Important Investing Mistakes That Could Have A Big Impact
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Investing in stocks on the stock market presents you with a great way to earn income. Without the knowledge of how the stock market works many people leave important decisions about their portfolios up to their brokers. Some basic investing errors can prevent your portfolio from reaching it's full potential. Here are the mistakes that will cost you the most when investing in the stock market. The First Mistake - Waiting Too Long to Start Investing There is no minimum starting age to invest in the market and it has been suggested that starting younger is better. The traditional perception is that you are supposed to start investing when you are older and wiser and have plenty of money behind you to invest in the market with. This is wrong and this "traditional" idea is stopping a lot of people from investing in the market and tapping into a vast amount of unused potential. You could see the earnings that you could make shrink, and all you would have to do is wait as little as ten years. If you start investing around $170 a month your investments will earn approximately $2,114,379 by the time you are 75. These figures are based upon a year on year ARR (Annual Return Rate) of approximately 10% during the life of your investment. By the time you reach 75 the same investments at the same ARR will be worth approximately $800,000 if you start when you are 36. The difference is a whopping 1.3 million dollars. Even if you can't afford to invest $170 per month, setting aside an amount you can afford is still a very good idea. It doesn't have to be a massive amount of money to ensure that you get a great return on your investments. Not Knowing What You The Company Does - Another Error Researching the stocks you are going to buy should be the first thing you do before putting you money on the line and yet there are so many people who know nothing about the company they have just become a part owner of. You wouldn't blindly hire an employee without looking at the resume and calling all their references, so why would you blindly invest your money without looking at how the company has done in the past? It is vital that you understand what you are buying into and how it will benefit you in the long run. It is also very important to remain impartial when choosing the type of stocks that you buy. Stocks that you picked based on research and careful planning are more likely to bring returns compared to the stocks you chose based on "feelings".