easiest way to get rich
Getting rich slowly is the most simple and straightforward way to get rich in this country. So why does nobody talk about it?
Well, here’s my theory:
Getting rich slowly is boring as hell
How would you react to this headline?
“She saved 20% of her income for 30 years, and now she’s rich!”
You’d probably think ummm… duh? And that’s the whole point! Getting rich slowly, the way half of rich people did it, isn’t headline-worthy at all. It’s boring. Martin Scorcese simply isn’t making movies about investors who build wealth over decades of safe investing.
Getting rich slowly isn’t glamorous, either. In fact, most people who look rich are in debt. Those Instagram influencers dangling Bentley keys and Prada bags in their followers’ faces are most likely in deep financial trouble. 96% of YouTubers make under $15k per year, and as one former influencer with 340k followers confessed, “I’ve walked a red carpet with $80 in my bank account.”
“Most people who are actually rich look and act pretty normal,” says Varun. They shop at Publix, drive eight-year-old Acuras, and live in homes just big enough for them and their loved ones. “Rich people don’t buy into the ‘rich people lifestyle’ because it costs money that they’d rather invest.”
There’s nothing wrong with buying fancy things, especially if they support your needs like comfort, health, or esteem. I “invested” in an old Lexus because of its low True Cost to Own®. Likewise, my friend Amanda bought a Burberry coat because it’s well-made, long-lasting, and it simply makes her happy.
But “slow rich” people never feel the need to prove how rich they are. They get rich precisely because they don’t buy into the glamorous lifestyle.
Like vampires, truly rich people are among us, hiding in plain sight. It can be hard, then, to spot one and ask them for advice.
Thankfully, we have Varun and Carol to set us up.
How to get rich without becoming a CEO or winning the lottery
Saving and investing 20% of your income is an essential part of getting rich, but it’s only part of the picture.
“The path to financial independence is like a chair. There are four legs, and if one is too short or missing, the chair topples over.”
So, what are the other three legs to getting rich slowly?
1. “Squeeze the lemon”
As Varun puts it, “squeezing the lemon” is maximizing your existing money through:
Tax efficiency.
Patching leaks.
What I’m about to share may sound obvious, but “9 out of 10 people don’t squeeze the lemon, and it needlessly delays their financial goals.”
Tax efficiency
Tax efficiency, not to be confused with tax evasion, is simply making sure you’re not paying more taxes than necessary.
A big part of tax efficiency is filing your taxes accurately and on time. Any tax software that helps you maximize deductions, such as those for Home Office and charitable donations, is great.
Another way to become tax efficient, specific to 1099 folks, is to funnel your income through an LLC. This will slash your self-employment taxes and provide some bankruptcy protection. If you own a business with more than one employee, I recommend consulting with a tax attorney for more ways to be tax-efficient, since there are too many to list here. A phone call could save you thousands.
Lastly, always be sure to take advantage of your various retirement plans offered through employers such as 401(k)s or IRAs and Roth IRAs.
“Many employers offer 401(k) matching and it’s important to at least put enough money in to take advantage of that,” says Varun.
So that’s tax efficiency: simply making sure you’re not giving Uncle Sam freebies.
As a first step to getting rich, I strongly recommend you consolidate all of your financial information into a single dashboard. Getting a holistic picture of all of your accounts in one place is a huge stress-reliever and helps you find unpleasant “gotchas” like hidden charges and disused subscriptions.
Once you squeeze the lemon to save money, the next step is to multiply it.
2. Save and invest
Thomas C. Corley says the secret to sustainable wealth is “prudent investing.” What exactly does that mean? Are you going to have to get your Series 7 and start trading?
Not at all. In fact, it’s better if you don’t. Prudent investing just means responsible investing, and there’s nothing more responsible than letting a trained professional invest for you.
Carol has never personally traded a stock in her life.
Use a financial advisor
Human financial advisors typically charge a 1% management fee, which includes comprehensive wealth management solutions, soup to nuts. Think guidance on buying or selling a business, retirement planning, education funding help, insurance advice, and estate planning.
Use robo-advisor options
Robo-advisors typically charge 0.30%. The tradeoff is that they may not offer a human touch or personalized financial planning advice. But once you set some goals and risk parameters, they’ll manage your money for you, 24/7, for less.
Whether you opt for a real-life or AI-driven financial advisor, the important thing is that you invest. A pile of money in your checking account is just losing value due to inflation.
If you can’t afford to invest 20% of your paycheck, start with 5% and work your way up. Squeeze the lemon harder and pool that money into your investment accounts.
Invest your credit card rewards
Another great source of investment capital is your credit card rewards points. Oftentimes this is cash you didn’t even realize you had, so you might as well invest it!
A solid, “investor-friendly” card option is the Chase Sapphire Preferred® Card. It offers 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases, so you can quickly accumulate points and dump them straight into your investment account.
Lastly, don’t panic and pull out your investments
Prudent investing isn’t just about putting money in; it’s about leaving it in. When markets dip or accounts lose value, people tend to panic-pull, and it’s almost always a mistake.
Per Varun:
“the most difficult thing to do in investing is disentangling personal emotions from logic and tuning out the media. The so-called pundits will always give you 100 reasons why times have never been scarier and why you shouldn’t be investing and they are usually incorrect. 1968 was a difficult year for our country with the assassination of Martin Luther King, Robert Kennedy, War in Vietnam and the highly contentious election. Since then, we have had wars, 9/11, impeachments, tariffs, COVID 19 more recently and so much more. Despite all of this, the Dow Jones Index marched from 906 in 1968 to 32,000 as of this writing”
Daily market news can challenge your investment discipline. Their messages are often meant to stir anxiety about the future and your finances.
But as Varun says, “successful investors look beyond the headlines, have a long-term approach, and follow certain time-tested principles such as diversification and suitable asset location.”
3. Protect yourself from bankruptcy
Once you’ve begun investing money, it’s time to protect it. You don’t want bankruptcy to saw off a leg on your chair!
Earlier, I mentioned a critical form of bankruptcy protection for self-employed folks: routing payments through an LLC. Having an LLC as a “middleman” is important because it means anyone paying you has to sue the LLC first before suing you personally, reducing your liability.
However, lawsuits aren’t the most common source of bankruptcy in this country. Not even close.
“The #1 source of personal bankruptcy in America medical debt.”
If you can afford it, good health insurance will help insulate you from bankruptcy. But staying healthy itself is a key component of getting rich. Running, meditating, doing yoga, and eating healthy don’t just create happiness – they’re part of getting rich. “Healthy people are less likely to end up in the ER, and they work more effectively and make better decisions.”
4. Enjoy the journey
Varun doesn’t want you to live like a pauper while you slowly get rich. In fact, getting rich slowly should be extremely enjoyable and fulfilling.
But what are rich people spending money on, if not Aston Martins?
“Rich people buy experiences, not things.”
Science overwhelmingly supports the idea that experiences make us happier than things. Plus, they’re often cheaper. That’s why most low-key rich people have come to the same conclusion:
Experiences are a good investment. Remember that happy rich people reinvest their capital into their needs. They realize that experiences provide more freedom, esteem, love, and belonging than most things can, so that’s what they choose to spend on.
Part of what makes experiences such a great investment is that the happiness you glean from experiences is infinitely renewable. Here’s some advice that Varun often offers his clients:
“In 10 years, you’ll remember the time you spent in Hawaii. You’ll remember who you were with, the laughter you shared, the experiences you had. You won’t remember what kind of watch you were wearing.”
Unlike an Aston Martin, experiences are affordable even while you’re getting rich and won’t delay your goals. Even after you put 20% of your paycheck into an investment account, you’ll probably still have enough cash left over for a pair of tickets to that funky new museum or a one-night AirBnB stay in the mountains.
Plus, experiences are less susceptible to hedonic adaptation, which drives our tendency to want to upgrade our things every few years. For example, even if you buy a brand new phone and a fast new car today, eventually you’ll get bored of both and want to pay for an upgrade. But a $20 ticket to a concert will always be fun, and never go out of style.
Even before hedonic adaptation can kick in, Varun warns of another expensive psychological trap many fall into: the Diderot Effect. In his essay “Regrets on Parting with My Old Dressing Gown,” Denis Diderot, an 18th-century French philosopher, describes how his fancy robe made his closet look cheap. So he upgraded his closet, but that made his room look cheap. Upgrading his room made his house look cheap, and before he knew it, he sat bankrupt in a mansion.
Experiences may drive the desire to have more experiences, but they don’t necessarily have to be more expensive ones. Furthermore, those experiences will help grow you as a person, provide companionship, and support your mental health.
Things are awesome, but experiences are a more cost-effective way to feel joy while you accumulate wealth.
“Getting rich slowly won’t feel slow if you’re enjoying the journey.”
Take these steps today to start getting rich
Before I wrap up, what smart moves can you make in the next 30 minutes to start getting rich?
Start unfollowing fake rich people
Fake rich people on Instagram are fun to watch, but they can create FOMO and encourage bad buying decisions. They are “influencers,” after all.
Instead, Varun strongly recommends that you “surround yourself with people who have financial discipline.”
Break the ice with your friends about financial planning, swap advice, and try to cultivate a sphere of positive influence. To prevent awkwardness, talk about how you’re investing, not how much. I have a few friends that I regularly talk to about financial planning, and it helps the process feel social, validating, and fun.
Patch the leaks in your accounts
If you haven’t already, head to your online banking dashboard and spend a few minutes browsing through all of your transactions from the last month. If there are any recurring charges you don’t recognize or don’t need, cancel them.
If you cancel $25 worth of subscriptions today, that’s $10,000 you might’ve wasted over 30 years. If you invest that $25 per month instead, it can create $15,000 in 30 years. That’s a delta in your net worth of $25,000, all accomplished in a few clicks.
Open an investment account
To get rich by investing, you don’t have to pick a single stock yourself. Again, it’s actually better if you don’t. What a wonderful world we live in where “lazy portfolios” exist as one of the best ways to build wealth.
Once you’ve opened an investment account and set goals and risk parameters, your final (but critical) step is to set up monthly auto-deposits of 20% of your paycheck (or however much you can afford).
Then, you’ll start getting rich in your sleep.
Summary
Investing 20% of your income for 30 years is a proven method that roughly half of rich Americans used to achieve financial independence. It’s boring but it works.
If you’re intimidated by the prospect of investing, that’s all the more reason to let a professional do it for you, human or otherwise. You can open an investment account and set up auto deposits in just a few minutes, and your future self will let out a massive sigh of relief when you do.
As you’re making money in your sleep, remember that truly rich people don’t buy into “the rich lifestyle.” Don’t be seduced by designer bags or meme stocks on r/wallstreetbets. If your method of getting rich feels slow and boring, you’re doing it right!
While the method to getting rich slowly might be boring, the journey should be anything but. “Investing” in experiences, passions, and relationships along the way will set you up to be a happy rich person; martyrdom to work is not necessary.
Enjoy the journey, and for more on saving and investing, stick with Money Under 30.
Underwriting, LOS, Appraisal Tools, Broker and Automation Products; Freddie and Fannie News; Housing Starts Skyrocket
<meta name="smartbanner:author" content="We now have a native iPhone and Android app. Download the NEW APP”>
This website requires Javascrip to run properly.
Underwriting, LOS, Appraisal Tools, Broker and Automation Products; Freddie and Fannie News; Housing Starts Skyrocket
By: Rob Chrisman
Tue, Jun 20 2023, 9:40 AM
I am fortunate to travel around some (no, I am not on the missing Titanic tourist submarine, nor personally shepherding the new Credit Trigger Bill in MA), and am in the Bay Area to give a speech on the eve of the Summer Solstice, and am reminded of the passage of time and how my skill sets have become outdated. I can refold a map correctly, unknot curly telephone wire to get all the curls facing the right way, and can cover a textbook with a brown paper bag. I know how to write in cursive. But I don’t know why cars don’t need to warm up anymore, or why my cell phone doesn’t work in the guest bedroom. I barely understand how electricity actually works, aside from my Mom telling me not to poke my fork in the electrical wall outlet. But others have a better grasp of it, and it’s a great time to be one of the 1.032 million electricians in America, the most ever, and LOs pay attention to changes in demographics and job markets. Electricians’ pay has skyrocketed, averaging $37.51 per hour for an annual wage of around $78,000, a 7.8 percent year-over-year increase. A boom in the housing market plus the passage of the Inflation Reduction Act in 2022 (which steers $369 billion to beefing up energy infrastructure) is driving the golden age of electricians. (Today’s podcast can be found here and this week’s is sponsored by MCT and its Hedge Advisory division. Download their recently released whitepaper, Mortgage Pipeline Hedging 101, for more information on hedging in today’s market. Today’s includes an interview with MCT’s Andrew Rhodes on secondary market happenings in the current rate environment and the importance of loan sale automation.)
Broker and Lender Services, Products, and Software
National Homeownership Month means new opportunities for your business. June is National Homeownership Month and ICE Mortgage Technology® is sharing resources all month long to help mortgage professionals put more people into homes. Did you know, according to their 2023 Borrower Insights Survey, fewer than one in 10 borrowers wanted a fully digital experience? By leveraging mortgage automation, you can streamline the previously manual steps that slowed your team down, and ensure they have time to deliver the high touch experience your borrowers are looking for. Click here to learn how ICE Mortgage Technology can partner with you to streamline the various steps in the mortgage process.
It’s industry belief that transferring your loans to a new subservicer is slow, risky, and just too scary to even try. As a result, most originators have FOMO (Fear of Moving On), but Servbank clients found there was no need to fear the move because Servbank has the loan transfer process down to a science. They handle dozens of client transfers per year, with a fully assisted, stress-tested transfer process that is entirely transparent. Once aboard, all loans get the same compassionate, compliant servicing that has turned Servbank into one of the nation’s Top 10 Subservicers. But the proof isn’t in the claims, it’s in the numbers. In April 2023, Servbank efficiently transferred 175,000 loans timely, with imperceptible disruption to the customers or their existing clients. So, if you have a FOMO from your current servicer, let Servbank share all the details with you on how they can make transferring your loans a seamless and worry-free process that will enhance your brand and improve your bottom line. Ready to learn more? Visit here.
“AFR Wholesale® (AFR) is incredibly honored and blessed to be providing homeownership for over 25 years. As a leading manufactured home lender amongst wholesalers and to be a leading FHA 203k lender for sponsored originations and an innovator in construction and renovation lending, AFR is steadfast in providing more homeownership opportunities to more families. AFR wants to teach the masses how to leverage programs such HomeOne®, Home Possible®, Home Ready®, and a full suite of other lending products to help diversify your lending toolkit. You still have time to join! We invite you on June 21st at 2 PM EST. to join AFR and special guests from Fannie Mae to learn about HomeReady® and how to leverage this program. Register Today! This is a live webinar and will not be recorded, so sign up today and don’t miss it! Contact AFR by going to afrwholesale.com, email [email protected] (1-800-375-6071).”
“One of the ways Xactus is serving to innovate and innovating to serve is with its powerful residential and commercial appraisal valuation management technology, Appraisal FirewallX. It shortens appraisal times and lets you manage your own appraisal process. Appraisal FirewallX also improves efficiency because it is integrated with numerous LOS systems such as Encompass by ICE Mortgage Technology. Cambridge Savings Bank has been using Appraisal FirewallX since it launched Encompass in 2017 and it has enabled the Cambridge team to maintain partnerships with its approved appraisers and move away from a very inefficient manual process to a highly automated one. It considers Appraisal FirewallX’s customer service to be top notch too. In fact, it’s one of Cambridge’s top vendor relationships. See how this innovative technology solution can improve your appraisal process and how Xactus is advancing the modern mortgage. Email us for a demo.”
Integrated LOS and POS systems are essential to creating the quick, easy, and fully digital mortgage application process that today’s borrowers expect. Learn how MeridianLink® Mortgage LOS is leading the charge toward better borrower experiences in its recent ebook on the importance of integrated systems in creating an automated online application process from start to finish.
Cover your staff’s time off with Maxwell’s on-demand underwriting. As a mortgage professional, you know the value of an uninterrupted workflow. Maxwell Fulfillment services empowers you to seamlessly maintain your operations while your team enjoys time off this summer (and beyond). With direct integrations to your LOS, our experienced onshore team of underwriters provides a seamless, fast, and cost-effective experience. To learn more about Maxwell’s on-demand underwriting or other fulfillment services, click here or schedule a call today.
Freddie and Fannie Updates
The two Agencies, under the guidance of the FHFA, continue making the changes that the industry keeps following, given 60-70 percent of production follows their processing and underwriting guidelines. This includes the increasing issue of climate change.
The Federal Housing Finance Agency (FHFA) issued its 2022 Report to Congress. The statutorily required report provides information about FHFA’s 2022 examinations of Fannie Mae, Freddie Mac (the Enterprises), Common Securitization Solutions (CSS), the 11 Federal Home Loan Banks (FHLBanks), and the FHLBanks’ Office of Finance.
Of note, the FHFA increased its efforts to address the climate-related risks faced by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The agency’s latest annual report to Congress outlined the progress made by FHFA’s eight climate-focused working groups.
Fannie Mae’s Appraiser Update June 2023 edition focuses on certain appraisal quality issues and share examples of ways they identify and mitigate the resulting risks. Also, several recent appraisal-related policy changes and the Uniform Appraisal Dataset (UAD) and Forms Redesign project are discussed.
Fannie Mae implemented 2023 area median incomes (AMIs) in Desktop Underwriter® (DU®), Loan Delivery, and the Area Median Income Lookup Tool. There was a 7.73 percent average increase for 2023, meaning more borrowers may meet AMI requirements. AMI is also used to determine eligibility for certain loan-level price adjustment (LLPA) waivers. Lenders may use this information to determine income eligibility for HomeReady® and other loans with AMI requirements.
PennyMac Announcement 23-44: Freddie Mac Bulletin 2023-11 Credit Underwriting Updates.
Fifth Third Correspondent Lending Communiqué edition 2023-5-6.16.23 provides information on Agency and FHA Products Temporary Buydowns, Investment Property QM Points and Fees, Long Term Lock Updates.
With SEL-2023-04, Fannie Mae announced multiple Selling Guide changes, including updated requirements related to shared equity and shared appreciation, subordinate financing, and alternatives for tax filing documentation. View AmeriHome Mortgage Announcement 20230511-CL for details.
Pennymac is aligning with Freddie Mac’s selling guide updates on property appraisals and condominium projects. Updates are listed in Announcement 23-41: Freddie Mac Bulletin 2023-9 Property Appraisals and Condominium Project Updates and are effective immediately.
PennyMac posted Announcement 23-43: Updates to Conventional LLPAs. Pennymac updated Conventional LLPAs effective for all Best Efforts Commitments taken on or after Tuesday, June 13, 2023. The “Purchase Special” will improve by 0.10 for loan balances <= $175,000.
Citizens Correspondent National Bulletin 2023-13 includes information on Conventional Conforming Product and All Product Updates. See the bulletin for additional information and all lock, delivery, and purchase by dates, if required.
Of course, the private mortgage insurance companies, like Arch, Enact, Essent Guaranty, MGIC, National Mortgage Insurance, and Radian, are very interested in anything that the Agencies are up to or impact their business. Seth Appleton, President of U.S. Mortgage Insurers (USMI), released a statement on the U.S. Senate Reintroduction of The Middle-Class Mortgage Insurance Premium Act of 2023 sponsored by Senators Maggie Hassan (D-NH) and Thom Tillis (R-NC).
Capital Markets:
Okay class, let’s review. Our Federal Reserve (the “Central Bank”) doesn’t want to be seen as weak on fighting inflation. We learned last week that consumer prices rose 0.1 percent in May, in line with many analysts’ expectations. Year over year numbers are always rolling, dropping off the one 13 months ago. Sure enough, over the last year, prices were up 4.0 percent versus 4.9 percent in April. This marks the lowest annual inflation reading in over two years. Are we having a “soft landing?”
Shelter costs continue to buoy the headline number, however rental prices have moderated significantly from last year’s large increases. Consumer expectations for future inflation also fell to their lowest since March 2021. Meanwhile, the Federal Open Market Committee kept the Fed Funds Rate steady at a range of 5.00 – 5.25 percent following its June meeting. While this was in line with expectations, the dot plot released following the meeting indicates the committee still feels more tightening is appropriate this year. Officials continue to reinforce their expectations for rates to remain elevated for longer than some analysts’ forecasts. Employment and housing remain significant headwinds to inflation subsiding to levels where the Fed would consider declaring an end to the current tighter policy cycle.
After yesterday’s holiday, markets resumed today with Philadelphia Fed non-manufacturing figure for June (-16.6), as well as May housing starts and building permits (+21.7 and +5.2 percent, respectively, an enormous jump). Two Fed speakers are currently scheduled, St. Louis President Bullard and New York President Williams. The bond market, and therefore interest rates, begins the trading week little changed from last Friday: the 10-year is yielding 3.75 after closing last week at 3.77 percent, the 2-year at 4.71, and Agency MBS prices unchanged.
Employment
Nations Lending Continues Growth with Highest Ever Rank on Scotsman Guide! Nations Lending has once again been recognized by Scotsman Guide as one of the Top Mortgage Lenders in America. The company secured the 42nd position on the 2023 list, which was based on its impressive volume of nearly $3 billion. This marks the eighth consecutive year that Nations has been included in the ranking. Over the last few months, the company has introduced a slew of new products and improvements that have seen immediate success. This includes the RIO, a Nations investor-product-focused on generational wealth for investors with simplified qualifications, a temporary buydown solution for the Jumbo product line, giving Nations an advantage in promoting payment solutions in the early years of the loan, enhancements to its agency product line-up with lowered FICO scores to 500 for FHA/VA loans, and focusing on a borrowers Positive Rent Payment History for borrowers that are past tenants. Any IMB interested in joining Nations can reach out to John Owens.
“Who onboarded over $1B producing LO’s in May-June? Who won a Regional HW Tech100 Award? Who made the Scotsman Top Lenders list …again? Who made 2023 National Mortgage News Best Mortgage Companies to work for? Who was the 4th fastest growing company Inc Regionals Rocky Mountain Region? Who developed a highly efficient proprietary LOS that allows LOs to do more volume with less effort? Who has a business model that is sustainably good and profitable in any market? …heard enough yet? Join us and we’ll revolutionize the mortgage industry together. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.”
“Are you frustrated as a retail loan officer or mortgage banker with the lack of flexibility to provide custom loan options? Take control: follow the lead of an estimated 24,000 MLOs like you who have joined the wholesale channel in the last year. Whether you open your own independent mortgage brokerage or join a team as a loan officer, you’ll have the ability to provide your clients with the personalized solutions they need. Contact our team at BeAMortgageBroker.com today and you’ll be well on your way to a more fulfilling tomorrow.”
Download our mobile app to get alerts for Rob Chrisman’s Commentary.
Share via Social Media:
All social media shares will include the image and link to this page.
According to the FTC, Americans have lost $610 million to “income illusions” since 2016 – and $150 million of that was in the first nine months of 2020 alone.
Predatory get-rich-quick schemes have become so audacious, so prevalent that the federal government has launched a full-scale operation targeting them: Operation Income Illusion.
So what are all the modern scams and schemes that young people should look out for? How can you spot the especially sneaky ones? What are the early warning signs of a bad online business course or a phony job listing?
And how can you convince that one relative of yours that they’re in an MLM?
Let’s cover this and more as we explore modern get-rich-quick schemes (and how to spot them).
What’s Ahead:
Common signs of a get-rich-quick scheme
Before we get into specifics, it’s worth pointing out some of the most common signs of any get-rich-quick scheme:
A promise or guarantee of income.
Payment requested upfront to cover supplies/training/application fees.
Sketchy websites or email addresses.
Zero online reviews or ratings.
Hyperbolic marketing language (achieve your dreams, become your own boss, etc.).
The perfect opportunity somehow found you (instead of the other way around).
A request for sensitive info: credit card info, SSN, or a photo of your passport/ID.
They give you a bad gut feeling. When you have a bad gut feeling about a person in real life, you walk away. Do the same online.
1. Cryptocurrency
Ah, crypto.
Perhaps no other investment in history has produced as much FOMO as Bitcoin. After all, everybody knows of somebody who got rich off of it, or alternatively, some rare altcoin (read: any crypto that isn’t Bitcoin) that exploded overnight.
It would be an overreach to call cryptocurrency a scam, but it’s certainly not the investor gravy train it’s made out to be.
Read more: The Top 10 Things You Need To Know About Bitcoin
What they promise
A $10,000 investment in Bitcoin in 2017 became $640,000 just four years later. Invest your money and buckle up, because you’re about to get rich.
Or, alternatively, keep your eyes on the crypto forums. If you get in on the ground floor of a new crypto before it explodes, that’s another easy way to 100x your investment overnight.
What really happens
A $10,000 investment in Bitcoin in November, 2021 would be worth $6,175.36 in February 2022.
Cryptocurrency values are 100% speculation, upheld by investor demand alone. There’s simply no guarantee (or even near-guarantee) that your investment will grow in value in the short- or long-term.
That’s especially true of new or obscure “altcoins” that trade for pennies a pop. Sure, a small percentage of them may blow up – but many more are simply scams or pump-and-dump schemes – and it’s extremely difficult to detect which is which.
Read more: From High Risk To High Cost: Why You Shouldn’t Buy Bitcoin
How to spot a crypto scam
Any crypto that promises to multiply in value is a scam. Again, the only thing propping up crypto values is investor interest, which is fickle, fleeting, and unpredictable.
Bitcoin, Ethereum, and other bonafide cryptos aren’t scams, but they’re ultra-risky investments nonetheless. For more on why, check out Crypto Crash Course – Everything You Need To Know About Bitcoin, Blockchain, And More.
2. Multi-level marketing schemes
MLMs are notorious for using psychology and manipulation to lure unsuspecting income-seekers into their midst. Then, they squeeze capital out of them on the dangling promise of eventually multiplying their returns.
Now that John Oliver and others have shone a light on the industry, the MLMs have had to get even sneakier.
What they promise
Join [Herbalife, Amway, Infinitus] and you’ll become your own boss, get free training, and earn six figures in your first year!
Who doesn’t want to become their own CEO for a small initial investment of just $150, especially when you can make 1000x within 10 months!
What really happens
99% of MLM participants lose money, according to the Consumer Awareness Institute. Anyone appearing like they’re making money from an MLM on social media is simply trying to dupe others into distributing for them.
How to spot an MLM scheme
If you’re wondering whether the sales opportunity you’re considering is part of an MLM, or you’re trying to convince someone that they’re in an MLM, here are a few steps that you can take:
See if it’s already a known MLM. TitleMax (of all places) published a helpful list of the top 25 MLMs by revenue. If your future “employer” is on the list, take a hard pass.
Search for complaints about the company. Reddit, The Better Business Bureau, and your state Attorney General’s office website are all helpful places to find consumer ratings, reviews, and official complaints.
Vet the products. MLMs tend to sell sketchy products with dubious or unsubstantiated research proving their efficacy. If you wouldn’t buy the product, you definitely shouldn’t sell it.
ID the “startup fee”. If a company has a flat fee for upfront training or especially your first round of inventory, it’s most likely an MLM.
Get a second opinion. Ask the company to provide all of its contracts and legal documents, and have a friend, mentor, or your attorney look over everything with a skeptical eye. Don’t try to convince them it’s legit; ask them to convince you that it’s an MLM.
3. The lottery
There’s no more open and honest get-rich-quick scheme than the lottery!
Playing the lotto in tiny doses can be fun when you expect to lose. My better half and I buy a ticket or two per year and fantasize about how we’ll fill our 20-car garage.
Then we lose and laugh.
But playing the lottery with even the faintest expectation that your investment will eventually pay off is a slippery slope – both financially and psychologically.
Read more: Why You Should Never Play The Lottery – And How To Better Spend Your Money
What they promise
Whether it’s $10,000 or $10,000,000, you’re just a scratch away from winning life-changing money.
What really happens
It’s better to gamble your money in Vegas than to play the lottery.
I say that because generally speaking, you have a 5% to 30% chance of beating the house in a Vegas casino (WSJ). Your chances of winning the lottery are 1 in 300 million (CNBC).
But what about a non-jackpot? Can you profit from buying scratch-offs?
“Scratchies” typically list their odds of winning on the back of a card, usually between 5% and 20%. Your chances of winning something are better – but your chances of profiting are still extremely low.
Lotteries are also inherently problematic and controversial. Supporters say they benefit society by generating tax revenue – but it’s worth considering where that revenue is originating.
A mass study on the lottery’s net impact on society found that “the percentage of income spent on the lottery is significantly higher for players with low family incomes and low education,” hence the lottery’s ignominious nickname: “a tax on the poor.”
While it may be more transparent, make no mistake – the lottery is just as bad of a get-rich-quick scheme as an MLM (just with much worse odds).
4. Phony job listings
This one’s more of a straight-up scam than a scheme – and even as far as scams go, it’s pretty nefarious. FBI Special Agent, Jeanette Harper writes:
“Fake Job Scams have existed for a long time but technology has made this scam easier and more lucrative.”
What they promise
A supposed rep from a legit-looking company – or even one pretending to be from a company you’ve heard of – will reach out and say they’re hiring for a high-salary role.
They either say “no experience necessary” or that you’d be perfect for it, and since they want to fill the role right away, they’ll just do the interview via a chat window.
Before your start date for your high-salary role, they’ll need to add you to payroll and benefits – so you’ll need to pass along your W-9, 1099, and/or a scan of your ID.
What really happens
The scammer uses this sensitive information to steal your money and/or identity.
How to spot a phony job listing
Fake job opportunities are pretty insidious, but at least they’re pretty easy to spot. Here are some of the telltale signs:
The job listing appeared on social media (nearly all legit companies recruit via job boards, LinkedIn, or by referral only).
The rep’s email address doesn’t match the company name.
The company has no website/social media/LinkedIn presence (or a sketchy one).
The rep won’t reveal themselves – they won’t share their own personal data nor will they get on a video call with you – they insist on communicating via chat.
Everything they’re telling you seems oddly vague.
The interview process is moving oddly quickly – you’re accepted in minutes or hours, when the real-world process takes days or weeks.
The rep wants money – such as a $25 fee to submit your application.
5. COVID-era robocall scams
At the risk of sounding indelicate, the COVID-19 pandemic has created a target-rich environment for robocallers who peddle MLMs, phony jobs, or shady website building services.
To give an example, the FTC is going after scam company National Web Design for sending out millions of illegal robocalls specifically targeting people who’d just lost their jobs, guaranteeing them passive income if they just paid a little upfront.
I try not to use the term evil lightly…
What they promise
Here’s what National Web Design told its victims: you could earn up to $400 a day as an Amazon affiliate. Just let us build your site for $2,000 and your passive income awaits.
What really happens
The scammers may actually deliver a product, but it never works as advertised. You’re out $2,000 and they never pick up the phone.
How to spot a robocall scam
If someone calls you offering a job or passive income opportunity, it’s a scam. But don’t just hang up – report their call as spam on your phone and report the company to the FTC using this form.
BONUS: how to prevent robocalls in the first place
You can help stem the flow of robocalls to your own phone by adding your number to the official Do Not Call Registry. Don’t worry, it’s free and 100% legit.
The second thing you can do is to never, ever, ever give your phone to a business unless it’s essential to your wellbeing. Even companies that claim to “protect your privacy” will still sell your data to their partners (since it’s not a violation of their own privacy policy).
6. Bad online business courses
Here’s one that I fell for.
To my credit, it wasn’t named so blatantly – and I can tell that the instructor was being sincere in his advice – but it was still bad advice that I paid an embarrassing amount of money for.
Bad online courses always seem like good investments upfront. They’re taught by people who’ve “made it” in the industry and who promise to tell you all of their “best money-making secrets.”
They’re also sold to you at a weirdly high discount (e.g. 97% off) and sometimes, you even have to apply to be in the course.
But crappy online courses aren’t just dangerous due to high cost and missed expectations – they can teach you the wrong things that actually hinder your progress and take months to unlearn.
What they promise
Sellers of “How To Get Rich In XYZ Industry” courses promise exactly that – that you can make millions in a certain industry by simply following in the instructor’s footsteps.
What really happens
The advice you learn in an unaccredited online course can range from good to bad to downright toxic. And if you’re new to an industry, it can be hard to distinguish which is which.
You could be paying for advice that could win new clients – or immediately turn them off.
That’s why you’ll want to be extremely careful who you learn from. Some instructors truly are at the top of their industry and their tips are worth their weight in gold.
But others are on their way out – their way of doing things in their industry no longer works, so they’re packaging and selling bad and outdated advice to make up for lost income.
How to spot a bad online course
Part of the challenge to spotting bad online business courses is that they’re often marketed exceedingly well – so well, in fact, that if it’s a course in How To Make Millions Selling Bad Online Courses, maybe it’s worth it!
Facetiousness aside, here are some of the signs that the course you’re considering isn’t worth it:
The instructor has limited, outdated, or vague experience – e.g. they’ve “worked with dozens of Fortune 500 companies” but won’t say who, in what capacity, or how much they actually earned.
The course promises or downright guarantees income. No course can guarantee income, so that’s a huge red flag.
High-pressure sales tactics. If the vendor of an online business course gives you a short time window to decide, or says the price will increase in 13 hours, just shrug and hang up the phone.
No reviews or ratings. If the instructor can’t point to a single successful past student, that’s probably a sign that one doesn’t exist – and you won’t be the first.
A high price tag. Finally, if a 3-day “Mastermind” costs thousands of dollars, that could be a sign that the instructor values his or her advice. It could also mean that they need the money because their clients dried up.
7. Mystery shopper scams
Mystery shopping is when a restaurant, retailer, or third-party data company will hire you to go into a store or restaurant and report back on your experience. Mystery shoppers are often paid a flat fee per assignment, and sometimes even get the product/meal reimbursed, too.
From what I’ve heard, it’s a fun gig if you can get it. But since lots of folks are interested, the scammers are taking advantage.
What they promise
Mystery shopping scams often start with a text stating that you can earn $200 to $500 per assignment by becoming a secret/mystery shopper or “filling out a survey.”
All you have to do is visit a retail store, purchase a product or a gift card, send it to a specific address, and report on your experience. You’ll be compensated upon completion. Easy $500.
This may sound like an obvious scam, but in the victims’ defense, this isn’t too far removed from how legit mystery shopping works.
What really happens
In the case of the scam, you send the product or gift card and are never compensated. To rub salt on the wound, the scammer may sell or abuse the personal data you gave them.
How to spot a mystery shopping scam
Luckily, the Mystery Shopping Professional Association (MSPA) publishes a running list of all the mystery shopping scams they’ve seen.
If you don’t see the potential scam listed there, cross-reference it with their free online directory of legitimate mystery shopping companies.
Summary
To a pandemic-stricken society, get-rich-quick schemes are becoming harder to spot and more seductive all at once.
But by helping yourself and your loved ones avoid them, you can protect your money and ride out the storm.
NFTs or non-fungible tokens have gained a lot of momentum in the last few months. Whether it’s because of the digital art, the technology behind them, the money-making potential, or a simple case of FOMO, people can’t get enough of them.
Each day, we wake up to stories of artists and celebrities buying and selling NFTs for insane amounts. Case and point? Eminem recently shelled out 123.45 Ethereum (currently worth over $400K) for a Bored Ape NFT — and that’s not even the most expensive one in the market.
As someone who’s crawling herself out of student debt and on a budget, paying six figures for a digital asset is simply out of the question.
But are all NFTs that expensive? Or is there a way to start small?
I talked to NFT trader investor, consultant, advisor, and founder Ish Verduzco to find out, and, to my surprise, his answers were very promising.
What’s Ahead:
Do you have to be rich to invest in NFTs?
Last March, digital artist Mike Winkelmann, better known as “Beeple,” made headlines when an NFT of his work was sold for a record-breaking $69 million.
Then, we saw Snoop Dogg and Grimes buying and selling NFTs for six and seven figures, while Paris Hilton joined forces with Bill Ackman to back a $300 million NFT Foundation.
With figures like that, it’s easy to think that NFTs are some sort of exclusive investment that only the rich can afford. However, that couldn’t be further from the truth — at least that’s what both Verduzco and the data say. Verduzco says:
“Yes, there is some level of barrier to entry at the moment. But I wouldn’t say that they’re for the ultra-rich either…I think there’s an opportunity to get in.”
What makes NFTs more expensive than your average investment is that most of them are minted through smart contracts that live in the Ethereum blockchain, which Verduzco says is one of the most expensive ones, partly due to the gas fees.
Gas fees are basically the transaction fees of the Ethereum network. These fees are non-refundable, and must be charged to cover the costs of the energy used by the computers when validating and recording each NFT transaction. Verduzco says:
“To give you a very quick overview, it can cost like $50 to a few $100 just to transact, plus the cost of the NFT itself.”
So, how much money do you need to start investing in NFTs?
A recent study by Canadian concept artist Kimberly Parker, which analyzed public API data from sales on popular NFT marketplaces, like OpenSea, Nifty Gateway, Rarible, SuperRare, and MakersPlace, found that most NFTs are actually sold for under $200.
That’s right, you don’t need six figures — not even four figures, to own an NFT.
Verduzco says that a good amount to get started would be $500, which isn’t outrageous. After all, popular investment firms, like Wealthfront and E*TRADE, require minimum deposits of that same amount for you to start investing in their automated portfolios.
Read more: What Is An NFT? – How Nyan Cat Was Sold For $600,000
Why now may be a good time to get into NFTs
Many crypto and NFT experts — Verduzco included, think that the blockchain and smart contract technology behind NFTs will spread like wildfire across multiple industries, changing the world as we know it.
“It’s going to be integrated into almost everything we do,” Verduzco says.
“It’s not just going to be just art, it’s going to go into music, it’s going to go into film, it’s going to go into transacting things like deeds to houses, and anything that has to do with verification of ownership.”
Here’s a quick example of how this could work:
When you’re buying a house, the bank needs to make sure that the title is free and clear before closing on the loan. This process alone can take two weeks, and you’ll have to pay additional fees to the third-party company conducting the search.
But if the house was registered and sold as an NFT, for example, each transaction pertaining to that property would’ve been accounted for and recorded in the blockchain. So, clearing the title would only take a couple of hours instead of weeks, and you’d be able to get rid of the middleman and unnecessary fees.
Although the concept of NFTs is still in its early stages, Verduzco says that “it’s better to be ahead,” and — if possible — invest in it, so you learn the inner workings firsthand.
This will allow you “to spot more opportunities to make money, or find other people that are in this space who compliment your strengths and weaknesses in order to build projects based on needs.”
How to start investing in NFTs when you’re on a budget
As part of my convo with Verduzco, we bounced off some ideas on how you can get into the NFT game without breaking the bank. These are a few of them.
Read more: How To Create And Sell NFTs – The New Way To Sell Your Art
Explore NFT projects that use cheaper cryptocurrencies
If you visit OpenSea, which is currently the world’s largest NFT market, you’ll see that the vast majority of NFTs listed there use the Ethereum network (aka the most expensive NFT blockchain).
But just because most NFTs use this blockchain, that doesn’t mean that there aren’t other options.
Blockchains like Solana and Polygon (which was created as an efficient solution to the Ethereum network and is compatible with it) use cryptocurrencies that are much cheaper than ether, which is Ethereum’s currency.
Here’s an example:
At the moment this article was written, one SOL, which is Solana’s cryptocurrency, was worth $0.26, while one MATIC, which is Polygon’s cryptocurrency, was worth $2.13. But, if you wanted to purchase one ether, which is Ethereum’s cryptocurrency, you’d need $3,121.93 to do so.
So, yeah, there’s a huge difference there.
These alternative blockchains are also rising in popularity. JPMorgan recently released a report in which it states that the Ethereum blockchain is losing a chunk of its market share to Solana, as the blockchain is less congested (aka faster) and cheaper to invest in than Ethereum.
If you’re interested in buying NFT projects that use the Solana network, you can check out marketplaces like Solsea and Solanart, to find them.
When it comes to projects that use Polygon, you can find them just by visiting OpenSea. To see all the NFTs you can place bids on or buy using this network, simply click on the “Chains” option on the left panel, and select “Polygon.”
Mint a project
When you mint a project, you’re basically investing in it before it actually goes live. So, you could think of it as the Kickstarter of an NFT project. Verduzco says:
“The initial mint is usually like 0.05 Ethereum, which is a relatively small amount. If you happen to make it in that initial mint, then you pay only 0.05 Ethereum, versus if the project goes up in value, and then it costs 0.7, or much higher.”
One good example of an NFT project that is currently in its minting phase, and that I happen to like a lot is the Lucky Goat. You can currently mint this project for 0.0777 Ethereum ($243.43).
What has me rooting for the Lucky Goat (besides the art, of course) is that they donate some of their profits to Heifer International, which is a nonprofit whose mission is to help eradicate hunger and poverty.
So, how do you find projects to mint?
Twitter. If you enter “#mint” or “#NFT” on Twitter’s search bar, you’ll find countless threads of founders and artists sharing their upcoming NFT projects.
Discord. In case you don’t know what Discord is, it is a group-chatting app, where users join servers (aka private groups) to chat about a specific topic. Many NFT founders use this app to talk about their upcoming NFT projects, to get both support and feedback from users.
rarity.tools.Although this website is mostly used by NFT traders to vet projects and find rankings based on their rarity or unique traits, it also has an Upcoming NFT Sales section, where you can check projects to mint.
OpenSea’s homepage. They often share new mints, and you can easily browse through their huge NFT market.
But be careful…
Before minting a project, Verduzo says it’s super important to ensure its legitimacy, so you don’t get rugged (NFT lingo for “scammed”). Sadly, just like in any space, there are always bad players that are just there to do a quick cash grab and disappear.
To avoid this, make sure you research the project thoroughly by finding out all you can about its community, founders, and mission, as well as how long they’ve been around in this space.
Why?
If the project disappears into the mist, your NFT most likely will lose all its value, unless someone else decides to take over the project.
Time your purchase
Unlike the stock market, which is open for transactions Monday through Friday, from 9:30 a.m. to 4:00 p.m. ET, the NFT market is a global market that is open 24/7.
“So, it’s not just you and everybody else in the United States that you’re transacting with, it’s everybody in the entire world who has access to the Internet,” Verduzco says.
And, the more people that are trying to conduct transactions on the Ethereum network, the more congested it will be, which automatically translates to higher gas fees. This will hopefully be improved once Ethereum 2.0 (also known as the consensus layer) is fully rolled out.
One way to spend less money when buying NFTs is to ensure you conduct your transactions during the time of the day when the network is less congested.
Verduzco says that 11:00 a.m. to 1:00 p.m. PST is probably the worst time of the day to buy NFTs because that’s when most people around the world are awake. He suggests timing your transactions to random hours when most people are sleeping, like 2:00 a.m. or 5:00 a.m. PST. Though not always practical, it can help save a good amount of money.
You can also track gas prices by visiting the ETH Gas Station.
Become an NFT expert
Since NFTs are still an emerging concept, Verduzco says that one way you can make money in this space, without being an investor, is by learning all you can about them.
“It doesn’t always have to be investing in an NFT collection, in order to get a return,” Verduzco says.
“Understanding everything about the NFT space and becoming very good on one specific skill set, whether it’s social media marketing, community management, creating Discords, branding, or content creation, is going to provide value because, all of a sudden, you open yourself up to many job opportunities.”
In other words, you’ll be able to profit from your NFT knowledge as this technology becomes more widespread, and companies start searching for people who know their way around this space.
Before investing in NFTs…
Make sure your finances are in order
Investing in NFTs represents a higher risk than investing in traditional stocks or bonds, as their value is determined by speculation, so it fluctuates more than with your average investment.
Besides that, once you purchase an NFT, the transaction is final, and flipping them or reselling them could take a while. That’s why it’s so important you only invest money you have to spare, and not money you’re going to need short-term, as this could result in a financial disaster.
Learn as much as you can
“I would suggest investing your time and energy on learning before putting your money up,” Verduzco says.
“Find really cool projects that you like, and then join the Discords, listen to conversations, ask questions, watch a bunch of videos, read a bunch of blogs before you even think about putting Ethereum in your wallet to spend.”
Learning as much as you can about NFTs will give you a realistic idea of what to expect, plus determine whether you’re ready to take the plunge, or if you should wait a little longer before investing in this space.
If you’re curious about learning, you can check out podcasts, like a16z, which has extensive information on this topic, as well as reading books, like The NFT Handbook: How to Create, Sell and Buy Non-Fungible Token, to get started.
Additionally, Verduzco’s Twitter account is like a gold mine of NFT info, as he frequently shares projects, articles, and tips to help people learn more about this space.
Summary
You don’t have to be a millionaire to invest in NFTs, however, there’s a learning curve to be successful in this space.
The most important thing is to learn as much as you can about it, vet projects carefully, understand the risks associated with investing in such a volatile space, and make sure you don’t use money you’re gonna need. This will allow you to make the most out of your experience.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
If you have been trading for a while, then there is a good chance that you have made some trading mistakes along the way.
Unfortunately, it is part of learning how to trade.
After all, trading is a skill that takes time to learn.
Trading mistakes are part of the learning process. I know that sucks to hear, but it is the truth.
The outcome goal is to learn from those trading mistakes.
Then, you can realize what you did wrong so you do not repeat those same mistakes.
However, more than not, it is more common to repeat the same mistake over and over again.
If you are ready to recognize trading errors and learn how to overcome them, then keep digging in. Take notes and adjust your trading plan accordingly.
We will cover emotional trading mistakes, technical trading errors, and option trading mistakes.
What Are Trading Mistakes?
Trading mistakes are errors made by traders when you enter trades, either to purchase stocks or options.
More than likely, you will see the same type of trading error happening over and over again.
Trading mistakes are very common, but they do not have to lead to complete panic.
In order to minimize the chances of making a costly mistake, traders should adhere to their trading strategy. Additionally, traders should always trade with a clear head and stay disciplined.
There are plenty of trading mistakes you can avoid by being smart and adjusting your trading plan where needed.
Why Understanding Trading Mistakes Is Important for Long-term Success
Trading mistakes are the result of traders taking losing trades, which can result in poor overall performance.
Mistakes that occur during trading often include not paying attention to the market, not understanding risk, not having a well-thought out trading strategy, and being bad at managing the trade.
Whatever the reason, trading errors occur and it is how we react to them that matters.
Long-term success in trading is not a goal that can be accomplished overnight.
Achieving long-term success with active trading requires patience, discipline, and practice.
It is easy to get caught up in day-to-day successes and forget to commit to a long-term plan. As traders, it is important to be able to recognize our mistakes so that we can learn from them and move forward.
Top 5 Trading Mistakes
As you will see, we compiled a long list of trading mistakes. Each trader will see some of those trading errors in themselves. Some are small trading mistakes while others are detrimental.
First, we are going to focus on the top five trading mistakes first. This will make or break your success as a trader.
The following are five common trading mistakes that traders make and how to avoid them.
#1 – No Trading Plan
Trading without a plan means you enter a trade without knowing your next step.
No trading plan means that traders are not able to set clear goals, establish risk-reward ratios, and avoid common pitfalls that can occur during a trade. This makes it difficult for traders to know when they should be buying, selling, or holding.
Trading without a plan is risky because it can lead to losses that are much higher than they need to be.
When starting out in trading, it is important to remember that we can only focus on what we can control. This means that we should not worry about things we cannot change, such as the past or the behavior of other traders. Instead, we should form a trading plan and stick to it so that we can succeed in the long run.
Creating your trading plan will happen with many revisions. The goal of the trading plan is to set your overall strategy for trading.
Also, you need to have a specific trading strategy for each trade you enter.
Avoid by: Spending time to develop a trading plan. Revise as needed. Stick to it.
#2 – Risk Management Plan is Missing
A risk management plan is essential for traders and it should be included in any trading plan.
Without a risk management plan, traders are more likely to make emotional decisions that can lead to costly mistakes. For many traders, this is the hardest thing for them to manage.
It is possible to create a risk management plan as your overall trading plan.
In your risk management plan, you must decide (in advance) how much money you are willing to lose based on the amount of profit you perceive to make. For instance, you are willing to risk $300 in order to make $1000.
Many day traders focus on a 2:1 reward-to-risk ratio. Personally, I look for stronger reward-to-risk ratios greater than 3:1.
Avoid by: Understand how risk is a part of making a profit. Set your risk tolerance and do not deviate from it.
#3 – Not Keeping a Trading Journal
One of the most important aspects of successful trading is keeping a journal.
This not only helps you keep track of your trades and performance, but it can also help you remember what worked and what did not. Journaling is so helpful and such an overlooked task.
Your trading journal is the perfect place to take notes, keep track of your wins and losses, and record market movements so that you can learn from past mistakes.
At the end of every trading session, you should take some time to analyze your trades.
What went well?
What didn’t go well?
Why did you make that particular trade?
What was your entry strategy?
What was your exit strategy?
Where was the overall market momentum?
Did you control your emotions?
What grade would you give yourself?
This analysis is important so that you can learn from your mistakes and improve your trading skills. Stay motivated to continue learning about trading and keep more profit.
Avoid by: Start journaling. Spend time after exiting a trade and the market day to understand what happen and why you did a certain trade.
#4 – Watching Too Many Stocks
Watching too many stocks can lead to a decrease in returns and overall confusion on what is happening with your watchlist.
As a result, it is important to be selective.
The same can be said of stock scanners. If you are watching too many variables and possibilities, you can quickly become overwhelmed.
When you develop your trading plan, you need to decide how you find stocks.
Personally, I prefer to focus on a handful of stocks and a few key metrics. Then, watch them closely and trade accordingly.
As a new trader, I would pick about 5-10 stocks to analyze.
Avoid by: Revise your watchlist to half what you are currently watching.
#5 – Actually Exiting Trade as Planned
Above we talked about creating a trading plan and having a trading strategy for each trade taken.
But, the trading mistake happens when you do not exit the trade as planned.
This could be because of “hopemium” that the stock price will recover and you will get back your loss.
Our “hopemium” is that the stock price keeps rising and you will make more money.
Either one can be damaging to your trading account.
You created a plan. As a disciplined trader, you must follow your plan either to maximize your current profit or protect your risk against further losses.
Avoid by: Exiting at your set targets. Period.
12 Typical Emotional Trading Errors
Trading is 80% mental and 20% execution. Okay, I am not sure that there is an official study to back it up. But, I do know as a trader that emotions play heavily into your overall profit.
The typical emotional trading errors that traders make when they are in a trade are overconfidence, jumping into trades before the proper analysis is completed, and inability to take losses.
This is where most of the trading mistakes are made.
When first starting out in trading, it is easy to get caught up in the prospect of making a lot of money quickly. However, most traders find that trading is not easy to do and make common emotional trading errors.
Let’s dig into these emotional mistakes first and then we will follow up on the technical trading mistakes.
1. Letting emotions impair decision making
Emotions are an important part of decision-making, but it can be dangerous to allow them to influence our decisions. We should also take into account that emotions can often lead us astray.
It is clear that emotional trading can lead to bad decision making and, ultimately, financial losses.
When investors let their emotions take over, they are not thinking logically and may make impulsive decisions. For example, they may sell stocks when the market is down in order to avoid further losses, even though the stock may rebound soon after.
In order to be successful traders, it is important to stay calm and rational when making decisions.
Overcome by: Stick to your trading plan and take emotion out of the equation.
2. Unrealistic Profit Expectations
You go into every single trade expecting a home run! Enough money to achieve your dreams overnight!
These types of profit expectations will have you throwing your risk management plan out of the window and set you up for failure with greed, overconfidence, and impatience.
Be realistic about your expectations with trading activity.
Overcome by: Go for base hits. Small consistent wins.
3. Greed
Greed is a deep-seated need for more profit without regard to the chart or market conditions.
The common rationale is hopefully the stock will go up. Typically, you hold your position too long and end up losing some of your gains.
Greed can manifest in many different ways, and people with greed often neglect their own needs in order to attain more.
Overcome by: Set an OCO bracket to exit the trade at your specified level. Take you out of the equation.
4. Fear of Missing Out (FOMO)
You fear that you missed out on a trade, so you decide to jump in. As a result, you are risking more than you should.
This trading mistake is common, especially with online trading communities.
As a result, you may buy at the high and watch the stock reverse.
Overcome by: Realize that there will be missed opportunities. That is part of the game. There will always be another chance.
5. Fear
In many cases, fear is a reaction to why or why not we enter a trade.
For any trader, they may become frozen unable able to make a decision as their mind is wrapped in fear. At the same time, they are either missing out on potential profits or unable to exit a trade due to mounting losses.
Overcome by: This is a real emotion that you must overcome. Take the time and read resources to help you overcome being paralyzed by fear.
6. Overconfidence after a profitable trade
The overconfidence that comes with success can lead to a loss of profits.
When a trader has a winning position, they may become overconfident and make bad decisions because of the previously profitable trade.
For example, they may not take their profits off the table when there is an opportunity to do so or increase their position size when they should be taking profits. This could lead to them losing all of their winnings and more.
Overcome by: Take a break from trading for a few days or a week after a big win.
7. Entering a Trade Based on Your Gut
The process of entering a trade based on your gut is, essentially, following your “gut feeling” and buying or selling shares after the market opens. This is seen as a more risky and less profitable strategy than following a more traditional market timing approach.
Trading is all about making calculated decisions and sticking to a plan.
Trading based on your gut feeling or emotions will only lead to costly mistakes.
Overcome by: Before entering into any trade, make sure you have a solid strategy in place and know all the rules. Only then should you start trading.
8. Not reviewing trades
Not reviewing trades is a common problem for many traders. Traders who don’t review their trades tend to be more likely to make mistakes in their trading and over-trade, which can result in losses.
You will make the same mistake over and over again until you realize the root of the problem.
This is how you move from a losing average to a winning percentage.
Overcome by: Let your journal be your friend. Document everything including your emotions.
9. Following the Herd
Many people enjoy following the herd with stock trading, especially online platforms on Reddit, Discord, or Twitter.
You may decide to follow a certain group of people in order to be fed stock picks or updates.
This can be risky because there is no sound foundation to base your trade upon.
Overcome by: Trade your style and let that fit you.
10. The Danger of Over-Confidence
The “beginner’s luck” experienced by some novice traders may lead them to believe that trading is the proverbial road to quick riches.
Over-confidence is the belief that one’s abilities, knowledge, or qualities are better than average.
This over-confidence is a risk factor for certain types of mistakes and other negative outcomes as it leads to complacency, a lack of preparation, and an overestimation of one’s abilities.
Overcome by: Realize your limitations and watch for overconfidence to appear.
11. The Importance of Accepting Losses
Losses are always a part of trading life, but they can be overwhelming when they occur.
It is important to recognize that losses are in fact an inevitable part of growth and development as a trader.
Overcome by: Journal all of your losses. Look for patterns to appear. Adjust your trading strategy as appropriate.
12. Quit Your Job Too Fast
Quitting your job too fast is not a good idea, as it will force you to place trades that may not be the best set-ups.
Day trading can be a very risky venture, and it is possible to lose everything you have invested.
It is important to be aware of the risks before getting started. More importantly, do not quit your job too fast. This can lead to losses in your investments and could potentially put you in a worse financial situation than you were before.
Overcome by: Keep trading as a side hustle. Hone your trading skills and build up a reserve fund that will cover your monthly expenses. You will know when you are prepared to leave your 9-5.
Common Mistakes in Stock Trading
According to a study by the U.S. Securities and Exchange Commission, technical trading mistakes are actually fairly common among individual investors.
Mistakes in technical trading can be two-fold, either due to lack of knowledge or poor execution.
The most common mistakes are buying at the top and selling at the bottom, overtrading, and not taking the time to properly understand how trading works.
Now, let’s dig into all of the common trading mistakes I see.
1. Overtrading
Let’s start by talking about overtrading. This is a mistake that I see many people make. It is also a mistake that could have been easily prevented if you had just done your research before placing the trade.
Overtrading or placing more orders than you should do is the most common mistake.
Many new traders will simply open up their platform, look at the market, and place a trade. They are often chasing after the last couple of candles or they see an opportunity to get in “on the cheap”.
The problem with this approach is that you have no idea if this is a good trade or not. You are simply taking a shot in the dark and hoping for the best.
Overcome by: Only place the A+ setups that you like. Once you have traded so many times per day or week, stop trading.
2. Buying High and Selling Low
We all have heard the saying, “buy high and sell low.” However, too many novice traders do the complete opposite.
This trend happens with one of the emotional mistakes of FOMO; we already dived into that concept earlier.
Overcome by: Follow your trading plan on when to enter and exit the trade. Practice your strategy in a simulated account and master it.
3. Lack of Trading Knowledge
The lack of trading knowledge is a problem for many traders who are not familiar with how the stock market works. This can cause them to make mistakes when buying and selling stocks, which could result in losing a lot of money.
Just because you made a profit once on one stock does not mean that is a repeatable action.
In order to be successful in trading, it is important to have a good understanding of the markets and the strategies involved.
Without proper training, you are likely to make costly mistakes that can cost you money. Trading courses and tutorials are available online and through other resources to help you gain this knowledge and become a successful trader.
Overcome by: Take an investing course. Spend money on your education and not your losses. Here is a review of my favorite day trading course.
4. Following Too Many Strategies
Following too many strategies is a common problem in the investing world, which can lead to poor performance and more costly mistakes.
There are a million and one different approaches on how to trade the stock market, which indicators to use, whose advice you should follow, so on and so forth.
And then, many traders try and couple the strategies together only to quickly learn they may cause more losses than profits.
One way to avoid following too many strategies is by using a set of rules to decide which strategies are appropriate for investing.
Overcome by: Develop your trading plan. Outline the investing strategies you will use. Test any new strategies in SIM first.
5. Do Your Research
The solution to this problem is simple: do your research!
Before you enter a trade, take the time to do some analysis on the asset you are looking at. Look at past price action, news events, and any other relevant information that you can find.
Understand why the market might move in your favor and be able to build a case for it. The more data points you have supporting your position, the better off you will be.
If you are able to build a strong case for why the asset will move in your favor, then you can enter with confidence. This is because if the market does not move in your favor, you will know that it isn’t because of a lack of research on your part.
When you enter with confidence, this will make it easier to hold through the inevitable volatility and price swings.
Overcome by: If you enter without knowing why something is likely to move in your favor, then you are setting yourself up for failure. Do your research.
6. Not Using Stop-Loss Orders
Stop orders come in several varieties and can limit losses due to adverse movement in a stock or the market as a whole.
Tight stop losses generally mean that losses are capped before they become sizeable. However, you may have your stop loss too tight and get stopped out before your stock has room to move.
A corollary to this common trading mistake is when a trader cancels a stop order on a losing trade just before it can be triggered because they believe that the price trend will reverse.
Overcome by: Plan your stop loss in advance. Stick to it as it is part of an overall risk management strategy.
7. Letting Losses Grow
Active traders can be harmed by refusing to take quick action to close a losing trade.
It is important to take small losses quickly and limit your risk in order to stay profitable.
Stop losses can help you avoid larger losses.
While the stock may come back to your buy price, you have increased your risk far beyond what you planned. If your planned loss was $300 and now you are down over $500, it will take that much longer to overcome that growing loss.
Cut your losses. Review the chart. See what a better entry point may be.
Overcome by: If the stock moves past your pre-determined stop, then exit the trade. Don’t trade on hope.
8. Chasing After Performance
Many day traders are tempted to chase stocks, which is a bad reputation in the day trading world.
This happens when they see a stock that has had a large price increase and they think that it will continue to go up. In reality, this is not usually the case, and chasing stocks can lead to big losses.
What goes up must come down, right?
Overcome by: Wait for a better time to enter the trade according to your trading plan.
9. Avoiding Your Homework
It is important to do your homework. If you avoid doing your homework, then don’t expect fast results
Many new traders often do not do their homework before making any investment decisions.
This can lead to costly mistakes that can be avoided by doing some basic research. Trading is a complex process and should not be taken lightly – make sure you are fully prepared before risking your hard-earned money.
Overcome by: If you have not enrolled in an investing course, do that. Set daily goals on how to improve your trading performance that is not based on profit or loss.
10. Trading Difficult and Unclear Patterns
It is important to stick with the patterns and indicators that are clear and unmistakable so you don’t get caught up in any ambiguous or unclear trading signals.
With a little bit of research and understanding, these market patterns can become quite clear.
By forcing a chart to fit in what you want, then you are putting your trading capital at risk.
Overcome by: If you cannot read a clear chart or pattern, then quickly move to the next stock.
11. Poor Reward to Risk ratios
The most common mistake made by traders is poor risk management. This usually means taking on too much risk in relation to the potential rewards, which can lead to heavy losses if the trade goes wrong.
It is important to always have a solid plan for how much you are willing to lose on any given trade and never deviate from it.
What is the Reward to Risk ratio you look for:
1:1 Reward to Risk
2:1 Reward to Risk
3:1 Reward to Risk
Many beginner traders do not want to take on as much risk because their appetite for potential rewards may be lower. It is important for beginners to consider their trading strategies and risk management plans so that they can make the most informed decisions possible.
Risk-to-reward ratios are an important part of trading, and experienced traders are typically more open to risk in order to maximize their potential rewards. This means that they may be more likely to make high-risk, high-reward trades.
Overcome by: Stick to Risk to reward ratios that fit your trading plan.
12. Ignoring volatility
Volatility is the fear and unknown in the market.
The most important thing to remember about investing is that the stock market can be volatile.
A measure of volatility is from the VIX.
Overcome by: Decide how you will trade when the VIX is high and the news is negative.
13. Too Many Open Positions
Entering too many positions is one of the most common mistakes investors make. A portfolio should consist of a handful of top-performing investments that have proven to be good bets over time.
It is unwise to open too many positions in a short amount of time because it could lead to confusion.
This can be risky because if one or two of the positions go south, the entire portfolio can suffer. For this reason, it is important to carefully consider each position before opening it and make sure that all positions are contributing positively to the overall goal.
Overcome by: As an active trader, stick to under 5 open positions. As a long-term investor, look to build a portfolio of 25 stocks over time.
14. Buying With Too Much Margin
Most brokers offer 2:1 or 4:1 margin to cash. While this is tempting to use, it can also give you a margin call.
Margin can help you make more money by increasing your position size, but it can also exaggerate your losses.
Exaggerated gains and losses that accompany small movements in price can spell disaster for a new trader using margin excessively.
Overcome by: Use your cash only. Stay away from using margin.
15. Following Meme Stocks
These are the stocks made popular by many Reddit personal finance groups.
You have probably heard of Gamestop, Blackberry, AMC, or Bed Bath and Beyond as a meme stock.
While these stocks have risen to crazy highs, they have also fallen just as fast. Chasing the high may leave you with a big and painful loss.
Overcome by: Stick to your stock watchlist.
16. Buying Stocks With No Volume
Buying stocks with no volume is a risky idea that involves placing an order on a stock without knowing how much interest there will be in the shares. This can result in losing money if there are no buyers for the shares.
It is important to validate the price of a stock by looking at volume. The volume shows how much interest there is in a stock and can be indicative of future price movement.
When volume is low, it’s best to stay away from buying stocks as it could be a sign that the stock price is not stable.
Overcome by: Trade stocks with a volume of at least 500,000 or higher.
17. Ignoring Indicators
Indicators are things that tell us the market is going up or down. Examples of indicators would be the stock market at a particular point in time, a company’s performance with regards to earnings, the price of a product or service.
Every trader has their own set of indicators they use.
If you have outlined indicators you use in your trading, make sure to follow them regardless if it is against the way you want the stock to move.
Overcome by: Stick to your trading plan for each stock individually.
18. Trading Too Large Position Sizes
Trading too large position sizes is a risk that traders may run into when they hold positions in their portfolios for extended periods of time.
Position size is the amount of money placed on a trade, and the risk is that a trader may lose more than their capital on the trade if it does not go well.
Overcome by: Base your position size on the amount you are willing to lose. Not how much you want to make.
19. Inexperienced Day Trading
In order to be successful in trading, it is important to have a good understanding of the markets and the strategies you are using. Without proper training, it is easy to make costly mistakes.
Too many day traders turn trading into an unnecessary risky game.
To be successful, a day trader must have a solid foundation in how to invest in stocks for beginners.
Overcome by: Practice in a simulated account and make all of your mistakes there before moving to live money.
20. Inconsistent trading size
Inconsistent trading size is when traders are unable to predict what their position size should be in order to meet the trader’s desired profit goal.
Trading size is one of the most crucial aspects of a trading strategy and should be considered carefully. Larger trade sizes come with an increased risk, so it’s important to be aware of your position size when making trades.
Overcome by: Don’t risk too much on one trade. Stick to your risk management plan.
21. Trading on numerous markets
Trading on numerous markets is when a trader invests in stocks, bonds, commodities, crypto, and other securities.
Every type of market moves differently and takes time to understand how to be profitable.
Overcome by: Find your niche and stick to it.
22. Over-leveraging
Leverage is a powerful tool that can be used to magnify gains and losses in a trade. It is important to be aware of the amount of leverage being used in order to effectively manage risk.
Brokers play an important role in protecting their customers by providing margin calls and other risk management tools.
Overcome by: If you feel over-leveraged, sell some positions before your broker gets involved.
23. Overexposing a position
Overexposure is a term used in the investment world to describe the risk that comes with exposing your position too much in the market. When you have overexposed your position, you are putting yourself at risk of losing money if the stock or security you are invested in falls in value.
You are taking on too much risk.
Overcome by: Stick to your risk management plan. Always have cash reverse on hand in case the market reverses.
24. Lack of time horizon
There are different time horizons for various types of trading strategies. It is important to think about the time horizon you are comfortable with before investing in any type of investment.
If you are a day trader, you plan to close your trades before the end of the trading session. As a swing trader, you typically hold trades for a couple of days maybe up to a month. As a long-term investor, you plan to hold your stocks for longer than a year.
Overcome by: Match the time horizon of that investment purchase with your investing goals.
25. Over-reliance on software
Although some trading software can be highly beneficial to traders, it is important not to over-rely on it.
Automated trading systems are becoming so advanced that they could revolutionize the markets. As a result, human traders need to be aware of the potential for these systems to make mistakes and use them in conjunction with their own judgment.
Overcome by: Set alerts before you want to enter or exit a trade. Then, review if the move still follows your trading strategy.
Top Options Trading Mistakes Beginner Traders Make
These options trading mistakes are specific to option trading.
Trading options is an advanced strategy. If you have losses trading stocks, wait before you start trading options.
1. Not having a Trading Plan
Every trader needs a trading plan that outlines strategies, game plans, and trade metrics.
When you are trading without a plan, you are essentially gambling and hoping for the best.
This is not a recipe for success in the world of stock trading and is especially true for options traders.
A good trading plan should include chart analysis so that you can make informed decisions about when to buy and sell stocks. If you are using HOPE instead of a trading plan, then you need to find out the right way to interpret the chart because that will give you a better idea of what is happening in the market and how likely it is that your investment will succeed.
Overcome by: Create a specific trading plan based on your option strategy.
2. Not properly Researching Option Contracts
Learning to trade options is like going to school for a whole different trade.
There are way too many technical aspects to discuss in this mistake.
Spend time learning what criteria you want from an options contract to be successful.
Overcome by: Learn how options work and practice trading options in the simulator before going live.
3. Trading without an understanding of the underlying asset
Before you start trading options, trade with stocks.
Every stock moves at its own beat. You need to learn how it moves.
Jumping into options prior to knowing the stock can cause extreme losses. Learn how the underlying asset moves first. Be successful in trading stocks before moving to options.
Overcome by: Learn to trade the stock with shares first. Then, practice in a simulator. Once familiar, then trade live with options.
4. Buying Out-of-the-Money (OTM) Call Options
Options trading is a risk-based strategy. It’s important to know which strategies are right for you and what the risks of each option type are before putting on an option trade.
One common mistake that many traders make when it comes to option trades is buying out-of-the-money (OTM) call options.
This is because OTM call options are inexpensive and have a range of around 100,000 to 1 million. To avoid this mistake, it’s important to know what the risks of buying OTM call options are and which option strategies are appropriate for you.
Overcome by: Focus on trading In-the-money (ITM) call contracts. Know your strategy.
5. Not Knowing What to Do When Assigned
When you enter into an options contract, you are essentially agreeing to buy or sell the underlying asset at a specific price on or before a certain date.
If the market moves in a way that benefits the buyer of the option (the person who contracts to buy the asset), they can choose to exercise their option and purchase the asset at the agreed-upon price. However, if the market moves in a way that benefits the seller of the option (the person who contracts to sell), then they may “assign” their contract to someone else – meaning that they no longer want to buy/sell the asset, but would like someone else to take on that responsibility.
This can be jarring if you haven’t factored it into your decision-making when trading options, so it is important to be aware of the possibility.
This is why traders need a higher trading level to sell options contracts or verticals.
Overcome by: Be okay with buying the shares if you are assigned. That is a part of your trading plan.
6. Legging Into Spreads
It is a common mistake for traders to get legged into spreads by entering positions when the market price has moved away from their position. They may have gotten caught up in the belief that they are being a “smart” trader by trying to profit from the spread.
The problem is that they are not taking into account that their cost basis must go up in order to maintain the position. If the market price of the underlying goes up, their cost basis must go up as well.
Overcome by: If you are not comfortable with this advanced strategy, then exit your options contract and place a new one.
7. Trading Illiquid Options
Trading illiquid options is a mistake because traders are taking on too much risk, with potentially disastrous consequences.
Illiquid means that the option cannot be bought or sold at the given time.
In other words, the option is not tradable. When traders trade illiquid options, they are taking a risk that their trades will not be executed because there is no liquidity in the market at that time. They have to hope that the market will become liquid again, and they can then sell their position or buy back their option at a lower price.
Overcome by: Check option volume and open interest at your strike place. Verify you have interest in moving your contract.
8. No Exit Plan
It is important to have a plan in case your trading strategy doesn’t pan out as planned.
This will give you the peace of mind that you won’t be left high and dry without an exit strategy.
With options is it more difficult to limit your risk to reward. As a result, you must decide your exit plan in advance.
Overcome by: Develop your trading strategy and include how and when you will exit the option contract.
Ready to Avoid these Trading Mistakes?
Investors are often their own worst enemy when it comes to trading.
They make emotional decisions instead of logical ones, and this leads to them making costly mistakes. Plus there are many technical errors new and seasoned traders are still making.
In order to be successful in the markets, investors must first learn to accept their losses and move on. Only then can they put that mistake behind them and focus on making profitable trades in the future.
In this post, I shared some of the more common trading mistakes that people make and how to avoid them.
Now, you have to work to avoid these trading mistakes and be profitable.
Know someone else that needs this, too? Then, please share!!
FOMO, or, “fear of missing out” when trading, applies to the anxiety of potentially passing up a profitable investment that an investor may experience. “FOMO” is a term commonly used to describe other anxiety-inducing situations as well. For investors who visualize a scenario where a stock rises sharply in value but goes unpurchased, the fear of missing out may cause them to make investing decisions that aren’t fully thought-through or in line with their investing strategy.
Making emotional, knee-jerk decisions when investing can derail your overall strategy, too. That’s why it can be important to try and avoid it the best you can.
What Is FOMO Trading?
FOMO trading happens when an investor allows their fear of missing out to drive their investing decisions — to the exclusion of other insights and instincts. This can trigger errors, creating problems in an otherwise well-managed investment portfolio.
For example, an impatient trader may rush to buy a hot stock even if it doesn’t fit into their investment strategy, or if the stock risks could jeopardize the portfolio’s stability.
Yet, buying any investment without proper research, risk assessment, or a planned exit strategy if the stock goes down, is the opposite of effective stock market investing.
Understanding Behavioral Finance
Sociologists use the term “behavioral finance” to describe the overall need to abandon rational thought and follow a herd to mitigate any FOMO anxieties. With behavioral finance, emotional and sociological influences replace scrutiny and logical thinking, which can significantly alter investment outcomes.
The fact that so many stock market rumors are stoked on social media, and that there are so many investors who rely on social media for investment ideas, only adds more pressure to give in to your anxieties, and buy a stock or other investment that may not necessarily fit in with your investing strategy.
Ways to Avoid FOMO Trading
How can an investor fight off FOMO tendencies and remain a stable and steadfast investor? It’s not easy given the pressure to trade frequently these days, but these tips may help.
Invest With a Plan in Mind
Investors who trade according to a well-thought out plan or investing strategy — and not with a FOMO mindset — are likely to be more prepared for better investment outcomes. By doing research, learning how to value a stock, and establishing your own tolerance for risk, you may be less likely to make rash or emotional decisions regarding your investments.
Stay Calm in Highly Volatile Markets
Many impulse trades come at a time when markets move fast. When investing in a volatile market, it’s especially important to trade with strategy in mind, rather than with your feelings.
Be Sensible About Trading
A single stock market trade rarely makes or breaks an investment portfolio. If you do hear about a can’t-miss stock and are anxious to pull the trigger and buy that stock, it can help to keep it in perspective: there’s always another market opportunity down the road. In other words, keep the big picture in mind.
Avoid Investing Money You Can’t Afford to Lose
The old adage of “never play with money you can’t afford to lose” is very much in play with FOMO investing. It’s never wise to chase a stock with large amounts of money your portfolio can’t afford to be without. In nearly all cases, if an investment’s risk is too high, and the potential impact to your portfolio is too acute, then it may be best to wait things out.
Don’t Mistake Social Media Advice For a Sound Investment Strategy
Social media captures a great deal of attention from market investors. But these platforms may be loaded with touts, short-sellers, penny stock promoters, and other investment shills who have their best interest in mind — not yours. As a rule, social media touts always talk up their gains but rarely mention their losses. Remember that maxim when you’re under the temptation of a FOMO trade.
The Takeaway
FOMO trading is a type of behavioral finance — in which an investor lets emotions like the fear of missing out replace logical, strategic thinking. FOMO trading often happens on a whim without much thought, which can significantly impact investment outcomes.That’s why it’s important to have a cogent strategy in place, and to keep your goals in mind when making investing decisions.
While it can be difficult to completely remove your emotions from your investing activities, keeping your strategy top of mind can help direct your decision-making process. Again: It’s not easy, but with some practice and experience in the markets, learning to skip investing trends might become a bit easier.
Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.
SoFi Invest® The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results. Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below. 1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market. Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions. SOIN0523036
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Investing in stocks can seem like a daunting task.
There are so many things to consider when it comes to investing, and the stock market is constantly moving.
Stock market investing is a popular option to increase net worth and make money.
Many people are looking for ways to invest their money, with the number of individual investors increasing rapidly in recent years.
This guide covers many important factors for how to invest in stocks for beginners.
Starting out as a newbie trader can be scary and overwhelming… don’t worry, all seasoned traders had to start at the beginning too!
Let’s take away that quell those thoughts and focus on why you want to learn to invest in stocks.
This guide will give you everything you need to know about how to invest in stocks as a beginner investor!
What Are Stocks?
In the most basic form, stocks are a form of investment. When you own a stock, you have a piece of ownership in the company’s equity.
The stock market is a real-time financial market in which investors buy and sell stocks and other securites. The stock market is made up of many companies and individuals who are actively investing in stocks.
Stocks are an excellent way for companies and individuals to invest in a company and receive a share of the company’s profits.
Many of the growth stocks (FAANG stocks) are those who investors want their stock price to increase over time. Thus, increasing their overall portfolio’s net worth.
FAANG Stocks is an acronym for: Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly known as Google).
Some companies like Chevron (CVX) pay out a dividend each quarter to their investors.
There are thousands of stocks available to trade.
What Can You Invest In The Stock Market?
There are many investment opportunities in the financial market, so it is important to be informed about what you can invest in. Below are some of the places where you can invest your money:
Stocks
Bonds
Mutual funds
ETFs
Commodities
Futures
Options
Now, we are going to look at the most common.
Individual stocks
Individual stocks are a type of investment that you can make yourself.
You can choose how many shares of a certain company you want to purchase.
For example, you like Tesla for how they are innovative in the electric car space. You can choose to invest 20 shares of their stock.
As a long-term investor, you want to hold a portfolio of 10-25 stocks. Find a list of beginning stocks to build your portfolio.
Individual stocks can be bought or sold as a way to dip your toe into the stock-trading waters.
As a short-term investor, you are looking to make money as the stock price increases or decreases.
Mutual Funds
Mutual funds are managed portfolios of stocks.
As a result, mutual funds typically have load fees equal to 1% to 3% of the value of the fund.
One of the most popular mutual funds is VTSAX because of its expense ratio is .04%
Mutual funds are a clear choice for most investors because of the simplicity to invest in the market. This can be a good investment for both novice and experienced investors, as they offer decent returns with lower risk.
They tend to rise more slowly than individual stocks and have less potential for high returns. Mutual funds are a great way to diversify your portfolio and gain exposure to a variety of different securities.
All mutual funds must disclose their fees and performance information so that you can make an informed decision about whether or not to invest.
Exchange traded funds (ETFs)
Exchange traded funds (ETFs) are a type of exchange-traded investment product that must register with the SEC and allows investors to pool money and invest in stocks, bonds, or assets that are traded on the US stock exchange.
They are inherently diversified, which reduces your risk.
This is a good option for beginner investors because they offer a large selection of stocks in one go.
ETFs have a lower minimum to start investing, which is a draw for many investors starting out with little funds. Plus there are many different types of ETFs to choose from.
ETFs are similar to mutual funds, but trade more similarly to individual stocks. With ETFs and Index Funds, you can purchase them yourself and may have lower fees.
Why Stock Prices Fluctuate
Stock prices fluctuate because the financial markets are a complex system. There are many factors that can affect the price of a stock,
There are a number of factors that can influence stock prices, including:
Economic indicators like GDP growth, inflation, and unemployment rates
Company earnings reports
The overall health of the economy
Political and social instability
Changes in interest rates
War or natural disasters
Supply and demand,
Actions of the company’s management
Short squeezings like what happened with GME or AMC
The volatility in the stock market is the #1 reason most people stay out of investments. However, on average, the stock market has moved up 8-10% a year.
What is the best thing to invest in as a beginner?
The best thing to invest in as a beginner is your time.
You need to learn how the stock market works. Just like you would get a certification or degree, you should highly consider an investing course.
Learn and devote as much time as you can to investing in stocks.
How To Invest In Stocks For Beginners?
Investing in the stock market can be a great way to make money! If you’re looking for ways to make money or grow net worth, investing in a stock is a smart choice.
With online access and trading being easier now than ever, it can be easier than ever to start buying stocks.
Let’s dig into how to invest in stocks like a pro.
FYI…You should do your own research before investing.
Step #1: Figure out your goals
Figure out your goals to help with setting an investing strategy.
What are you trying to achieve with stock market investing? Is it supplemental income? A certain level of wealth for retirement? Are you looking for short-term or long-term gains?
Once you know what you’re aiming for, it will be easier to find the right stocks and make wise investment decisions.
Your reason to invest in stocks will be different than everyone around you.
Some people want to supplement their weekly income.
Others want to invest in companies for the long term.
My goal is to make weekly income from the stock market. That is my investment strategy for non-retirement accounts.
You need to spend time understanding WHY you want to buy stocks.
Knowing this answer will help you define what type of trader you will be.
Step #2. Decide how you want to invest in the stock market
When you decide to invest in the stock market, you need to choose what you want to invest in.
You can invest in stocks, which are shares of ownership in a company, or you can invest in bonds, which are loans that a company makes. There are also other options like mutual funds and exchange-traded funds (ETFs), which are collections of stocks or bonds.
Also, you can expand this to what types of investments will you have in various retirement or brokerage accounts. For example, you may invest in mutual funds with your 401k, ETFs with your Roth IRA, and stick with individual stocks for your taxable account.
This is a personal decision.
Many people when they are first starting to trade stocks choose to limit purchasing stocks with a limited percentage of their overall portfolio.
Step #3. Are you invest in stocks for the short term or long term?
The buy and hold investor is more comfortable with taking a long-term approach, while the short-term speculator is more focused on the day-to-day price fluctuations.
Once again, this is a personal preference.
One of the most common themes of many investing gurus is, “Remember that stock prices can go down as well as up, so it’s important to stay invested for the long term.”
However, this full-time trader wants to make money on those highs and lows.
Knowing your overall investment horizon will help you decide how much time you plan to hold onto your investments to reach your financial goal.
Also, you can choose different time horizons for different accounts.
Step #4: Determine your investing approach
Passive and active investing are two main approaches to stock market investing.
Passive investing does not involve significant trading and is associated with index funds.
Passive investing is a way to DIY your investments for maximum efficiency over time.
Thus, you would contribute to your investment account on the xx day of the month with $xx amount of money.
This happens with consistency regardless of where the market stands on that day.
You are less warry of where the stock market will go and focused on overtime it will continue to go up.
Active investing takes the opposite approach, hoping to maximize gains by buying and selling more frequently and at specific times.
Active investing is when an investor is actively acquiring, selling, or holding bought stocks.
This could be with day trading or swing trading.
You may hold stocks for less than a day, a few days, or a couple of weeks.
The purpose of having active investing is to make profits.
In the stock market, investors make efforts to increase their net worth over time or to make income off the market.
Step #5: Define your investment strategy
When it comes to investing in the stock market, there are a few key factors you need to take into account: your time horizon, financial goals, risk tolerance, and tax bracket.
Do you want to be an active trader or stick with passive investing? What kind of investor am I?
There is no right or wrong answer as this is a personal preference.
Ultimately, you want returns to be greater than the overall S&P 500 index for the year.
Once you’ve figured these out, you can start focusing on specific investment strategies that will work best for you.
Be aware of any fees or related costs when investing. Fees can take a bite out of your investments, so compare costs and fees.
Step #6: Determine the amount of money willing to lose on stocks.
Trading stocks online is inherently risky.
You want to consider what your “risk tolerance” is. Simply put, how much are you willing to lose in stocks before you want to quit?
The biggest reason most people quit trading stocks is that they do not know their risk tolerance and fail with risk management.
You will lose on trading stocks. The goal is to lose a small amount on some of the trades and gain a greater amount of more of your trades.
How much risk you can reasonably take on given your financial situation?
What are your feelings about risk?
What happens when your favorite stock drops 25%?
Understanding your risk tolerance and how much you are willing to lose will help you keep your losses small.
Start with a small amount of money when investing in stocks. Also, make sure you have enough money saved up so you can handle any losses that may occur.
How to Start Investing in Stocks
There are a variety of ways to start investing in stocks. Some methods include getting a small account balance and then buying shares, creating an investing club with friends, or researching the companies you want to invest in.
Now, that you have determined how and why you want to invest in stocks. Let’s dig into the nitty gritty of how to manage a stock portfolio.
On the other hand, if you don’t invest enough, you could miss out on potential profits. Try starting with an amount you’re comfortable losing if the stock market does go down.
1. Open an investment account
There are a few things you need to do in order to start investing in the stock market.
The first is to open an investment account with a broker or an online brokerage firm.
There are different types of accounts you can open:
Taxable accounts like an individual or joint brokerage
Retirement accounts like IRA or Roth IRA
These are the most basic investment accounts, here is a list of types of investment accounts.
If you plan to hold EFTs or mutual funds, Vanguard is a great place to start.
If you plan to be an active trader, I would look at TD Ameritrade or Fidelity. Be wary of Robinhood or WeBull.
2. Saturate yourself in Stock Market Knowledge
On the simplest level, it can be incredibly easy to begin your investing career with little-to-no knowledge, research, and expertise.
If you have even a remote understanding of stocks, then learn what you need from an easy-to-find YouTube video, followed by watching some of your favorite TV shows to learn more about the market and its secrets.
With that said, you need to be digesting the basics from start to end of getting your first investment started.
As the title reveals, investing can seem intimidating and complicated. Thus, stock market knowledge is invaluable.
3. Consider an Investing Course
A typical investing course would teach how to invest in stocks (and possibly other investments).
As a beginner trader, it is unlikely you will know the full extent of how the stock market works. There are many intricacies you must learn and understand.
Beginners should learn about stock investing basics, such as diversification and investment criteria.
Many investing courses offer a platform on how to make money by trading stocks.
Personally, I highly recommend buying this investing course.
If you choose not to follow my advice, that is fine. Come back when you have lost more money in the stock market than the price of the courses.
I CAN NOT STRESS ENOUGH… how important it is to have a solid foundation and practice in a simulated account before you use your real money.
4. Research the companies you want to invest in
When you’re ready to start investing in stocks, it is important that you do your due diligence and research the companies you want to invest in.
Look for trends and for companies that are in positions to benefit you.
Consider stocks across a wide range of industries, from technology to health care. It’s also important to remember that stock prices can go up or down, so always consider this before making any investment decisions.
5. Choose your stocks, ETFs, or mutual funds
Next, you have to decide what fits your investing strategy. Are you looking to buy:
Stocks
ETFs
Mutual Funds
Regardless of which type of investment you make, you must look for companies that have attractive valuations and growth prospects. In the case of index funds or ETFs, which fund has the companies you find attractive.
Most importantly, you should also take into account the company’s financial health and its prospects for future growth.
Make sure you understand the risks associated with holding a particular stock, including possible price fluctuations and loss of value.
7. Take the Trade
This is the hardest step for most people is to take their first trade.
Thus, why learning to trade stocks is great to learn a simulated account using fake money. Then, move to a LIVE account using your real money.
At some point, in your investing in stocks journey, you must press the buy button.
For many the investment platform may be overwhelming to use, so check out your brokerage’s YouTube videos to help you out.
8: Manage your portfolio
Managing your portfolio is important to keep your investments in good shape.
If you are a long-term investor, diversify your portfolio by investing in different types of investment vehicles and industries.
If you prefer to swing trade or day trade, then you want to make sure you always have cash on hand and are rotating your portfolio to take profit.
Investing can be difficult for beginners who often lack knowledge about the stock market.
It is important to remember to keep investing money and rebalance your portfolio on a regular basis. This will help ensure that you stay on top of your investments and achieve the desired result.
9. Selling Stocks
For most investors, it is harder to sell their stocks than to purchase them. There are a variety of factors for that. But, you must sell your stocks at some time to realize your gain.
Don’t panic if the market crashes or corrects – these events usually don’t last very long and history has shown that the market will eventually rebound. Most people tend to panic sell when stocks are low and FOMO buy when the market is at highs.
When you are ready to sell, aim to achieve a percentage return on your investment.
This will require some focus on your time horizon and the stocks you want to invest in.
Also, you need to consider any taxes that may be owed on the sale of stock.
If you’re new to stock investing, consider using index funds instead of individual stocks to gain broad market exposure.
10. Journal & Analyze your Trades
Journaling is a way of recording the important decisions you make during trading to help yourself remember what happened in your trades. It can be used as a tool for reflection, learning from mistakes, and reviewing your strategy.
Analyzing your trades means looking back on your trading history with the goal of improving it.
This is the most overlooked step of the investing process.
When it comes to buying and selling stocks, journalling what is happening in the market is an important part of being a successful investor.
Stock Market Investing Tips for Beginners
Ask any seasoned trader, and they will have a list of investing tips for beginners.
They have made plenty of trading mistakes they do not want to see newbies do the same thing.
When starting to invest in the stock market, beginner investors often seek out consistent and reliable investments.
This allows them to slowly learn about the stock market and take calculated risks while also earning a return on their investment. Over time, as they gain experience, they can expand their portfolio to include riskier but potentially more rewarding stocks.
1. Invest in Companies That You Understand
An investor should know the company they are investing in and have an idea of what type of return they expect.
When you are starting out, it is best to invest in stocks of companies that are easy to understand and have a proven track record.
Do NOT invest in stocks based on the advice of friends, what you read in the news, or on a whim – these can be risky moves. Be wary of the popular stocks you can find on the Reddit Personal Finance threads.
2. Don’t Time the Market
In the world of investing, there is one rule that no investors should ever break: do not time the market.
By following this rule, you will always be on top of your investments and will be able to reap the rewards.
There are times to buy stocks and sell stocks. This is something you will learn when investing in a high-quality investing course.
As an average investor, trying to time the market will leave you frustrated by your minimal returns or great losses.
3. Avoid Penny Stocks
Penny stocks are the lowest-priced securities on the market, and they don’t offer any significant upside potential to their investors. While you may hit a home run return on some, many penny stocks tend to trend sideways.
The risk is not worth the return.
If you plan to invest in stocks, avoid penny stocks and focus on healthy companies.
4. Consider Buying Fractional Shares
Fractional share investing lets investors buy less than a full share at one time. Many times, you may not be able to afford the price of a full share.
For example, buying a share of Amazon (AMZN) may cost you upwards of $2800 or more. Thus, you can invest a smaller amount with a fractional share.
You would have to check if your brokerage company allows the purchase of fractional shares.
5. Stay the Course
In order to be successful, a trader must stay the course and maintain their focus. By staying focused, they will have less chance of making mistakes that may lead to big losses or overtrading.
When you’re starting out in the stock market, it’s important to be disciplined with your buying. Don’t try to time the market, because you’re likely to fail. Instead, buy shares over time and stay the course.
That way, you’ll be more likely to see a profit in the long run.
6. Avoid Emotional Trading
In order to be successful in the stock market, you have to maintain a level head.
Responding emotionally will only lead to bad decision making. Instead, stay the course and trust your research and analysis.
Know your weaknesses as well as your strengths.
7. Do Your Research
When you’re ready to start investing in the stock market, it is important to do your research so you can make informed decisions.
There are a lot of stocks to choose from, and it can be tempting to invest in them all.
But remember, you don’t want to spread yourself too thin. Invest in stocks that you believe in and that have a good chance of making you money.
8. Build Wealth
Stock market investing is one of the best ways to grow your money over time.
For long-term investing, you buy stocks in companies and hold them for a period of time, typically years. Over time, as the company grows and makes more money, so does your stock. This is one of the most common ways to build wealth over time.
The other way with short-term investing is to consistently take profit and grow your account over time.
Stock investing FAQs
Here is a list of the most common questions and answers on stock investing.
Q: What is the difference between investing and trading?
Trading is buying or selling financial products with the goal of making a profit. This is normally a day trader or swing trader.
Investing, on the other hand, refers to the process of putting money into an investment with the hope that it will grow. Someone who is focused on the long-term.
Q: Do you have to live in the U.S. to open a stock brokerage account?
No, you do not have to live in the U.S. to open a stock brokerage account. You must find a brokerage company in your area of residence abroad.
Q: How much money do I need to start investing?
The very common question of, “How much should you invest in stocks first time?”
It is recommended to start investing with $500 or more. However, you can start with Acorns with as little as $5.
Check out this investor’s story by starting with a small account of $500 and growing it over $35k in less than 6 months.
It is best to grow your account with your growth or profit.
Q: Do I have to pay taxes on the money I earn from stocks?
Yes, you will be required to pay taxes on the money you earn from stocks.
Q: What are the best stocks for beginners to invest in?
The best stocks for beginners to invest in are those that have a history of staying consistently on an uptrend. These companies’ stock prices have typically risen over the course of the year.
Find a list of beginning stocks to build your portfolio.
Q: How do beginners buy stocks?
Above, we outlined this in detail. In order to buy stocks, there are a few different steps that you should follow in order to maximize your chances of success.
The first step is making sure you have an account. Once you have an account, the next step is to decide which stocks you want to invest in. Then, you must buy your stock. Finally, you must decide when you want to sell your stock for a realized gain or loss.
Q: How many stocks should you own?
The best answer is it depends on your investing strategy.
As a short-term investor, you can only manage a smaller number of trades.
As a long-term investor, you need a more well-rounded portfolio. of15-25 stocks.
More likely than not, the short answer is “as many as you can afford.”
Q: What is the best thing to invest in as a beginner?
The best thing to invest in as a beginner is an index fund.
Indexes are great because they diversify across many different types of investments and don’t require much effort on the part of the investor to maintain. Index funds are also less risky than other investments, especially in the beginning stages of an individual’s investing career.
Q: How do we make money?
Traders make money in many ways. They can trade stocks, bonds, futures, and options on equities. They can go long when the market goes up and short when the market goes down.
Traders also use trading systems that are usually automated to manage the trades they make to maximize profit.
Trading is a risky investment and it’s not uncommon for traders to lose money. In order to keep losses small, many traders use the trading strategy based on minimizing risk in order to get the desired return.
Learn how fast you can make money in stocks.
Q: Why is Youtube Option Trading So Popular?
Video on how to trade options is very popular on Youtube. This is because of the high volume of interest on this topic.
For many people, learning options is an advanced strategy that takes more time and knowledge to learn.
This is my favorite youtube option trading channel as well as an overall investing strategy.
Additionally, traders are able to get a much higher return on motion trading versus going long or short on stocks.
Q: What is volume in stocks?
Volume is a measure of the number of shares traded in a given period, usually trading days.
This is an important metric if you plan to exit your trade to know there are enough buyers to buy your stock.
Q: How to invest in penny stocks for beginners?
Penny stocks are shares of a company that typically trade for less than $5 per share, which is also known as penny stock trading.
Investing in penny stocks can be a lot of fun and the highest risk, and there are many ways to get involved. For anyone who is new to the world of investing in penny stocks, it can be intimidating to know where to start.
However, there are a few things that you should keep in mind before diving into the world of penny stocks. One of these is researching what types of companies you want to invest in. Many of these penny stocks are not healthy companies and burning through cash.
It is important to always be careful when investing in penny stocks. Keep in mind that the risk of losing money is high and you should invest only what you are willing to lose.
Q: How to invest in stocks for beginners robinhood?
Robinhood is a stock brokerage company that allows users to invest in stocks without paying any fees. It also provides real-time quotes and charts. To invest, the user must have an account with Robinhood that holds at least $0.
Most major brokerage companies have zero commission fees on trading stocks as well.
Beware, Robinhood is known for stopping to trade various stocks during times of volatility whereas other’s brokers do not.
Q: What is a good price to buy at?
This is a hotly debated question as every investor sees the market from their view.
More often than not, people wonder the best time to buy stocks.
As such, you can read is now a good time to buy stocks?
Ready for Stock Market Investing?
If you are new to investing in stocks, there are a few things you take into consideration before diving into the market.
For starters, it is important to understand how stock markets work. You should also know the difference between a stock and an investment.
Investing in stocks can be a bit complicated, but this guide walked you through the basics of how to invest.
Before you invest in stocks, it is important that you understand your investment strategy. That way, you can make informed decisions about where to put your money and how much risk you are willing to take on.
Most people shy away from learning how to actively trade stocks because of the movies about Wall Street they have watched.
You will get a deeper understanding of investing in stocks the longer you educate yourself on the concept.
Overall, it is wise to diversify your portfolio and don’t put all your eggs in one basket.
So, what is your next move to start investing?
One of the best ways to improve your personal finance situation is to increase your income.
Here are the best investing courses to guide your path. With time and effort, you can start enjoying the lifestyle you want.
Learn how to supplement your daily, weekly, or monthly income with trading so that you can live your best life! This is a lifestyle trading style you need to learn.
Honestly, this course is a must for anyone who invests. You will lose more in the market than you will spend this quality education – guaranteed.
Read my Invest with Teri Review.
Photo Credit:
studentloanplannercourse.com
Learn how to reach a six figure net worth in 5 to 10 years, even if you have a massive amount of student loans.
This beginning investment course will help you pay off debt and start your path to six figures.
After taking a second job as a driver for Amazon to make ends meet, this former teacher pivoted to be a successful stock trader.
Leaving behind the stress of teaching, now he sets his own schedule and makes more money than he ever imagined. He grew his account from $500 to $38000 in 8 months.
Check out this interview.
Know someone else that needs this, too? Then, please share!!
Our rights as women have come a long way since we earned the power to vote on August 26, 1920.
But the financial playing field between men and women still isn’t level. Not even close.
To help you make waves in your own financial life, I interviewed several Millennial and Gen Z women to find out what financial advice they’d give to other women today
Here’s what they had to say.
What’s Ahead:
1. “Don’t be afraid to negotiate your salary.”
Anna Barker, Founder of LogicalDollar, offered me this advice.
There’s no question that it can be scary to ask for more money. Especially as women, we often internalize the feeling that we’re going to be seen as pushy or demanding if we ask for a raise.
However, various studies show this is actually one of the reasons women end up earning less over their lifetimes than men, who tend to be more likely to ask for more money.
2. “Take advantage of any employer match ASAP.”
Barker also talked with me about retirement. One of the best things that you can do for your future financial security is to start investing as early as possible.
If your employer offers any matching of your 401(k) contributions, this is basically free money and you should do everything you can to invest up to the limit of the match.
3. “Avoid high-interest debt.”
According to Barker, a big money mistake that a lot of women in their 20s and 30s make is signing up for high-interest credit cards. To be clear, credit cards can actually be a great tool if used correctly — which primarily involves paying the balance off in full by the end of each billing cycle.
The problems start to arise once those interest-free periods run out and you realize you’re not able to immediately pay off the debt you’ve accrued.
4. “It is SO cliché, so hear me out… please start saving early for retirement!”
Heather Albrecht, Financial Coach and Founder of Balance Financial Coaching, discussed this with me.
It’s hard because when you’re young, you seem to have SUCH a long time until that money is needed. But the math doesn’t lie.
Starting young makes it easier because you can save less. Gosh, I wish I had made the space in our spending plan to save earlier even though it seemed impossible. The $25 here or there would have been huge by now.
5. “Start using a spending plan or budget. Zero it out each month, and save the rest.”
Albrecht also spoke with me here. And I have to say if I had been able to get myself into the mindset of “saving money is spending money on my future freedom” at a younger age, there would have been a lot less stress at times.
Budgeting doesn’t have to be difficult, either. Just pick the right method and it’ll become just another habit.
6. “As a Millennial myself, the best money advice I would give women in their 20s and 30s is to diversify how you save and spend money.”
Siobhan Alvarez, Founder of Budget Baby Budget, shared this wisdom with me.
I am a big believer in not being dependent on one checking and savings account! I have a long-term high-yield savings account for an emergency fund, a savings account at my local bank for big purchases, a checking account for everyday expenses; and a checking account for fun purchases throughout the month.
This has helped me not only pay off a huge amount of debt over the past few years but do it in a way so I didn’t feel like I was missing out on life and fun!
7. “Protect yourself and your people financially.”
Brittney Burgett, Head of Communications at Bestow, gave this little nugget of advice. Emergency savings, disability insurance, and life insurance matter, especially if you have financial dependents.
Insurance, in particular, is more affordable to buy the younger and healthier you are. I, for example, have life insurance because I own a home.
My mom is my beneficiary, so if anything were to happen to me, the payout from a policy would enable her to continue the mortgage payments and decide later on what to do with my house — keep it, rent it or sell it. Life insurance would give her flexibility when it’s needed most.
8. “Educate yourself so you understand how money, interest, and debt works.”
Lindsay Feldman, Publicist and Founder of BrandBomb Marketing, broke down this for me.
It wasn’t until I really started reading financial books and listening to podcasts that I really began to take control over my financial situation. Understanding how money, interest, and debt works are key to being able to make your money work for you. I look at everything differently now which has empowered me to make smarter decisions.
9. “Sign up for Experian Boost. It’s free and will report monthly bills that generally don’t boost your credit like a phone bill, gas, and power!”
Feldman offered up a way for folks to finally help their credit the easy way. Experian Boost™ is free and it takes just a few minutes to sign-up.
Always be on the lookout for ways to improve your credit – it’ll only help you in the long run.
Feldman shares a great tip that can help homeowners own their home sooner (and pay wayyy less in interest). If it’s possible, work those extra payments into your budget.
11. “When it comes to money, you can have your cake and eat it too.”
Youmna Rab, Founder of Brilliantly Budgeting offered me this quote.
You don’t need to save every penny you earn and give up your favorite indulgences like spa days or dinners out.
If you make a plan for your money, you can enjoy what you like while also saving money for the future.
12. “Do not share bank accounts with anyone you’re dating but not married to, even if you live together.”
Shannon Vissers, the Financial and Retail Analyst of Merchant Maverick, shared some tough love here.
If you break up or your partner spends on things you don’t agree with, you’ll have no legal recourse to get your money back apart from suing them in small claims or court (which is expensive and stressful and may not go in your favor).
13. “Do not lease your car. Take out a loan instead.”
Vissers makes a good point here as well. A lease is essentially a very expensive car rental, and it’s a bad choice unless you’re wealthy enough to comfortably afford this luxury.
This doesn’t mean you can’t get a new car when you’re young. Rather than leasing a car out of your price range, opt to finance a cute, reliable car that you’ll own in three or five years (ideally three). You’ll build credit history this way and, in a few years, you won’t even have a monthly car payment.
14. “Be a minimalist, especially if you rent.”
While this tip may not be for everyone, there’s a good reason Visser’s offers this pearl of wisdom as well.
A good case can be made for spending on experiences when you’re young – trips, concerts, etc. — but overspending on retail goods is another story. Ever heard of the saying, what you own, owns you?
It’s true.
Remember, you’ll have to deal with all your clothes, shoes, furniture, kitchen items, knick-knacks, etc. the next time you move — and your headaches will be compounded if you have to move to a smaller place.
15. “The greatest gift you can give yourself is to save and invest early.”
Sarah Jane Paulson, CFP® at Valkyrie Financial, gave me this bit of guidance.
The classic pay yourself first mentality is the easiest way to a financially strong future. Build that emergency fund (or F*** You fund, if you prefer) of three to six months worth of expenses in a separate account other than your everyday checking.
Then go out and open an IRA or Roth for yourself. Put your money into cheap, diverse index funds and keep adding to it. The greatest money strength you have on your side is that you have years for the market to create an avalanche out of the first few snowflakes of money you invest.
16. “Becoming a financially grown-up woman means unlearning a lot of money lessons society taught us as girls: that men are better at money and math (they’re not), that investing is scary (it’s not), and that the best route to financial stability is to marry a high earner (absolutely not!).”
Sara Rathner, credit cards expert at NerdWallet, wanted to share this with other women.
So throw all those old lessons in the garbage, because that’s where it belongs. Now, today, learn everything you can about managing your finances on your own.
There is nothing more empowering than being the boss of your own life, and of being an equal partner in your relationships. No one will ever care as much about your money as you will.
17. “Surround yourself with people with similar money values.”
Sue Hirst, Co-Founder and CFO of CFO On-Call shared her experience when we talked.
When I was in my 20s, I used to hang out with many people who didn’t share my money values. As a result, almost every time I went out with my friends, I splurged money recklessly due to peer pressure.
This was one of the top reasons I was unable to save as much money as I would have liked each month. Looking back, I wish I had either told my friends directly that I wasn’t comfortable spending huge amounts of money routinely, or made new friends whose financial values aligned with my own.
18. “Make saving a habit as soon as you start making income.”
Imani Francies, Finance Expert at US Insurance Agents, shared this little mind shift.
Saving becomes easier when you look at yourself with the same significance that you look at your power bill or any other bill. No matter what, you are going to do your best to pay your power bill. You should feel the same way about putting money into your savings.
Paying yourself first every month is investing in your future. Even if you can only put $5 into a savings account once a month, start early.
19. “Budget, but give yourself room to indulge.”
Lisa Thompson, Savings Expert at Coupons.com, offered up ALLLL the good tips when I spoke with her.
What’s your weakness: designer handbags, weekend getaways, fine dining with a great bottle of champagne? Make room for things you love by controlling what you spend in other areas.
20. “Cash back offers are everywhere, from brands like Rakuten, to credit card perks, to apps like Coupons.com. Use them!”
Thompson also offers this bit of advice. Refuse to pay full price for anything until you’ve looked for an offer. If you can pair a coupon or cash back offer with a store discount or sale, bam! That’s a savvy way to shop.
21. “Learn to use credit cards wisely.”
To tack on, Thompson also had this to say.
She makes a good point, too. Today, there are so many options for credit cards that offer perks from cash back to miles to points, as well as incentives, like a free Dash Pass for DoorDash or money toward a Peloton membership. The key, of course, is to not carry a balance and pay so much interest that it cancels out the perks. But if you can learn to use credit cards wisely by paying them off each month, the perks and incentives can help make everything from dining out to travel more affordable.
22. “Get a side gig by turning a passion into a money-making opportunity.”
Finally, Thompson ended our conversation with the quote above.
Do you love essential oils? Make balms, rollerballs, and pillow sprays, and sell them on Etsy or at pop-up shops.
Do you love thrifting, going to estate sales, and visiting antique shops? Find items worth more than what you’re paying and resell them! Facebook Marketplace is the perfect spot for that, and it’s free.
If you can turn a hobby into a source of income, that’s extra money for you to invest, save, or use as your slush/entertainment fund.
23. “Know your worth and advocate for yourself when negotiating.”
Amy Maliga, Personal Finance Consultant at Take Charge America, tells it like it is with her wise advice above.
Since the gender pay gap is still a real thing (ugh), it’s important to do your research on salaries for your position and advocate for yourself when negotiating a new job or discussing your annual performance review.
24. “Set goals and actively work toward them.”
Maliga offered me a simple but strong piece of advice above.
Whether it’s buying a home, starting a business, or embarking on world travel, setting financial goals gives a structure and framework to how you plan your finances.
25. “Forget FOMO. Don’t be afraid to say no.”
Maliga also makes a good point here.
TikTok made me buy it – or did it?
It’s way too easy to shop these days, and social media knows exactly what it takes to get you to press “add to cart.” When you’re tempted to buy something you hadn’t planned on, or friends are trying to talk you into activities you can’t afford, keep those long-term financial goals in mind, and don’t be afraid to say no.
Summary
We celebrate Women’s Equality Day every August 26th to commemorate the day the 19th Amendment finally recognized that women have the right to vote. But that same equality hasn’t trickled to the financial space yet, where the gender pay gap, wealth gap, and investing gap still exist today.
We’ve made a lot of progress over the decades, but a lot still needs to happen at the company, state, and national levels to achieve equal pay and equal opportunities for equal work. Until then, I hope these financial tips from awesome Millennial and Gen Z women serve as inspiration for how you can up the ante in your own financial life.
Are there any tips you’d add to the list? Let me know in the comments below!