Wouldn’t you want to know the best investing secret from some of the smartest financial experts in the world? Well you’re in luck!
We asked over 20 investing experts to share their best investing “secret” for anyone just getting started with investing. So whether you’re a newbie investor or someone with a little experience, you’ll find an investing hack just for you!
1. Focus on Risk Management
Investing done right is focused on risk management. It is a simple, mathematical truth baked into how money compounds to create wealth. A 20% loss only requires a 25% gain to get back to even, but a 50% loss requires an astounding 100% gain and a 90% loss requires an impossibly large 900% gain — just to get back to even. The math is unequivocal: It is not how much you make when you are right that determines your wealth, but how much you lose when you are wrong.
— Todd Tresidder, Financial Coach at FinancialMentor.com
2. Be Hesitant with Friendly Advice
You know that stock tip your friend/family member/co-worker has for you that is a “sure thing”? Newsflash: it’s not! I’ve had countless people approach me looking for my approval on some random stock tip that someone (usually with no investing experience) has given them the inside scoop on. Next time this happens, the easiest way to make money is to not invest in it.
— Jeff Rose CFP, founder of Good Financial Cents and author of Soldier of Finance
3. Live Within Your Means
The best secret I can provide is to save more than you make and live within your means. Although this is not a new idea and is rather simple I am amazed at the success my clients have, when they do that one simple thing. High income will not make you wealthy, saving and spending responsibly can.
— Damian Rothermel, CFP at Rothermel Financial Services
4. Invest Automatically
The easiest way to get started investing is to do it automatically, just like a 401k. If you want to contribute the max to your Roth IRA each year, set up direct deposit from your paycheck to automatically deposit $192.30 (if paid bi-weekly) into your IRA account. Most brokers offer this option, but you can simply ask for the broker’s routing number and then your account number.
— Robert Farrington, founder of The College Investor
5. Think Long-Term
Don’t try to time the market — you will not succeed. It is impossible to understand, take into account and predict all of the forces that affect short-term market movements. Instead, stick with winning long-term investments that you carefully and methodically research.
— Anton Ivanov, founder of Financessful.com