First-time investing mistakes to avoid

girl in a blue blazer standing with arms crossed

The notion of investing money into stocks and mutual bonds may seem overwhelming for some individuals, particularly those that are younger.

While it's been almost a decade since the recession started, many of today's young adults - those in their 20s - grew up in the midst of a serious economic downturn. Those experiences have left many of them gun-shy about investing their hard-earned money.

But this is the wrong approach to take, especially when it comes to planning for the future. If you're part of the group that has yet to start investing, you should start to rethink your hesitance. You are not only missing out on the rewards of the present, but also of your future.

You will have to develop an understanding of stock market language, but it will be worth it, because when your 401(k) or Individual Retirement Account continues to grow, you can rest easy knowing you can ultimately enjoy your retirement years.

Getting started with investing is in some ways like learning how to ride a bike: You'll need guidance at first to know which first-time mistakes to avoid. Once you get a good grasp on everything, you can move forward with confidence.

newly grown plants in small pots
It's time to start investing so your money can grow.

Investing too little
When just starting out, it's understandable that you might be hesitant when it comes to deciding just how much to invest.

According to a survey from the investment firm T. Rowe Price, a majority of millennials have opted into their employer's 401(k) program [1]. This is a good start - except that many are saving and investing only 3 percent of their yearly salary.

Three percent is too low if you plan to retire and live comfortably because ideally, you want to save 10 percent of your salary. Ten percent may seem high, but this money is usually taken from your paycheck pre-tax, so the financial impact will be less severe on a monthly basis.

The next mistake first-time investors make centers around risk. All your life you've been told to be cautious, but there have surely been those instances where you decided to take a risk, whether it was trying a new food or staying out later than your parents allowed.

Risk is essential for building a successful investment strategy. Throughout history, there have been numerous stories of investors who had opportunities to get in on the ground floor of a hot technology company, only to pass it up and witness unprecedented growth from that startup.

Holding onto money in current economic conditions may actually decrease its value because if it is not working for you, it does not have an opportunity to grow.

Making unwise decisions
Starting off, you'll probably have your investment plan set to some type of automatic setting. This is good, but it can't always stay like this, Acorns advised.

As the market changes, you have to stay on top of everything to ensure your money is still on track to meet your future needs. You don't want to invest in stocks that have not been performing in recent months.

Likewise, another common mistake inexperienced investors make is assuming they don't need help. While you want to maintain an independent spirit when investing, don't hesitate to seek out professional advice, especially early on in your journey.

You can pay for consultation, or head to the bookstore to find more help. Either decision will help you create a portfolio that is diverse and builds up your funds at a healthy pace.

Investing is a scary, yet satisfying process, but you have to start the process if you want to build a better future. Seek out help when you need it, and as time passes, you'll avoid some first-time investing mistakes.

[1]. T. ROWE PRICE: MILLENNIAL 401(K) SAVERS HAVE BETTER FINANCIAL HABITS THAN BABY BOOMERS

[2]. 7 Rookie Investing Mistakes (and How to Avoid Them)

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