Sound Investing The Biggest Mistake Beginner Investors Make - and How to Avoid them
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Oct 22, 2025 In this insightful discussion, Paul Merriman, a veteran investment educator and founder of the Merriman Financial Education Foundation, shares essential insights for novice investors. He reveals that emotions, not lack of knowledge, often lead to common investing mistakes. Paul emphasizes the importance of starting early and avoiding high fees, showcasing how automation and diversification can protect against costly errors. He also encourages using ETFs for simplicity and maintaining discipline amid market fluctuations, making investing accessible for everyone.
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Simplicity Versus Emotional Difficulty
- Investing is simple in principle but emotionally hard, because money triggers strong feelings that derail decisions.
- Paul Merriman argues that long-term success is mainly defensive: avoid big mistakes rather than chase excitement.
Trust Evidence Not Sales Pitches
- Prefer academic, evidence-based advice over Wall Street sales pitches or friendly anecdotes when choosing investments.
- Avoid high-cost, actively sold products because higher fees usually leave investors with less money long-term.
Start Now — Compound Works Fast
- Start investing as soon as possible; early contributions compound disproportionately over decades.
- If you're behind, increase saving immediately because the first years matter far more to final wealth.
