The 3 Best Pieces of Investing Advice I’ve Ever Received

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Read on for the best investment advice that this personal finance writer ever received — and it’s not “how to pick stocks.” [[{“value”:”

When I look back on my life (so far) of saving and investing for retirement, of being a homeowner and a small business owner, I’m incredibly grateful. I get to work with fun, brilliant, talented, hilarious people. I also get paid to work from home and think big thoughts about the global economy.

And I’ve learned a little something from every job I’ve had, every book and blog I’ve read, and every financial experience I’ve had along the way. Here are a few of the best bits of investing advice that I’ve received throughout my career in personal finance and my life as an everyday investor.

1. “Don’t try to pick stocks”

One of my first jobs early in my career had a nice financial wellness benefit for employees. We got a free annual meeting with a financial advisor. This was a good chance to get professional help with our 401(k)s and IRAs, see how we were investing, and talk about retirement planning. (This was a really useful benefit, and more companies should do this!)

At the time, I was still in my early 20s, so retirement was a long way away. But the financial advisor said something that has stayed with me all these years: “You’re going to make your biggest money on the job. Not by picking stocks.”

That’s right: the financial advisor didn’t tell me to go out and buy individual stocks or “memecoins” (which thankfully didn’t exist in those days). He said to just keep investing in the broad stock market through the S&P 500 index and other diversified index funds.

Most people who are not professional investors but who have other valuable career skills, are going to make more money by focusing on their actual careers, not by day trading and picking stocks. Instead of trying to beat the stock market, instead of trying to outwit millions of other investors who have more money and time than you do, most people should invest that effort into their careers. Try to get pay raises and promotions. Learn new skills and get new certifications. Start a side hustle to make extra cash.

2. “Your income will go up”

When my wife and I bought our first house in our late twenties, we were ecstatic; we loved the house, it was in a perfect neighborhood, and it had lots of character and features that outshone the rest of the homes that we had toured. But this was not a “starter home” for us; it was a bit of a stretch financially. The mortgage payment ended up being $400 more than we were paying for renting an apartment.

Sometimes that happens; you don’t always end up buying the house that perfectly fits your initial budget. But even though we loved the house and had great credit and were not taking excessive risks with our monthly budget, I was still concerned: “Can we really afford this house?” But our real estate agent said something reassuring that I’ve always remembered: “You’re young, and you’re upwardly mobile. Your income will go up.”

It turns out that we lived in that house for 17 years, and we raised two babies there, and we never missed a mortgage payment. Not everyone has such a good experience buying a home during times of high prices and housing shortages. We were incredibly fortunate, and we live in a part of the U.S. that has lower housing costs than a lot of big cities.

Our real estate agent was right! We went on to make more money over the years, and our debt became more affordable compared to when we were young and relatively “house poor.” Debt can be good. It helps you afford a better life than you could have without that mortgage, auto loan, or credit card bill — and over time, over the long run of their working years, most people can afford their debt.

3. “Just keep buying”

People often have questions about investing in the stock market, like “when is the right time to buy stocks?” or “how much money should I invest in stocks?” These questions are misguided. The truth is, research shows that even when the stock market is at all-time highs, even when stocks feel “expensive,” most long-term investors should just keep buying.

There’s a great book by this exact title (Just Keep Buying) by finance blogger Nick Maggiulli, COO of Ritholtz Wealth Management. This is one of the best investment books I’ve ever read, because it shows (based on data analysis and historic investment performance) exactly why “timing the market” doesn’t work.

When you buy stocks, yes, there’s a chance the price will go down and you’ll lose money. But by not buying stocks in an appropriate way for your long-term investment goals, you can lose even more money by missing out on gains.

Instead of worrying about “when” to invest, just keep on investing, month after month, year after year, in a diversified portfolio of ETFs. Don’t try to time the market, don’t worry about highs or lows in stock prices — let the long lifespan of your time horizon grow your money for you.

Check out Nick Maggiulli’s blog (ofdollarsanddata.com) for more great insights about how to invest.

Bottom line

These three bits of investing advice might sound simple, but lots of people need to hear them. Investing is a complex, long-term endeavor. Most day traders lose money, and most individual stocks don’t beat the market. But if you’re lucky, over the course of your working life, you’re going to hopefully increase your income and your investment portfolio.

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