Recently, I came across a fun question, “What would be the single piece of investing advice you would give yourself if you could travel back in time?” Here are the best responses.
1. Compound Your Wealth: Start Investing Early and Often
Start investing at a young age, one advised, even if it’s only a tiny amount, like $10 per month, and gradually increase the amount. Furthermore, they warned against marrying someone with a different approach to money management, as it can lead to financial stress and potential debt.
2. Invest in Warren Buffet’s Approach: The Best Decision You’ll Ever Make
One would advise their past self to tell their father to invest the money differently. Instead of putting money into banks or 401Ks, they would instruct their father to travel to Omaha and find Warren Buffet to give him all their money.
The person believes that investing in Buffet’s approach to investing would have yielded better results than traditional methods.
3. Earn More, Save More, Invest in the Total Market
To become successful in investing, a person should earn more, save more, minimize fees, and invest in the total market. Several emphasized that wealth is more important than income and that the system favors wealth over anything else.
4. Time in the Market Beats: Don’t Sell Too Early
“Wait to sell investments before it is necessary.” This user believes that time in the market is more beneficial than trying to time the market.
They’ve regretted selling shares too early, missing out on potential gains, and further recommended holding onto investments for as long as possible and only selling when there is a critical need for the funds.
5. Invest in What You Love: The Risks and Rewards of Individual Stock Investing
Have you ever heard of “YOLO” investing? One stated that buying some stock might be a good idea if there is a relatively new company whose product you love. However, they also noted that investing in individual stocks can be risky, and it’s essential to research and consider diversifying your investments.
6. Consider a Steady and Low-Risk Approach to Investing for a Comfortable Retirement
If you want to figure out where to start, consider a steady, low-risk approach to investing. One user suggests investing 10% of your income in an S&P 500 index fund. By taking this approach and consistently contributing over time, you can retire comfortably in your mid-40s or 50s. Sounds pretty good.
7. Stay Curious, Keep Learning
However, many advised to stay curious and continue learning as essential investing advice if they could travel back in time. Educating oneself about investing and financial planning is crucial for making informed decisions and maximizing returns.
8. Diversification and Long-Term Investing
When investing, people should consider themselves something other than good traders capable of beating the market. It is essential to recognize that attempting to do so often leads to losses and underperformance. Instead, they should focus on building a diversified portfolio and investing for the long term.
9. Patience and Dry Powder: The Key to Smart Investing
Someone warned to invest some at a time and wait for the right opportunity to buy. During the last recession, they bought too early and quickly, which resulted in a significant loss as the market continued to drop.
They further emphasized the importance of having dry powder, which means holding onto cash or assets easily converted into cash to take advantage of opportunities when they arise.
10. Meme Stocks: Proceed with Caution and Wise Decision
Finally, many people advised avoiding meme stocks, warning that investing in such stocks can lead to losses. However, one shared their experience of investing in meme stocks, which resulted in their taxable account being down while their Roth account was up by 5%.
They further cautioned that making wise investment decisions is essential and not letting hype or social media influence those decisions.