Investing doesn’t have to be complicated. One of the biggest keys to investing is don’t try and do it all. Just because a new influencer on Instagram or TikTok is claiming to make a bunch of money with their new “system” doesn’t mean you have to do it (or even pay attention to it).
Fads and systems come and go. Block out the noise and don’t try and do it all.
Investing Defined
Investing seems like a simple concept, but it’s actually frequently misconstrued. It’s a systematic approach to putting your money where it has an above average chance to grow over time.
For example, both the stock market and real estate have proven historical returns (although past performance isn’t 100% indicative of future performance).
Investing into one of these asset classes is likely to bring future growth as well. Of course there’s no telling how much or how long it will take, but there’s an above average chance.
Investing vs Speculation
As we continue with our definition of investing, it’s important to address investing vs speculation. Many people think they are investing while they are actually speculating. Without knowing it. Some examples of speculation:
- Putting money into an unproven and unknown stock with plans to take the money out in three months with exponential returns
- Pulling money in and out of a cryptocurrency with plans to repeatedly sell the highs and buy the lows
- Buying a house with the thought it’s going to double in price in one year before you sell it for a massive gain (without making any repairs or adding any value)
Make sure not to confuse investing and speculation because they are very different things and will produce unexpected results if you’re not careful and informed.
Investing Overwhelm
Many new investors talk about how overwhelming things are. There are so many different things to invest in and so much “advice” on what to do with your money. Many people get overwhelmed and simply give up.
It’s information overload and to the beginner, can seem like a hopeless path.
Start Simple: Pick One Thing
For those feeling overwhelmed, there’s a simple approach. Start simple and pick just one thing.
- Put $100 into an index fund
- Automate $150 a month into an investment account
- Move $200 from your checking account to a high-yield savings account
These are all simple and easy things anyone can do on their phone, tablet, or computer. Don’t worry about the results yet, the important thing is to pick one thing and just get started.
The simple act of getting started feels amazing and builds momentum into the next action.
Learn and Study
Take some time to research and study a potential investment and/or asset class. Here’s where it’s important to not try and do it all because you can easily get lost in the weeds with a number of investments.
Just pick one investment or asset class and research that. Avoid the temptation to look at other things even though they appear exciting. Try books, podcasts, YouTube videos, meetup groups, working with a mentor, etc.
Once you’re done, you’ll have a great foundation where you can learn more about that asset class, begin to invest more, or move on to another investment type. You’ll feel a sense of accomplishment because you’ll have an understanding of at least one thing and can take action from there.
Add Something Else
This is the point where you can add something else. Research something new or get into another investment class altogether.
The thing here is that you have already learned one thing really well so you can be comfortable trying something else. It’s important not to jump too far ahead here though. If you’re not comfortable with the first investment, don’t move on to the next thing.
Beware the Shiny New Object
This is something that inflicts us all: the shiny new object. Maybe you heard someone on a podcast or a YouTube video crushing it in short-term rentals. Or a day trader who has done really well over the last six months.
These are working for one person but that doesn’t mean you should be jumping around from investment to investment just because it’s new and sounds cool. You’ll eventually get to new investments but if you’re rushing to do it, you’re likely rushing into failure.
Conclusion
With investing, don’t try to do it all. You don’t need expert level knowledge to succeed with money. There are many people who have done really well investing in only one thing.
Real estate moguls don’t know everything about the stock market and skilled stock pickers probably don’t know real estate that well. That’s because you need time and practice to acquire knowledge.
Jumping around from investment to investment doesn’t give you the opportunity to acquire the needed knowledge.
Agree or disagree that you shouldn’t try and do it all with investing?
