Money Management

Investing mistakes can cost you time and money. Learn about some of the typical mistakes that young investors make so you can avoid them. 

Getting started with investing while you’re young is one of the best financial decisions you can make. When you start early, your money has more time to grow. That can make a massive difference in your finances.

To give you an example, let’s say you start investing $500 per month at age 25. If you get an 8% annual return, then after 40 years when you turn 65, you’ll have $1.55 million. If you start at 35 and invest for 30 years, you’ll have $679,699 — a difference of over $850,000.

So, if you’re investing at a young age, you’ve already taken an important first step. But there are also some common and costly mistakes young investors make that can negatively affect how much your money grows.

1. Taking on too much risk

Investing has historically been a successful way to build wealth, but it takes patience. On average, the stock market grows at about 10% per year. Returns vary quite a bit from year to year, but over long periods, that’s how it has averaged out.

While this can grow your money significantly over the long run, you may want faster results. That’s why many young investors take the high-risk, high-reward approach.

Some put most of their money in Bitcoin (BTC) and other cryptocurrencies. Others trade options. When you hear about people who put everything into crypto and made millions, slow and steady may not seem good enough.

Keep in mind that these investments are long shots. You’re a lot more likely to lose money than you are to make money. It’s OK if you want to add a little excitement to your portfolio. But you should have at least 90% to 95% of your money in safer investments, such as an exchange-traded fund (ETF) that invests your money in the entire stock market.

2. Not investing regularly

Many investors start by investing a large amount of money they’ve saved. Maybe you tucked away $3,000, $5,000, or $10,000, and made that your first big investment. That’s a great way to start, but it’s also important to continue investing regularly going forward.

Investing works best as a financial habit, not a one-off. If you invest $5,000 once and earn 8% per year on it, then in 40 years, it will grow to $108,623. If you invest $5,000, plus $250 per month for those 40 years, you’ll end up with $885,792.

When you invest regularly, you end up investing more overall. To make this easy, decide on an amount you can afford and automate your investments. Many of the best stock brokers give you the option to set up automatic investing. It’s also something you can set up with your employer if it offers 401(k) plans.

3. Spending too much time managing your portfolio

You might think that the more time you put into investing, the better you’re going to do. That makes sense in other parts of life, but it’s not always the case here.

It’s hard to beat the market. Even many professionals don’t manage to do it. Warren Buffett famously made a bet at the end of 2007 that the S&P 500 (an index of 500 of the largest publicly traded companies) would outperform professional hedge funds over the next 10 years. None of those professionally managed funds came close to the S&P 500’s performance.

You could do well by analyzing stocks and carefully managing your portfolio. But you could also likely get similar or better returns by just passively investing in a fund that does the work for you. S&P 500 ETFs are a popular choice for this.

This also means you’ll have more time to focus on other areas of your life, like increasing your income. As a young adult, that’s a much better use of your time. Raising your annual income by $5,000 or $10,000 will benefit you much more than spending hours every week to maybe make a little more on your investments.

Don’t feel bad if you’ve done any of these. They’re common, and they’re all mistakes I made myself. The good news is that they’re also easy to avoid. If you minimize risk, make investing a habit, and don’t spend too much time on it, you’ll be better off as an investor.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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There’s no best time of year to switch auto insurance, but changes in your personal circumstances could save you money. Find out when to shop for quotes. 

A lot of Americans are grappling with soaring auto insurance costs. As of November 2023, car insurance costs were up about 19% compared to a year ago.

Sometimes switching insurers can help you save money, but it’s not a sure thing. Keep reading to learn about when the best times are to switch car insurance companies and some other ways to maximize your savings.

When is the best time to switch auto insurance?

Unlike with health insurance, you can change your auto insurance policy at any time, even mid-policy. Some insurers charge a cancellation fee, so make sure to check with your insurance company if you’re contemplating a switch.

In general, there’s no best time of year to shop for car insurance. The best times to switch auto insurance are usually more about changes to your circumstances (more on these in the next section) than the time of year. That said, it’s usually a good idea to compare quotes every six months to a year to make sure you’re getting a competitive rate.

Five times you should shop for car insurance quotes

Here are a few times you should always obtain auto insurance quotes to see if you’re eligible for discounts:

You got married: Insurers generally view married people as less risky drivers compared to singletons, so consider getting a new quote if you tie the knot. You may also score discounts if you combine car insurance.You’ve moved: If you bought a home or signed a new lease, you may be able to save money by bundling auto insurance with your rental or homeowners policy. Even if you’re not on the market for a new policy, you’ll need to tell your insurer that you’ve moved. Insurers consider your ZIP code’s rates of theft, vandalism, and car crashes in setting your rates, as well as the length of your commute. You can stick with the same policy if you’re moving in-state, but if you’re moving out of state, you’ll need a new policy even if you stick with the same carrier.You no longer commute: If you’re no longer commuting — whether it’s because you’ve retired, you now work from home, or some other reason — it pays to shop for new coverage. Driving fewer miles usually means you’re at less risk for an accident, so you may qualify for a discount. One option to explore is pay-per-mile car insurance, which charges you based on how much you actually drive.You’ve celebrated a big birthday: A plethora of factors determine your insurance rates, so don’t assume that your rates will increase or decrease at a given age. Though it’s widely reported that your car insurance drops at age 25, drivers actually see steeper drops between ages 19 and 25. Still, if you’ve maintained a good driving history and you don’t think you’re getting proper credit for your maturity, it’s time to compare auto insurance quotes.There’s been an improvement to your credit reports or driving history: If you were at fault in an accident, many insurers will charge you higher premiums for three to five years. By some estimates, drivers with bad credit can pay up to double what those with exceptional credit pay for car insurance. If significant time has elapsed since you had a moving violation or you’ve made significant improvements to your credit, it’s worth comparing quotes.

Note that some insurers offer a loyalty discount to longtime customers. On the flip side, some insurers use what’s called price optimization, where they may charge more to policyholders if they think they’re unlikely to switch carriers in response to a rate increase — though some states have banned this practice.

What to do if you find a better quote

Found a better quote? Congrats! But there are a few things you need to do before making a switch.

For starters, make sure your new insurance coverage will be comparable to your existing coverage. This isn’t just about your premiums. Also, compare your coverages, including the limits, and your deductibles. Sometimes increasing the deductible can be a good way to save on auto insurance if your emergency fund is healthy. But be cautious about reducing your liability coverage, as doing so can leave you financially vulnerable.

If you’re still satisfied with the new coverage, get proof of your new coverage before you cancel your existing policy. If your car is financed, you’ll need to provide your lender with proof of coverage.

Once your new coverage takes effect and you’ve gotten a letter of cancellation from your previous insurer, drive forth and enjoy the savings ahead.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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If your teaching salary barely covers your expenses, educator discounts could help you stretch your dollars. Find out which retailers offer teacher discounts. 

Teaching is incredibly hard work. Many educators receive a meager salary considering how much they do for students. One way that educators can stretch their paychecks further is by taking advantage of teacher discounts.

Teachers can keep more money in the bank by saving money on everyday expenses. If you’re an educator, thank you for all that you do. Here are some discounts you don’t want to ignore.

1. Apple

U.S. employees of public or private K-12 institutions, faculty and staff of higher education institutions, and homeschool educators qualify for educator discounts when buying select Apple products. This includes iPads, iMacs, and Mac products.

You can score these discounts online through Apple’s Education Store, in an Apple Retail Store, or an Authorized Campus Reseller. Discount amounts vary depending on the Apple product being purchased, but you can expect discounts of around $50 to $150. Don’t miss out on this deal if you want to upgrade your laptop, iPad, or desktop computer soon.

2. J.Crew

J.Crew is another retailer that offers discounts to teachers. This is excellent news if you need to add more work attire to your wardrobe. After verifying eligibility through SheerID, teachers can enjoy a 15% discount in-store and online. This discount can be used up to four times per month.

3. Headspace

Taking good care of your mental health is necessary when working in education. Headspace can help you prioritize self-care. This popular meditation and mindfulness app is free to qualifying educators through the Headspace for Educators program.

This freebie is available to K-12 primary and secondary teachers and supporting staff members in the United States, United Kingdom, Canada, and Australia. The standard subscription rate is $12.99 per month or $69.99 a year, so this is a valuable resource. If you need help relaxing after a hectic week at school, check out this mobile app.

4. Michael’s

Need additional art supplies for your classroom? Michael’s craft store extends a 15% discount to educators who verify their teacher status through the Michael’s Rewards program. This discount is available both in-store and online.

5. HP

You don’t have to be an Apple user to get tech discounts as an educator. Teachers in the United States can join the HP Education Store Program to save up to 40% on eligible products. Select PCs and accessories qualify for this discount, so check out this program.

6. Brooklyn Bedding

As a teacher, you can save money on essentials beyond your classroom needs. Getting a good night’s sleep can make an extra stressful school day much more tolerable. Educators can get 30% off eligible Brooklyn Bedding purchases online and in-store.

They also qualify for free shipping on online orders. Good-quality sheets and a brand-new mattress could help improve your sleep. You’ll need to verify your eligibility using ID.me to take advantage of this discount.

7. Stanley

Drinking enough water while running around the classroom is a must. You can save money on quality portable drinkware to help you stay hydrated all day. Stanley offers a 20% discount to teachers who verify their eligibility through ID.me. Some restrictions may apply.

Reduce your spending with these discounts

Educator discounts like the ones highlighted above can help you reduce your spending. The more you save by using discounts, the more you’ll have left in your checking account. Teaching is often a thankless job, but you’re doing a fantastic job and deserve all the recognition. Don’t miss out on deals like this, because they’re a major win for your personal finances.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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