The good news is you’ve now learned everything you need to know about investing! The bad news is that even with this knowledge, most people still fail.

To help avoid that, we need to anticipate the common pitfalls:

  • Lack of discipline — When you’re young, and life seems so long, it can be hard to forego current consumption in the interest of rewards that appear so far into the future. We often fail to recognize the slippery slope of saying, “I’ll skip this month’s investment” or “I’ll take out just a bit to pay for that vacation” Five years pass, and you realize that you’ve hardly begun. For more on this, see “What happens when you don’t stay the course” in the blog.

  • Behavioral biases — Over a 20 year period, you are almost guaranteed to experience market bubbles in which speculators are making more money than you. And you’ll experience market crashes in which you’ll question whether you should have ever started investing in the first place. You will hear experts warning of the pending doom of your asset classes, and talking about exotic investments poised to explode in growth. And you will find yourself wanting to take their advice.

Remember that nobody can predict the future, even when it seems obvious. Remember that nobody beats the market in the long run. Remember that it’s far better to stick to an allocation, than to have chosen the perfect one. Remember that those attractive performance charts you saw earlier in this guide include several dramatic market crashes over the decades. And remember that the rewards for your long-term discipline can be life changing.

Above all, remember to stay the course!