3 Common Mistakes Young People Make When Building Wealth – Business Insider
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- The most common mistake that young people make is that they wait too long to start investing.
- Instead of waiting until you’re debt-free to start investing, start the habit of investing small amounts now.
- If you’re still going all-in on crypto, consider limiting your crypto investments to 5% of your overall portfolio.
Ramit Sethi, author of the bestselling personal finance book “I Will Teach You To Be Rich” and a new journal to accompany the book, has seen young people make too many of the same mistakes while building wealth.
The key mistake most young people make, according to Sethi: Waiting too long to start investing.
Sethi advises young people to use compound interest to their advantage and start investing as soon as possible. “Time is on your side. When you’re young, it feels like $100 a month wouldn’t add up to that much. But when you run the math, it’s quite powerful.”
Here are three common mistakes young people make while building wealth, and what you can do instead.
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Waiting until your 40s to start investing
Instead: Start investing small amounts on a regular basis
“The No. 1 mistake by far,” says Sethi, “is that young people wait to start investing until their late 40s.” He adds that most young people justify putting off investing because they think they don’t have enough money to start.
However, starting with as little as $50 every paycheck can go a long way in the long run. Instead of putting off investing, do your research and start small.
Waiting until you’ve paid off all your debt to start investing
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