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Have you ever thought about starting to invest? If so, what stopped you from actually following through? Many people, especially millennials, are afraid to invest their money because it is not necessarily a sure thing, right? It can be hard to let go of your money in hopes for a return without a guarantee.
If you are avoiding investing your money because you have heard or believed a myth, you may actually be missing out on an opportunity to grow your investment fund or retirement account. Below, we will debunk some investing myths to help you make better choices.
1. You Need to Check Your Accounts Daily
If you over check your investment accounts, you will obsess about them and even a small change will affect you. Instead of checking your investment apps and accounts each day, you should check them every few days or once a week.
The stock market is going to fluctuate on a daily basis, hourly basis, and if you continue to sit in front of the computer and constantly hit refresh, you will drive yourself crazy.
If you do notice that the stock market is declining, avoid looking at your account as you will panic. Remember, your investment is not completely lost and as the stock recovers, so does your investment.
2. Investing is Expensive
Many people think that investing is expensive because of the fees that are tacked on. In fact, you do not have to pay high fees to invest and many times, you can invest your money for a small fee.
Some fees are unavoidable when it comes to investing and that is just part of the game, but these fees do not have to be ridiculous in nature. For example, some employers will charge an administrative fee to deposit into your 401k, while you may not be able to avoid these fees, you can contribute enough each week or month to make sure you get the employer-matched funds, which will help cover those fees.
3. You Must Pick Stocks
When you think of investing, most people default to the stock market and think about buying and trading stocks. While this is a section of the investment niche, it is just that – a small section.
You can invest your money however you want, and there are a mix of different investments you can choose from. For example, you can invest in companies from the US, foreign companies, and even in bonds. The choice is yours and you can work alongside of a financial advisor to help you choose the right ones.
4. Only Risky Plans Succeed
When you invest your money, you may not be comfortable choosing a risky plan. Many people believe that the only way to make money is to be risky, but this is not true. While your return may take a little longer, you can be successful at investing while staying conservative or a mix of both. You can use our investing vs. student loan payoff calculator to do a cost and benefit analysis.
5. Only Rich People Invest
You do not have to be rich to invest your money. This myth stops a lot of people from investing and it is not a wise idea to believe it as you may be missing out on a lot of opportunities.
In fact, many people find that an IRA is the best investment option for them because it does not take a lot of money to invest and you have a lot of options.
In addition, many people find that EFTs are another great option as you can buy and trade them online and you can usually purchase them for less than one hundred dollars. Sometimes, you will be required to invest a minimum of $1,000 first, which is still substantially less than other options.
If you are thinking about investing your money, it is important that you spend time looking over all of your options. There are many investing myths that circulate around and they may prevent you from investing. The above debunked myths should help you understand investing a little more and as you can see, anyone can invest and turn a profit.
Author: Jeff Gitlen