One of your goals for the new year: to start investing so you can save up for those major life moments like, oh, you know, owning a house, starting a family and planning for retirement. Except, where do you actually start? And why does the idea of interpreting a line graph make us want to hurl our laptops out the window? Not to worry. As long as you avoid these six money misconceptions, you’ll be ready to put your money to work ASAP.
6 Mistakes to Avoid as a First-Time Investor
Misconception #1: Investing Is Complicated
One of the biggest mistakes for (would-be) first-time investors is never even getting started. Yes, anything money-related can seem intimidating at first. But investing doesn’t have to be complicated or require a ton of time or research. That's especially true for services that help automate your money, like Fidelity Go®, which make it easier to start investing. As a robo advisor—aka a digital service that does the investing for you—Fidelity Go can help manage your money according to your financial goals and personal situation.
Misconception #2: Fees Are A Huge Part Of Investing
OK, so you got over the hump of misconception #1 and you’re ready to start investing. But, gasp, what are all these fees? Many balk at the fees some services charge for managing your hard-earned money. That’s not true of Fidelity Go, where there’s no minimum balance to open an account and where they'll start investing for you at $10. Plus there are zero advisory fees for accounts under $10K. Even after $10,000 (yay, go you!), there’s a tiered pricing structure of only $3/month for anywhere between $10,000 and $49,900. (That's way less than your weekly chai-and-oat-milk-latte, FYI.)
Misconception #3: I’ll Have To Pay Close Attention To The Stock Market
FANG stocks, options, dividends, SPACs: What the heck does it all mean?! Luckily, you don’t have to be a wolf of Wall Street to be a savvy investor. That’s because managed accounts invest you in a professionally managed combination of securities. Fidelity Go utilizes mutual funds that generally hold domestic stocks, foreign stocks, bonds or short-term investments. By answering a few simple questions to determine your investment strategy, they’ll choose which funds they think will best help you meet your goals. That means you can automate your investment plan just like you automate your Netflix bill, your gym payment, even your dog’s pet-food subscription.
Misconception #4: I Need To Save A Ton Of Money Before I Invest
Not true! You can start investing with just $10, especially with low-cost investment accounts like Fidelity Go. Every dollar counts.
Misconception #5: I Need A Get-rich-quick Scheme
If you picture investing like a Las Vegas slot machine, with your goal outcome being a windfall of cash, you should probably rethink your approach. Disciplined investing through professionally managed accounts, like the ones at Fidelity Go that employ diversified funds, is the exact opposite of Vegas. Time, patience and goal-setting is the name of the game.
Misconception #6: I Haven’t Set Investing Goals
A major mistake for first-time investors is not pinpointing exactly what they want for their short- and long-term goals. Saving up for a house? A car? Finally pay off some accumulated debt? Knowing your goals will help a low-cost robo-advisor determine your propensity for risk, how aggressively you want to invest and in what assets.
Once you've figured out your goals, you're well on your way to being a seasoned investor. So, what are you waiting for? Put that money to work.
This article was developed by PureWow in collaboration with Fidelity Investments.
Investing involves risk including risk of loss.
Fidelity Go® provides discretionary investment management for a fee. Fidelity® Personalized Planning & Advice provides non-discretionary financial planning and discretionary investment management for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC.