My Biggest Investing Mistake? Not Starting Earlier

Anyone notice this trend in the finance sphere? The one that makes you feel bad when you compare yourself to more successful people, no matter how well you’re doing with anything money-related? I see a lot of insecurity and shame from the more honest crowds and I am not about it. No matter how insanely incredible someone’s investing success story has been, they are guaranteed to have some kind of financial regret. For me, that was through my biggest investing mistake: waiting until I was almost 23 years old to start investing.

My noting that is NOT to make folks feel worse about their own investing timelines. It’s to show that you can be 100% financially literate in your early 20s and STILL regret not doing this when you were even younger. Granted, this isn’t the worst investing mistake by far; you could’ve invested all of your wealth into one stock at its peak price, say, without having an exit plan. Or, what might turn out worst of all: you never start investing in the first place.

I’m in the minority of 20-somethings who hold some kind of stock/index fund at all. Pew Research Center has to group the 18-35-year-olds together to get a relevant amount of investors in our age group: 2 out of every 5.

A totally understandable statistic thanks to stagnating wages, racial wealth gaps, and all-around financial inequality. I fully comprehend the fortune and luck I’ve come into. Yet even so, I still have money regrets of my own I have to work through.

What I Missed Out On

Here’s another way to put this: as long as you’re investing in index funds for the long haul, you’re only hurting yourself the longer you put that off. I tried to do the math to make it seem like this wasn’t actually my Biggest Investing Mistake Ever™. And once I looked at the results… hoo boy, was I upset I didn’t know about financial literacy before.

I graduated high school in 2012, when the most pressing doomsday scenario was a Mayan calendar instead of plague and dystopia. My life savings at that time was around $2,000 thanks to being afraid of spending throughout my childhood. If I had invested in an index fund that same year I would have seen a 78% total return in 2017 – the year I actually began investing. That is roughly equivalent to getting $780 back for every $1,000 at the outset. These returns won’t be true for EVERY 4 year run; it just worked out in this case. I don’t even want to calculate how much that would’ve meant now, but rest assured it’d be a lot.

Even if I had started investing one year earlier in 2016, I would’ve had an extra $95 for every $1,000. Amount-wise, that would’ve been a significant amount for me during my 2016 Year of Fear. A hundred bucks I somehow earned passively? A hundred pieces of evidence I truly didn’t, in fact, have to deal with a no-choice-in-the-matter, bad-home-situation again?

SIGN ME THE HELL UP.

Gio, my brother, is now seeing that for the first time. In the last few months he invested $2,000 in his Roth IRA, all (so far!) in index funds. As of last week his account is now worth $2,059. He’s already good with money thanks to yours truly and plans to major in finance once he enters college. But seeing this now has left him absolutely amazed. We talked about how this is how the rich keep getting richer, and especially what that $59 means to him. He currently works a part-time job in a half-abandoned mall making $10 an hour; thanks to investing he “bought” almost six hours of his time back. Gio couldn’t get over how it was a “set it and forget it” dealio.

I just sat on my ASS and got more money!

-Gio, a newly-enthusiastic supporter of index funds

It’s fascinating to see him investing with $2,000 compared to my $200,000, as that means his $59 return is $5,900 for me. (At least, it would if all of that $200k was in index funds, but we’re getting there…) It also stings a little, wondering where I might be now if I also had an Older-Sister-Darcy to give me money lessons. Maybe then my biggest investing mistake would’ve been not investing in Bitcoin sooner. Which is not a regret per se, but I do remember seeing it worth $2k and not buying in.

Comparatively, I am not doing as well as those who are older than me and have already amassed huge piles of wealth. I am also not doing as well as other bloggers my age who figured out something much more lucrative than marketing management.

But at the end of the day?

So What. You Gotta Start Somewhere.

Now in the grand scheme of things, my biggest investing mistake isn’t that big of a mistake at all. It’s a small one at best, and only because I still ended up investing early in my post-college life. That’s a high hurdle to clear for my fellow graduates, especially with several thousands in debt that needs paying off.

Everyone is doing what they think is best, which often means operating on limited information. Face it, how many of us actually receive some kind of financial education? It took me several months of reading up on this stuff full-time to comprehend how it can work for me. Imagine the amount of folks who must have gotten too frustrated over the workload to complete it. Too stressed out, maybe, with everything else life was throwing their way.

Or the folks who never stumbled across this at all, living their lives with a niggling feeling of weariness but unable to pinpoint why. Way too many people already don’t pursue their goals and dreams under the mistaken belief REAL adults don’t have such flights of fancy. Real, bona-fide grownups learn How to Deal Effectively with lives that don’t ultimately bring them joy… right?

It’s so incredibly easy to compare myself to the millionaires, retirees, and superstars of the finance world. We’re part of a world that constantly compares people based on your shoes, your cars, your vacations and your relationships. Money is just another obvious metric you try to measure yourself on. Despite you being better off than most of the world population, not the other way around.

Really, my biggest investing mistake is “not investing earlier”. Yet I still managed to become richer than 96% of my age group.

It’s all about perspective, in the end.

Perspective is what keeps you level-headed and ready to acknowledge what was your “mistake” would have been someone else’s “blessing”.

Cover image credit: Nandhu Kumar via Unsplash