If you want to get a big case of FOMO (i.e. fear of missing out), all you have to do is sit down and read some financial news. You’ll kick yourself at all the big investments you’ve missed out on over the years. Bitcoin to $100,000! Gamestop making people millionaires! Teslanaires balling out! And now we’ve got NFTs hitting the scene – that’s non-fungible tokens for those of you that aren’t hip to the game.
Unfortunately, I’ve missed out on every big investment ever. Sometimes it’s a new technology that I don’t understand and probably am not smart enough to figure out anyway. Other times, it’s a stock that I didn’t pick when someone smarter than me simply knew that this was the stock to get rich from based on whatever technical analysis they did.
After many years of never getting in on these big investments, I’ve come to one solid conclusion – there are a lot of people out there who have no idea what they’re doing but think they do. But there are also a lot of people out there that are smarter than me and know things I don’t know. Some of them get really rich because of how much smarter they are compared to the rest of us.
Truth be told, I really don’t know that much about investing. I have no idea how to look at a stock and figure out whether it’s good or not. I definitely don’t know how to look at a cryptocurrency and figure out if I should put money into it. And I have no clue what the deal is with NFTs. I’m willing to bet that you’re like me too – just one of the regular people out there missing out on all these big investments because you’re not smart enough to know about all the best things to invest in.
Here’s the thing though. Even though there are a lot of smart people out there making money from investments that we don’t understand, it’s actually totally okay. Sure, it’s great if you can figure out what investment is going to blow up before it happens. But we don’t actually need all of that to be a successful investor.
In the world of investing, it’s okay to not be that smart.
The Power Of FOMO
There’s a common misconception about investing and building wealth that I think seriously hurts people. We go into investing thinking of it as something where we have to pick a winner. We tell ourselves we need to find that one investment that will make us our fortune. And if we can just find that one investment, we’ll be rich and set for life.
This is exactly what I thought investing was all about back when I was in college. I’d seen all the stories of people becoming millionaires because they invested in Microsoft back at the beginning. So to me, successful investing was about finding the next Microsoft or Apple or Amazon or whatever other stock was blowing up. But how was I supposed to find that next big thing?
This is where FOMO comes into play and why some people get suckered into what I think are bad investments for most people. A random YouTuber or some Tik Tok star makes a name for themselves by showing how rich they are and how you can get rich too. Then they pitch you on their course that will show you how to make 1000% returns every year!
Charlie Munger had a great takedown of these types of gurus that do this type of selling. If these people are making so much money from their amazing 300% annual return strategy, then why do they need to sell courses?
I think this quote from Charlie Munger is particularly enlightening:
People seek out the weaknesses of their fellow man and take advantage. And you have to get wise enough so you avoid them all.
It’s that FOMO though. We get bombarded with things that make us think investing is a game where you need to outsmart the competition and hit that big home run. I’m sure there are some smart people out there that win at this game. But I know I’m not one of them – I’m not smart enough for that.
You Don’t Need To Be Smart, You Only Need To Be Average
There are a lot of smart people out there. And maybe they have figured out the secret to making money investing in stocks and weird investments. Maybe they know something about Bitcoin or NFTs or whatever the next Gamestop is that I’m just not smart enough to understand. I can accept that they probably know more about these types of investments than I do.
The beauty of investing, however, is that you don’t actually have to be smart to do it well. You don’t even need to try to do better than most. Instead, you can accept that you don’t know that much and aim for average.
There are a few things to think about here. First, when it comes to investing, aiming for average paradoxically means you’re more likely to end up above average. Countless studies show that simply investing in low-cost index funds that match the market does better than the vast majority of active investors.
The second is thinking about what we actually need to do to build wealth. The truth is, we don’t need 300% returns every year like many people think they do. All we really need is enough. That means enough money invested, enough time to let our money grow, and enough consistency so that we have more money working for us.
So think about what you really need. Maybe it’s $1 million? $2 million? And when do you need to have that money? Whatever it is, most likely, you don’t need to get it by tomorrow (it’d be nice of course, but you don’t need to).
I sound like I’m no fun, and maybe I am just a grump, fun-killer. If you want, go ahead and take a small amount of your money for play money. Maybe you find it fun. You can go buy a little bit of Bitcoin if you want. Investing apps like M1 Finance let you buy fractional shares of stock, so you can do that if you want to get in on some of the latest stock. And at least it gives you something in the game so that you don’t feel left out.
But as an investing strategy, unless you’re really smart and really lucky, you’re probably not going to be one of the elite investors in the world.
You’re Not As Smart As Those Smart People – And That’s Okay
There are people out there reading this that know that Bitcoin and NFTs are going to make them a bunch of money. Other people know that a particular stock is going to be the next Gamestop. These people are going to make a lot of money if they get it right. But just as many people are going to lose money when they get it wrong too.
I’m probably not going to be either of these people. I know that I simply don’t know enough to figure out what the next big stock is or what the next cutting-edge investment vehicle is.
But you know something. That’s totally okay. I don’t need to do all of that crazy investing in order to get to where I’m going. And I don’t have to be smart to save money, invest for the long term, and end up with a lot of money later on.
So you can let those smart people keep doing what it is they’re doing. Maybe some of them are getting lucky. Or maybe some of them know something you don’t know. But that’s okay. You don’t need what it is they know to be a successful investor.
More Recommended Ebike/Scooters
Check out these other ebikes/scooters I've had the chance to do a review for:
- GEN3 Outcross Bike – The GEN3 Outcross is a solid, affordable fat tire ebike that does a good job of doing what I need it to do. It works great for city riding, giving me a smooth ride in all conditions. It’s works really well as a winter ebike since the fat tires give it good traction over snow and ice. Check out my GEN3 Outcross Review.
- Himiway Escape Bike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Bike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($10) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with $100 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Moomoo (5 free stocks) – Moomoo is a free investing app currently offering 5 free stocks (usually worth around $75-$100) if you open an account using a referral link and deposit $2,000. Read my Moomoo referral bonus guide for more information.
- Webull (5 free stocks) – Webull also gives you 5 free stock valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free stocks using Webull.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- Upgrade ($100) – Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Importantly, this bonus says that it’s now scheduled to end on October 31, 2022. As long as you get your account opened before October 31st, you should be eligible. Here’s a post I wrote with more details: Upgrade $100 Referral Bonus – Step By Step Directions.
- SoFi Money ($350) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $300 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Fifth Third Bank ($250) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link.Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- OnJuno ($100) – OnJuno is a fintech/neobank that is currently offering a $100 referral bonus if you open an account using a referral link and complete a direct deposit of $250 or more. The account has no fees or minimum balance requirements. Even better, the bonus posts immediately after you meet the requirements. If you can meet the direct deposit requirements, OnJuno is an easy bank bonus that’s worth snagging. Check out my OnJuno referral bonus guide here.
- Varo ($50) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $50 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
- Fairwinds Credit Union ($100) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Spiral ($50) – Spiral is a fintech bank that's currently offering new customers a $50 signup bonus after opening a free checking account with them. The Spiral referral bonus is especially good because it's a free checking account and doesn't require a direct deposit to earn the bonus. Here is my step-by-step guide on how to earn your Spiral Bank bonus.
- One Finance ($50) – One Finance is a fintech bank that’s currently offering a $50 signup bonus if you open an account using a One Finance referral link and have a direct deposit of $250 or more. This is a completely free bank account with no minimum balance requirement, so if you can meet the requirements, it’s worth doing. Check out my One Finance referral bonus guide here.
- Albert ($150) – If you can manage to do a real direct deposit, Albert is an easy account you can use to earn a referral bonus. Here’s a review about Albert I wrote. And here’s a step-by-step guide on how to earn your Albert referral bonus.
- Netspend ($20 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $20 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $20 to start! Make sure to check out my in-depth guide on how to set up these accounts.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- Upgrade Bank. Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Note that it’s now scheduled to end on October 31, 2022.
- Novo Bank. Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. It’s the business checking account I currently use for this blog.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
How refreshingly honest – fortunately the simple ways are almost always the most optimal.
And humility is always in fashion. Good one Mr. Panther.
Thanks!
I really like today’s post. There’s a constant bombardment of people saying they are making quick fortunes in today’s market. Makes you feel like your slow and steady growth strategy is crap. The ones losing their shirts never post. Slow and steady works for me!
It’s human nature I think – a lot of us just want to get to the end without going through the process first. I think I’ve learned that most anything in life comes from slogging through the beginning.
I lost 5K in General Motors during the 2008 meltdown (which was caused by loose lending policies endorsed by the government), I lost $45,000 in ATPG when the Gulf was shut down by the government in 2012 after the oil rig disaster, and finally I lost $44,000 in MRRL in 2020 when the government shut down everything for the virus and the stock market crashed!! Lessons I learned FINALLY: Single stocks SUCK and the government can be counted on to screw everything up to the maximum extent possible!
100%. I have become convinced that simplicity is the answer to investing. Index funds achieve that goal and are low cost. Sure, could you be leaving some money on the table? Yes…but it doesn’t matter, because Low Cost Index Funds will help you to achieve your goals no matter what they are. Anything fancier and you are just adding to your level of stress and that can lead to poor decision making.
Exactly right. Would it be nice to hit it big with a crypto or some individual stock? Sure would. But I don’t “need” it to build wealth via investing.
As a recently retired higher ed Math teacher, I always told my students that the compound interest formula will change your life. It’s enabled me to retire early, yippee!
Thanks for the good article Kevin.
Thanks Jean!
Compound interest is definitely life-changing. It’s just so slow to start!
Yes indeed. When you’re my age, you really notice the changes!
Totally agree. Most of us have way too much going on in our lives to really get as smart on individual investments as we’d need to be to be crazy successful. I generally figure that by the time anything is making enough news that I’ve heard about it, there’s a pretty good chance that the big money has already been made. Every now and then I do see an article about somebody who is in debt up to their eyeballs because they speculated on this kind of stuff. And of course those articles are always super sympathetic and imply that these people didn’t make their own stupid choices. What there are almost never articles about, except on blogs, are the people who went the boring index fund route and did very well for themselves. If it wasn’t so sad it would be hilarious.
There always people smarter than me in the market. That is why I follow a low and steady strategy.