Personal finance coach Michael Kim and I chat about common mistakes that new investors make, and how to avoid them. We also chat about Mike’s investing journey, as well as his relationship with money and why he started his coaching business.
- Passive vs Active Investing: passive is buying and holding with the goal of matching the market. Active is characteristically more trading activity (i.e. buying and selling frequently) with the aim of beating the market\
- Mike uses a passive investing strategy because there is the least amount of room for error and he believes it is the best use of his time TIME
- The four mistakes new investors make are:
- Not investing for a purpose. You should invest to achieve your financial goals. Answering that question will help you decide what to invest in
- Not having a strategy. Do you know what you are going to do if a recession occurs/lose your job/get closer to your financial goals? Definitely have a plan in place so that you know what to do in every single one of these scenarios.
- Investing without a foundation – it’s important to understand the basics of investing, and understand what you are investing in, such as different asset classes, what a TFSA is, what an RRSP is, etc.
- Thinking investing will solve all your problems because you need a lot of money to generate a significant return. There are other areas to focus your time on to potentially make more money (i.e. start a side hustle), then you will have a larger nest egg to invest and be able to generate larger returns on investment
Investing is not hard, it’s as simple as going to a website on Amazon and clicking buy
To start investing, you don’t start with investing.
First look at your financial goals, your current financial situation, and your budget and emergency fund
Once you’ve done the groundwork, you’ll know what to invest in
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Thanks so much for tuning in!