DIY Investing 101: How to Succeed as a DIY Investor

Some people hire a financial advisor to assist them with investment decisions. This is seemingly advantageous because you are entrusting your funds to a trained and educated professional. You also do not have to spend the time and energy keeping up with your portfolio. However, you are also paying this individual a fee for time and services. This fee directly eats into your profitability, and there are no guarantees that this professional can achieve desired results. In some cases, you may be even be able to produce better results when you manage your own portfolio.

If your goal is to retire by the age of 37, you need to keep as much money as possible in your own hands and avoid paying unnecessary fees. You also need your funds to grow at a reasonable and even excellent pace. You can potentially bolster profits from investment activities with DIY investing, and this could help you to achieve your goal to retire early.

What Is DIY Investing?

DIY investing, or do-it-yourself investing, gives you complete control over your funds at all times. You are in the driver’s seat when making investment decisions, diversifying your portfolio and more. With this type of investing, you eliminate unnecessary fees to third parties. This means that more of your funds will grow over time. In addition, through this type of investing, you have greater control to moderate your risk tolerance with your need to grow your funds.

DIY Investor Types

It is easy to lump all do-it-yourself investors into a single category, but the reality is that there are many types of investors who prefer to manage their own portfolio. These investors are generally classified by the type of investments that they consider. For example, a fund investor mostly invests in mutual funds, and a trader generates a profit by buying and selling stocks. A more modern type of investor is a crypto investor, and this individual makes money either buying and selling cryptocurrencies or by taking a long-term hold position with coins. There are also hybrid investors who may diversify their portfolio across multiple investment types.

When trying to decide which type of investing activity is right for you, focus on the pros and cons of the investments themselves. It is also important to pay attention to your knowledge of the investments. A savvy investment tip is to invest in what you know. You can, however, improve your knowledge of different types of investments so that you can broaden your horizons.

Bonus read: Bitcoin Investment Basics for Early Retirement

Tips to Succeed as a DIY Investor

Do-it-yourself investing can be lucrative, but it also can be risky. After all, there is always a chance that the market could take a downturn or that you simply make a bad investment decision. While you cannot eliminate all potential risks when investing, there are a few steps that you can take to increase your chance of success.

Educate Yourself

Some people approach investing by simply jumping on the bandwagon. They see a mad rush to invest in a certain company or a cryptocurrency, and they fail to analyze the market conditions and assess the risks. They may also not see the implication that a specific investment would have on their overall financial situation. Before making any investment decisions, including selling investments, educate yourself fully. Once you understand the situation, examine how your desired actions will affect your immediate and long-term goals.

Diversify Your Portfolio

For investors who want to retire early, it seemingly makes sense to make somewhat risky investments that could potentially turn a huge profit. However, this can be risky, and a substantial loss from a bad investment could impact your ability to meet your early retirement goals. Diversify your portfolio substantially so that you can reduce risk associated with a bad investment. For example, if you prefer to trade stocks, consider allocating some money to a real estate purchase.

Bonus read: 10 Best Real Estate Investment Companies in 2018

Pay Off Debts

Time is on your side when investing, and investing as much money as possible as soon as possible can help you to more easily achieve your goal to retire by the age of 37. If you have debt with a high interest rate, it may be financially beneficial to pay off debt first. Then, you can have even more funds available to invest on a regular basis. On the other hand, if your debts have a low interest rate than the rate of return on your investments, it may be more worthwhile to channel more funds to your investments.

Bonus read: 10 Best Debt Settlement Companies in 2018

Seek Tips From Trusted Sources

Investors who make smart decisions ahead of the pack may generate a higher rate of return than those who jump on the bandwagon. Finding the right investments to focus your attention on can be challenging. A smart idea is to connect with other investors who you know and trust. This could be a close friend or neighbor, a coworker or boss, a contact in your investment group or someone else.

Bonus read: Why the Dividend Aristocrats Make Excellent Long-Term Investments?

DIY Investing Risks to Avoid

Following investment tips can help you to get on a great path that ultimately yields a fabulous return on your investment. However, in addition to following helpful tips, you need to understand potential risks and pitfalls that should be avoided. These are among the most significant investment risks that a DIY investor may face.

Not Knowing When to Buy, Hold or Sell

Investing can be an emotional experience. You work hard for your money, and it can be stressful and even devastating to see your money shrinking before your eyes when a market tanks. It can also be frustrating to sell an investment too soon and to miss out on a truly lucrative return. Setting rules and goals for your investments is a great preliminary step to take. Be disciplined to follow your rules, and always seek new information before acting hastily.

Failing to Think About Other Plans Needed for the Future

Some DIY investors spend so much time focusing on their investments that they fail to think about other plans that are required to help them retire early. For example, you need to think ahead about life and health insurance, where you plan to retire to, how you will pay off outstanding debts before retirement and more. Essentially, you need to have a well-rounded approach to prepare for early retirement.

Not Thinking About Tax Implications

All investment decisions have tax implications. However, the thought of paying taxes on your investments may not cross your mind, or you may simply bury the thought because of how unpleasant it can be to think about taxes. Remember that things like how long you hold stocks and if you use a 1031 exchange can affect tax implications. Educating yourself about taxes is just as important as educating yourself about investments.


DIY investing can be beneficial for those who wish to retire early, but it does have its challenges and pitfalls. When you understand important tips to increase your level of success and when you know about the risks to avoid, you may enjoy improved results. If you have any advice or feedback about DIY investing, please leave your comments below.

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