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Thinking about investing for the first time? That’s an exciting step towards building wealth and securing your financial future. But just like learning to drive, it can come with a few bumps in the road if you’re not careful.
In this fourth article of our Beginner Investor Blog Series, we’ll explore some of the most common mistakes first-time investors make—and more importantly, how you can avoid them.
Whether you’re just starting out or looking to fine-tune your approach, this guide will help you build a stronger, smarter foundation for your investment journey.
Missed the previous Beginner Investor Blog Series? Read it here:
Not Having a Clear or Long-Term Plan
Many first-time investors dive in without knowing exactly why they’re investing or what their long-term goal is. It’s a bit like going on a road trip without a map or destination. You might be moving, but you’re not sure where you’re heading.
It’s also easy to focus on short-term wins or what’s “hot” right now. But without a bigger-picture plan, you can end up making decisions that don’t really help you reach your goals.
What to do instead:
Before you invest, take a step back and ask yourself, “What am I investing for?” It could be a property, retirement, your child’s education, or just growing your money over time. Once you know your goal and how long you have, it’s easier to choose the right type of investment.
For example, if you want to save for your child’s college education and they’re currently five years old, you’ve got around 13 years to invest. When you know your goal and how much time you have to invest, it opens the door to smarter options, like a Children’s Savings Plan, which is designed for long-term growth and can help your money build steadily over time. A savings account alone might not keep up with inflation, but a plan like this can help your money work harder.
And remember, investing works best over the long term. A good plan keeps you focused when the markets get bumpy and helps your money grow steadily over time.
Starting Without an Emergency Fund
One of the biggest mistakes new investors make is jumping in without a safety net. Before you invest a single euro, it’s important to have a financial cushion in place.
Why? Because life happens. Your car might break down, the washing machine might call it quits, or you could suddenly face a drop in income. If you don’t have an emergency fund, you might be forced to sell your investments at the worst possible time, like during a market downturn, just to cover everyday expenses.
What to do instead:
Aim to build an emergency fund with three to six months’ worth of essential living expenses, things like rent or mortgage payments, groceries, bills, and childcare. This should be kept in a separate savings account that’s easy to access in case of an emergency but not so easy that you’re tempted to dip into it for non-essentials.
Having this safety net gives you peace of mind and protects your investments from being disrupted by unexpected costs. Once that’s sorted, you’ll be in a much stronger position to invest with confidence and stay invested for the long term.
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Ignoring Diversification
Putting all your money into one stock or one type of investment might seem like a good idea, especially if it’s doing well right now. But if that investment takes a hit, your whole pot of money could go down with it.
It’s a bit like putting all your eggs in one basket. If the basket drops, you’re in trouble.
What to do instead:
Spread your money across different types of investments, such as shares, bonds, property funds, and even across different industries or countries. This is called diversifying, and it helps lower your risk and gives you a better chance of steady growth over time.
Want to dive deeper into this? We’ve written a full article explaining how it works.
Read here: Why Diversifying Your Funds Is So Important
Letting Emotions Lead
Markets go up and down. It’s normal. But panicking and selling when things dip or getting greedy during a boom can sabotage your long-term returns.
What to do instead:
Stay calm and stick to your plan. Investing is emotional, but your decisions shouldn’t be. Try to look at the bigger picture and avoid making moves based on fear or hype.
Chasing Quick Wins
A friend tells you about a “hot tip” or the latest trending stock, and suddenly you’re tempted to throw your money at a company you’ve never even heard of. Sound familiar?
Trying to get rich quick or time the market might seem exciting, but it’s a risky game—and more often than not, it ends in losses. The truth is, real investing is slow and steady. It’s not about overnight success.
What to do instead:
Stick to a plan that matches your goals, and build a well-diversified portfolio. Investing isn’t about luck, it’s about patience. It’s not about timing the market; it’s about time in the market. That’s where the real growth happens.
Overlooking Fees and Charges
Even small fees can quietly chip away at your investment returns over time. Many first-time investors don’t realise how much they’re actually paying in annual management fees, transaction costs, or other hidden charges—especially in things like pension funds.
It might not seem like a big deal at first, but over the years, those fees can seriously impact how much you end up with.
What to do instead:
Before you invest, take the time to compare costs. Not all funds charge the same fees, and some are more transparent than others. Knowing what you’re paying means you can make smarter choices and keep more of your money working for you.
If you’re investing in a pension, this is especially important. We break it all down in our article here: Pension Fees and Taxes in Ireland – What Are You Paying?
Avoiding Professional Advice or Tools
Some new investors avoid speaking to professionals because they think it’s only for the wealthy or worry about fees. Others ignore handy tools that could help track, plan, or optimise their investments.
What to do instead:
Getting help doesn’t mean giving up control, it means making informed choices. Financial advisors can help match investments to your goals, explain risk in plain English, and ensure you’re on the right track. And with the right tools, you can monitor performance, set alerts, and adjust with confidence.
Let’s find the right plan for your goals! Start with a personalised quote now.
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Everyone makes mistakes when they’re starting out, but learning from them is what matters. With the right guidance, and mindset, you can build a solid investment foundation and grow your wealth over time.
Need help getting started or reviewing your existing investments? Get a Quote today!
Our next Beginner Investor Blog Series post will dive into Types of Investments. Stay tuned!
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