{"id":967239,"date":"2026-05-17T19:55:43","date_gmt":"2026-05-17T19:55:43","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/967239\/"},"modified":"2026-05-17T19:55:43","modified_gmt":"2026-05-17T19:55:43","slug":"3-biggest-investing-mistakes-to-avoid-in-your-20s","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/967239\/","title":{"rendered":"3 Biggest Investing Mistakes to Avoid in Your 20s"},"content":{"rendered":"

Being 25<\/a> is great, but probably not for the reasons you\u2019d think.\u00a0<\/p>\n

It\u2019s actually because we have time on our side!\u00a0<\/p>\n

I\u2019ll be honest, I used to fall into the trap of thinking I\u2019d just \u201cwait until I make real money\u201d to start investing.\u00a0<\/p>\n

But I\u2019ve since learnt that the real \u201ccheat code\u201d to investing is simply starting now.<\/p>\n

Why Investing Early Matters More Than Most People Realise<\/strong><\/p>\n

Starting now<\/a> allows you to make full use of compounding \u2013 something that can turn small amounts into something huge, especially if you\u2019ve a runway of 30 to 40 years.\u00a0<\/p>\n

If you start now, you won\u2019t need to stress out later in life thinking how you\u2019re going to achieve your financial goals.<\/p>\n

Plus, building healthy financial habits today will shape how we handle money for the rest of our lives.\u00a0<\/p>\n

I know how easy it is to get distracted by all the noise.<\/p>\n

So here are the three biggest pitfalls I\u2019ll be watching out for to make sure I don\u2019t slow my own progress.<\/p>\n

Mistake #1: Waiting Too Long to Start Investing<\/strong><\/p>\n

The \u201cI\u2019ll Start Later\u201d Trap<\/strong><\/p>\n

I\u2019m 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.<\/p>\n

Some might even find the stock market too intimidating.\u00a0<\/p>\n

However, the longer you push investing down that to-do list, the more years of compounding you lose.<\/p>\n

And time is the one thing you can never get back.\u00a0<\/p>\n

The smart thing to do now is to just start.\u00a0<\/p>\n

Even if you\u2019re just putting away a small amount every month \u2013 say S$100 \u2013 it\u2019s still better than waiting five years to start with a bigger sum.<\/p>\n

Right now, it\u2019s about building the habit and letting time do the work for you.<\/p>\n

Mistake #2: Chasing Fast Money Instead of Building Wealth<\/strong><\/p>\n

Speculation vs Investing<\/strong><\/p>\n

With all the meme stocks, crypto moonshots, and \u201cI made S$1 million in a day\u201d stories on social media, it\u2019s so easy to get caught up in the hype.<\/p>\n

But one thing I know for sure is that chasing fast money relies more on random chance than on sound investment principles.\u00a0<\/p>\n

The adrenaline you get from short-term wins feels great, but it creates unrealistic expectations about investing.<\/p>\n

Why Speculation Can Backfire<\/strong><\/p>\n

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.\u00a0<\/p>\n

Sometimes, a big loss early on can be so demoralising that you want to quit investing entirely.<\/p>\n

My tip?\u00a0<\/p>\n

Think of investing as a plant that you need to take care of before it blossoms.<\/p>\n

Focus on high-quality businesses like Keppel Ltd <\/strong>(SGX: BN4), or Exchange-Traded Funds (ETFs) like the SPDR Straits Times Index ETF <\/strong>(SGX: ES3), which provides instant diversification across Singapore\u2019s 30 largest companies, and let compounding<\/a> work its magic.<\/p>\n

Mistake #3: Ignoring Risk and Diversification<\/strong><\/p>\n

Overconcentration Risk<\/strong><\/p>\n

When you\u2019re starting out, it\u2019s easy to want to go all-in on that one favorite stock or sector you really believe in.<\/p>\n

But over-concentration is what kills your returns silently.\u00a0<\/p>\n

If that particular company or industry hits a rough patch, your entire portfolio goes down with it.<\/p>\n

Why Diversification Matters<\/strong><\/p>\n

You can have a favourite stock.\u00a0<\/p>\n

But you should spread things out across different sectors and geographies to reduce your portfolio\u2019s overall risk.<\/p>\n

Anchor your portfolio with blue-chip<\/a> giants like DBS Group Holdings Ltd <\/strong>(SGX: D05), which offer stability through market cycles.\u00a0<\/p>\n

You can also include real estate investment trusts (REITs)<\/a>, such as CapitaLand Integrated Commercial Trust <\/strong>(SGX: C38U), to generate a consistent stream of passive income<\/a> from high-quality real estate assets.<\/p>\n

Additionally, always remain level-headed and avoid making emotional bets based on trends you see while doomscrolling.\u00a0<\/p>\n

Key Investing Principles Young Investors Should Focus On<\/strong><\/p>\n

Returns from small, regular contributions often beat large, sporadic ones.\u00a0<\/p>\n

So there\u2019s no need to wait for the perfect moment or a large lump sum because having a long-term horizon allows you to ride out downturns and place your focus on the end goal: financial independence.\u00a0<\/p>\n

Reinvesting your dividends<\/a> is also highly recommended as this allows your earnings to generate their own earnings, growing your wealth exponentially.\u00a0<\/p>\n

Long-term wealth doesn\u2019t happen overnight; you\u2019ll need to have patience and stay financially disciplined for your returns to truly show.<\/p>\n

Key Metrics Beginners Should Understand<\/strong><\/p>\n

While there is no need to be a Wall Street pro, there are still a couple of things you need to keep an eye out for:<\/p>\n

    \n
  1. Revenue and Earnings Growth<\/strong>: You want to see the company expanding and making more money over time, rather than just treading water.<\/li>\n
  2. Dividend Yield and Payout Ratio<\/strong>: Beyond just seeking high returns for every dollar you invest, you need to check if the company can actually afford to continue paying you without stretching itself too thin.<\/li>\n
  3. Return on Equity (ROE)<\/strong>: A high ROE shows that management knows what they\u2019re doing and can efficiently turn your investment (shareholders\u2019 equity) into profit.<\/li>\n
  4. Portfolio Allocation<\/strong>: As mentioned earlier, this protects you from being over-exposed to just one industry.<\/li>\n
  5. Long-term Total Returns<\/strong>: This is the \u201cwhole package\u201d \u2013 the combination of stock price growth and dividends collected, and reinvested over time.<\/li>\n<\/ol>\n

    What Young Investors Actually Have as an Advantage<\/strong><\/p>\n

    At this age, we often have fewer fixed financial obligations \u2013 such as mortgages or dependents \u2013 which offers a unique window to maximise our investment rate.\u00a0\u00a0<\/p>\n

    Most importantly, we have a long investment horizon.\u00a0<\/p>\n

    Not only does this let compounding \u201ccook\u201d, but it also gives us the luxury of time to sit through market volatility and recover from any beginner mistakes.<\/p>\n

    Get Smart: Work Smart, Not Hard<\/strong><\/p>\n

    Investing in your 20s is about avoiding the costly mistakes that would reset your progress to zero and not whether you picked the perfect stock.<\/p>\n

    As long as you start now, stay disciplined, and focus on long-term wealth<\/a> creation, you\u2019ll be miles ahead of everyone else financially.\u00a0<\/p>\n

    At the end of the day, the best investment advantage we have is simply time.<\/p>\n

    When the market corrects, most people see a crisis. We see an opportunity to apply a system.<\/p>\n

    While others are paralysed by mixed signals from the energy sector and tech stocks, we\u2019re sticking to a practical framework that filters the noise.<\/p>\n

    Our Co-Founder, Chin Hui Leong is going live to show you exactly how he chooses businesses that thrive amid disruption. If you\u2019re tired of guessing your next move, this is for you.<\/p>\n

    Join the webinar here<\/strong><\/a>.<\/strong><\/p>\n

    This could be the fastest way to jump from a \u201cnewbie\u201d investor to a seasoned pro. Our beginner\u2019s guide shows everything you need to know to buy your first stock and beyond. Click here<\/a> to download it for free today.<\/p>\n

    Follow us on Facebook<\/a>, Instagram<\/a> and Telegram<\/a> for the latest investing news and analyses!<\/p>\n

    Disclosure: Charlyn T. owns shares in DBS and SPDR Straits Times Index ETF.<\/p>\n

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