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6 investing myths that could be costing you thousands

Many people don’t putt money anywhere beyond their 401(k), if that. The reasons? Everything from “I don’t earn enough” to “investing feels like gambling.”

It turns out, this isn’t unusual. More than half of Americans (57%) report never investing outside their 401(k)s, and Investor Sentiment Report data. Among those who haven’t invested at all, nearly seven in 10 cite a lack of money as the reason.

But here’s the real question: What’s the financial cost of believing these myths? When money’s tight, it’s hard to imagine setting any of it aside. But the truth is, misconceptions about investing aren’t just harmless beliefs — they can quietly sabotage your financial future.

Delaying or misunderstanding investing can quietly cost you tens — even hundreds — of thousands of dollars lost over a lifetime.

spoke with top financial experts explain how these myths take hold — and how to overcome them. Whether you’re just getting started or rethinking your investment strategy, understanding these misconceptions is the first step toward smarter, more confident investing.

Here are six investing myths that could be costing you money.

1. I’ll start investing when I have more money / Investing is only for the wealthy

Many people think investing is something that happens after you’ve “made it” — that it’s for people with thousands of dollars sitting idle in their accounts. But that mindset can quietly lock you out of wealth-building for years.

“It’s a common psychological trap called ‘learned helplessness’,” says Raoul P.E. Schweicher, managing partner at . “People convince themselves that wealth-building isn’t for them, so they never even try.”

The cost of that belief is real. With inflation averaging around 3% annually, money sitting in a regular savings account is actually losing value every year. Waiting until you’ve saved $5,000 or feel might mean waiting too long — life happens, your car needs repairs, medical bills pile up, etc., and you never start, Schweicher explains. You then miss out on that could have doubled or even tripled that money.

“Every month someone waits costs them actual money,” says Ali Dhanji, financial advisor at . “A 25-year-old who invests just $100/month will have roughly $240,000 by age 65 (assuming average 8% market returns). If they wait until 35 to start with that same $100/month? They’ll have about $95,000. That decade of waiting cost them $145,000 — more than they’ll contribute in total over 30 years.” That’s the power — and the cost — of time.

Investing isn’t just for the wealthy — it’s how people can build wealth over time.

“The real kicker?” says Dhanji. “Most brokerages now let you start with literally $5. There are no minimum balances. You can buy and ETFs. The barrier people think exists … doesn’t.”

2. You can get rich quickly with the stock market

Many have fallen for this one — they were sure would skyrocket, only to watch it tank almost immediately. Shortsighted (and inexperienced), they sell at a loss.

A few years later, the same stock not only recovers, but gains even more ground. It’s a hard lesson in patience — give it time, and don’t overreact to short-term price swings.

Stories about wins, penny stock successes and getting in early on “the next big thing” make it seem like the stock market is a shortcut to wealth. But in reality, lasting success comes from time in the market.

“Many investors underestimate the effect of time on their investment portfolio,” says Pedro M. Silva, CRPC, CFF, principal partner at . “When you look at Warren Buffett, you can see he is successful, but it’s easy to miss that he started in 1942.”

The real secret? Regular, consistent investing.

Silva adds, “The time component can offset mistakes and enhance the power of compound interest. Like any long journey, the sooner you get started, the better.”

3. Active portfolio management will deliver higher returns

Many people assume that to be serious about investing, you have to constantly tweak your portfolio or hire a professional to do so. But this belief can actually cost you money.

“One of the biggest investing myths I see is that spending more time managing your investments or layering on complex strategies automatically leads to better returns,” says James Hargrave, MBA, CFP, CLU, founder of . “While that might work in the short term, the evidence shows that, over time, individual investors who tinker more tend to underperform those who take a disciplined, long-term approach.”

Behavior is often the culprit. “The more often you adjust your portfolio, the more opportunities there are for emotion to creep in, buying after markets rise or selling after they fall,” Hargrave explains. “In contrast, investors who define their asset allocation, sub-allocations and asset location clearly, then review to rebalance just two to four times a year, tend to fare far better.”

That’s easier said than done. Hargrave recalls one investor who meticulously tracked insider trades, following when executives and politicians bought or sold their stock. Over time, their portfolio underperformed by several percentage points while taking on more risk. “It’s a good reminder that complexity doesn’t always equal success,” he says.

Cost is another factor. Lauren M. Niestradt, CFA, CFP, senior portfolio manager at , notes that actively managed products are generally more expensive than passive strategies, like . Those higher fees add up and reduce overall returns — and actively managed funds can even underperform the market, meaning you might pay more for less.

Her advice: Keep it simple. “Search for investment managers or investment products that are passively managed, or track an index. These types of strategies are low cost and always track the market return, so investors never underperform the market.”

Investing success isn’t about constant activity; it’s about consistency, discipline and .

4. You need to time the market to succeed

If only it were as easy as waiting for the market to dip before jumping in and then selling right at the top. But it’s not. Trying to time the market isn’t just stressful — it can actually cost you a lot in missed gains.

According to a , the cost of waiting for the “perfect” moment to invest can be surprisingly high. Schwab compared five hypothetical investors over 80 20-year periods, each using a different strategy. The one who invested immediately each year upon receiving their cash — without waiting for a dip — ended up with $170K, only about $15,000 less than the investor who somehow timed every purchase perfectly. Meanwhile, the person who stayed in cash, waiting for a better opportunity, finished with just $47,357.

“This is the myth that keeps people sitting on piles of cash forever, waiting for the ‘perfect moment’ that never comes,” says Dhanji. “They watch the market climb month after month, convinced that any day now there’ll be a crash and THAT’s when they’ll jump in. Except when crashes actually happen, they’re too scared to invest then too.”

In other words, even bad timing beats not investing at all. The bottom line? Time in the market beats timing the market.

5. Investing is gambling

Many people avoid investing because they think it’s no different from walking into a casino and betting on red or black. The key difference: investing is about allocating risk wisely, and thinking long-term.

“I think the biggest myth in investing that keeps people away from properly allocating risk is that they view investing as gambling,” says Joseph M. Favorito, CFP and managing partner at . “When it comes to investing, if you have a broadly diversified portfolio, the odds are always in your favor in the long run. Statistically speaking, the stock market is positive 75% of the time … So, while you might not make money immediately. If you stay long enough, it’s not much of a gamble.”

Unlike a casino game, a well-constructed portfolio is designed to grow over time, leveraging the power of compounding and market growth. Short-term losses may happen, but they’re part of a bigger, long-term strategy — one that historically favors disciplined investors.

6. Don’t let your portfolio out of your sight

Many investors make the mistake of constantly watching their portfolio, reacting to every market dip or rally. This is a behavior trap that can do more harm than good.

“This is horrible advice for investors,” says Caleb Bogia-Curles, CFP, founder at . “The greatest risk to a well-diversified portfolio is not the investments going off the rails, but the investor making a terrible decision.”

Behavioral finance — the study of how emotions and biases impact financial decisions — is often the real danger. “Behavioral finance, our attitudes and predispositions around money, are FAR bigger drivers of our future outcomes than what we invest in,” Bogia-Curles says.

He’s seen the consequence first-hand: “I have seen too many people panic sell during 2008 and spring of 2020, and too many people greedily buy into the big tech craze and get burnt.”

The takeaway? Sometimes the best move is doing nothing. Markets recover over time, but emotional reactions can permanently derail long-term strategies. Set a plan, stick to it and let time — not stress — do the work.

Bottom line

Investing isn’t about luck, timing or having thousands of dollars to spare — it’s about mindset, patience and consistency. The biggest cost of believing these myths isn’t just missed opportunities; it’s the slow erosion of your financial potential. Start small, stay diversified and give your investments time to grow. The earlier you begin — and the more consistently you stick with it — the greater your odds of turning small habits into lifelong wealth.

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