(TSI) oops | mistakes
Being 25 is great, but probably not for the reasons you’d think.
It’s actually because we have time on our side!
I’ll be honest, I used to fall into the trap of thinking I’d just “wait until I make real money” to start investing.
But I’ve since learnt that the real “cheat code” to investing is simply starting now.
Why Investing Early Matters More Than Most People Realise
Starting now allows you to make full use of compounding – something that can turn small amounts into something huge, especially if you’ve a runway of 30 to 40 years.
If you start now, you won’t need to stress out later in life thinking how you’re going to achieve your financial goals.
Plus, building healthy financial habits today will shape how we handle money for the rest of our lives.
I know how easy it is to get distracted by all the noise.
So here are the three biggest pitfalls I’ll be watching out for to make sure I don’t slow my own progress.
Mistake #1: Waiting Too Long to Start Investing The “I’ll Start Later” Trap
I’m sure many young people also tell themselves that their paychecks are still too small right now, or that they need to save up a huge amount to start investing.
Some might even find the stock market too intimidating.
However, the longer you push investing down that to-do list, the more years of compounding you lose.
And time is the one thing you can never get back.
The smart thing to do now is to just start.
Even if you’re just putting away a small amount every month – say S$100 – it’s still better than waiting five years to start with a bigger sum.
Right now, it’s about building the habit and letting time do the work for you.
Mistake #2: Chasing Fast Money Instead of Building Wealth Speculation vs Investing
With all the meme stocks, crypto moonshots, and “I made S$1 million in a day” stories on social media, it’s so easy to get caught up in the hype.
But one thing I know for sure is that chasing fast money relies more on random chance than on sound investment principles.
The adrenaline you get from short-term wins feels great, but it creates unrealistic expectations about investing.
Why Speculation Can Backfire
Speculative assets are highly volatile, and they tend to trigger our loss aversion instincts, which often results in decisions made based on emotion rather than logic.
Sometimes, a big loss early on can be so demoralising that you want to quit investing entirely.
My tip?
Think of investing as a plant that you need to take care of before it blossoms.
Focus on high-quality businesses like Keppel Ltd (SGX: BN4), or Exchange-Traded Funds (ETFs) like the SPDR Straits Times Index ETF (SGX: ES3), which provides instant diversification across Singapore’s 30 largest companies, and let compounding work its magic.
Story continues