Investment is a confronting topic for Millennials, for a few reasons.
Firstly, it’s inaccessible – most investments are designed for people with large amounts of money.
Secondly, it seems boring – dull people writing about complex topics we don’t understand.
Thirdly, it is full of traps – the wrong strategy can create serious headaches and FOMO.

Millennials make some common mistakes that are easily fixed.
Let’s look at them now.

Mistake #1: Fear
There’s a big difference between fear and caution.

You should absolutely be cautious with investing – your money is at stake.
You should not however, be intimidated by investing.

This fear tends to stem from the unknown – the field is full of jargon and we interpret that as a reason to run away.

Fear also stems from loss aversion – the pain of losing $3,000 is a much stronger emotion than the joy of winning $3,000.

Combine these two together and it’s no wonder that people feel nervous.

The solution is education.
Once you learn how investing works and what the jargon means, you’ll suddenly see the exciting possibilities for how investments can make your money work harder.

Mistake #2: Delay
Once people begin to learn about how various investments work, the fear goes away but they still end up sitting on the sidelines.

They tell themselves that investing is a good idea, but now is not the right time.
The problem is, this logic can talk you out of a decision at any time.

When the market is high, you’ll want to wait until prices fall.
When the market is low, the investments will seem unattractive, or you’ll try and wait for prices to fall even further.

There will never be a “perfect time” to start investing – so you may as well start now.

Mistake #3: Greed
Good investments look dull on the surface.

In fact, good investments are actually dull.
They grow consistently over many years, without looking flashy or interesting.

What a lot of young investors are seeking is the feeling of a big win, and so they look for an investment with the promise of a fast reward.
That usually means they end up taking a big risk, and put their money into something unsafe.

A 20% return isn’t better than a 12% return if you took a huge risk in the process.
The aim is to win over the long term, not make as much as you can in the next three months.

Mistake #4: Chasing Last Year’s Returns
When we look at lists of various investment funds, our eyes naturally lock on to the ones with the highest recent performance, and we throw our money at that company.

Unfortunately, that’s not how life works.
If something has just shot up in value, it becomes expensive to buy in.
This goes for superstar athletes, Oscar winning actors, suburbs, superannuation funds and shares.

The aim is to buy something that you believe is undervalued, because it then has room to go higher.
If the investment is at its peak, then for you to make money it needs to either climb even higher (which is statistically unlikely).

Yes, it sucks to feel like you missed out on last year’s results, but buying in at a higher price doesn’t help.

Mistake #5: Paying High Fees
Usually the promise of higher returns comes with the cost of higher fees.
That’s not too bad when times are good – you won’t notice them at first.

In the years that aren’t so great, those fees add up quickly, and you end up missing out on a lot of money over the years.
The solution is to invest with a boring company with low fees.

They might not seem as hot, but over the long run they’ll give you a much better result.

Mistake #6: Gambling Instead Of Investing
I believe that The Wolf Of Wall St was possibly one of the worst things to happen to young investors.

That’s because most people who tell me they loved it only seem to recall the first two-thirds of the movie – the part where everyone makes a lot of money and throw wild parties.

The problem is, the movie was about gambling with stocks, rather than investing.
Investing is about buying something that you think will go up in value over a long time, so that you get ongoing benefits.

Gambling is about betting on something that wins or loses in the near future, and you either double your money or lose it very quickly.

This can be fun, in the way that roulette can be fun, or how betting on the Superbowl can be fun, but you wouldn’t call either of those “Investing”.

What To Do Instead
The best thing to do is to start.
Before the fears set in, before you can think of excuses, before your friends can sway you with the stories of how they made 300% in a month betting on cryptocurrecies.

When you feel your mind start to come up with excuses, call it what it is, and invest anyway.
If you want to buy a house and need a deposit, you can put regular savings amounts into a high interest account.
If you don’t want to get into property, have a look at a low cost index fund – I personally use Vanguard.

The strategy that works for me is “Dollar Cost Averaging”, which means you put in a certain amount every time you get paid, irrespective of how much the market has gone up or down.
This turns investing into an easy habit, which has a huge payoff over the years.

To learn more, I highly recommend Starting Out In Shares The ASX Way, and The Barefoot Investor by Scott Pape.

This article is not financial advice, but merely the opinion of the author. You should speak to a licensed professional about your own plans and circumstances.