We’re constantly told to invest our money, but could we be putting our money in the wrong places? Financial expert Rachel Cruze, co-host of The Ramsey Show and Dave Ramsey’s daughter, recently outlined the biggest investment mistakes you can make.
In a TikTok video, Cruze goes over the worst ways to invest this year. Here’s what Cruze says you shouldn’t waste your money on in investments, so you don’t make these mistakes.
Read More: Rachel Cruze: 3 Ways I Live Frugally
Find Out: Start Growing Your Net Worth With Smarter Tracking
Single Stocks
If you’re pouring all your extra money into one or two stocks, you might not see a huge return. “Always remember diversification is key,” Cruze said. She recommended instead to put your money in mutual or index funds.
Keep Financial Literacy Month going — learn how the MoneyLion app helps you track, manage and move your money in one place.
Anything Without a Long Track Record
When you’re investing, you want to look for safe bets. Cruze cautioned against anything that seems like a fad — even Crypto. Cruze said to instead look for established investments that “may have some dips for sure, but it’s going to grow over time and you can see it and be secure in it.”
Not Investing at All
If you’ve passed on the idea of investing at all, that’s also not ideal. Cruze said abstaining from investing out of fear or putting all your extra money into a high-yield savings account won’t net you as much as investing long-term. If you’re doing that, you’re basically preventing yourself from acquiring wealth.
“You’ve missed out on so much opportunity for growth,” Cruze said. Instead, you should be investing in a way that prepares you for the future.
Cruze said that as long as you’re debt-free and have a fully funded emergency fund, you should be investing 15% or more of your income in retirement. If your employer offers a 401(k) or 403(b) match program, max it out. Cruze also advised that you open a Roth IRA as well.
Though these tactics might not show immediate growth, Cruze said that, over time, these will get you a return, and you’ll be happy you started contributing. “Slow and steady wins the race. Consistency is key when you’re investing.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
