11 investing tips I wish I could tell my younger self
Flickr / Tristan Bowersox
Sometimes I look back on my past as a young investor and want to kick myself. I didn't really know what I was doing back then, and made a number of mistakes that cost me money in the long run.
I did learn a lot and truly enjoy investing and saving now. But I wish I could go back in time and offer my younger self a few bits of advice. Here's my list of investing tips to the "young me" that'll hopefully spare you the same mistakes.
Flickr / Raúl Hernández González1. Understand the value of compound returns.
Retirement is one of the last things you're going to think about when you've had hardly any time in the workforce. "What? Retirement? I'm only 22!" As crazy as it sounds, investing money in these early years is a crucial part of having a large nest egg upon retirement.
The earlier you start investing, the more time that money has to grow. And with a long time horizon, you don't have to be overly concerned about the ups and downs of the market.
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2. Familiarize yourself with retirement accounts.
If you have some money, it may be tempting as a young person to simply open a brokerage account and begin buying and selling. But it's important first to understand the basics of retirement accounts and the advantages they offer to investors. Individual Retirement Accounts (or IRAs), along with 401K plans can allow you to save for retirement and get great tax benefits along the way.
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3. Don't buy that thing — invest your money instead.
I cringe when I think about the useless stuff I bought when I was in my teens and twenties. Articles of clothing, music, movies, computer games, expensive meals with friends... I had a lot of fun, but I could have had as much fun living more frugally, and I think about how much money I'd have now if I'd bought stocks, instead.
Even a small amount of money placed in an index fund at age 18 has the potential to grow into a substantial sum. I wish I could go back and tell my young self to put at least some of my spending money in an account that would build value for my future self.
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