The Four Big Reasons Most Newbie Investors Totally Fail

“Yeah, I’ve thought about investing. It’s a tough gig, though. Too risky, too confusing, too expensive.”

Whether you’ve heard such a statement or find yourself echoing the exact same sentiment, you’re certainly not alone. There’s an often-cited statistic that 90% of investors never make a dime; however, the sources for such a stat are dubious.

Besides, in the digital era with so much information available, there’s perhaps no better time to succeed as an investor. The technology is easier than ever to manage and you can come by tips on investments at a moment’s notice.

That being said, if it is true that most investors fall flat, what’s the deal? What separates the success stories from those who end up losing it all?

The frequent failure of financial newbies is rooted in ffour rookie mistakes. Some of these snafus may seem glaringly obvious; however, newcomers to the field of finance still make them time and time again.

They Don’t Have a Mentor

When it comes to managing your money, flying blind simply is not an option. However, newbies often find themselves in the same snag: there’s so much investment advice out there but they have no idea who to listen to. Therefore they end up listening to their gut and losing out as a result.

Having a mentor who can show you the ropes is a crucial piece of financial success. For example, you may want to familiarize yourself with success stories from the Tim Sykes Challenge who’ve made fortunes from small investments via penny stocks.

While there are plenty of “gurus” out there to guide you, it certainly pays to have someone with tried-and-tested experience helping you understand what to do and what not to do.

They Try to Invest Too Much, Too Fast

If you expect to dump a boatload of cash into any given investment and see fat returns, you’ve got another thing coming.

In the world of investing, slow and steady often wins the race. For starters, don’t invest what you can’t afford to part with. Start with your disposable income and use anything you’ve gained through previous investments to reinvest versus dipping into your checking and savings accounts. Once you’ve gotten your feet wet and are seeing legitimate returns, only then can you think about spending big.

They Expect Speedy Results

Overnight results simply aren’t going to happen, plain and simple. It may take years before you actually see returns; however, your persistence is exactly what separates you from those who fail.

But persistence doesn’t mean dumping money into risky investments. Instead, combine the aforementioned steps (think: smart, proven investments with small capital) and build up from there. Don’t assume that just because you haven’t become a millionaire overnight that you’ve somehow failed.

They Don’t Actually Try

Finally, you won’t make a dime through investing until you actually try. That means less reading books and speculating and actually getting started. Likewise, trying also means putting effort into your portfolio and paying close attention to your investments versus expecting them to sit there and net you cash.

The barrier to entry to becoming a successful investor is arguably lower than ever. Rather than fall prey to the problems that plague newbies, take the necessary steps toward making smart, sensible investments.

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