While the following content is intended to be educational, it does contain promotional material for Kaldi.

Most of us weren't taught much, if anything, about investing at school. We picked up the odd bits and pieces from parents and friends. Oh, and not to mention the increasingly frantic Google searches at 2am or that one YouTube guru you think you should trust but there’s just something a little off about them. It all means that many of us have made, or will make, some classic blunders along the way when it comes to investing.

That doesn’t mean you should skip it altogether. Quite the opposite, in fact. Getting started is the most important part, and to make sure you get off on the right foot, we’ve put together a list of mistakes that trip people up most often and what to do instead. No gurus allowed.

Before we get into it, remember that your capital is at risk when you invest, and the value of your investment can go down as well as up. None of this is meant to put you off – it keeps things honest. It’s simply the reality of investing and something everyone should know. Investing is about balance and awareness. Not risk-free promises.

Waiting until you "know enough"

There's always one more article to read or one more podcast episode that promises to explain everything. But waiting for perfect knowledge is procrastination in a clever disguise. Nobody feels ready to start investing, but that’s okay. 

You don't need a finance degree. You need to start. Even putting £20 a month into a simple index fund teaches you something. You'll learn how markets really behave and how your own emotions respond to seeing numbers go up and down. You’ll learn the questions you need answered (as opposed to the theoretical ones you think you need answered).

Start small, and learn by doing. Education comes faster when you've got skin in the game.

Trying to time the market

Everyone thinks they'll invest when the moment feels right, like when the economy seems stronger or the headlines less alarming. This is a trap.

Markets don't send you a personal invitation when they're about to rise. By the time things look "safe," you've usually missed a chunk of the growth. And if you wait for certainty, you'll wait forever. There's always something to worry about.

That’s not to say you should be gun-ho about it all. But, regular investing – where you put money in month after month regardless of headlines – reduces this problem. Some months you'll buy when prices are high, some when they're low. Over years, it tends to average out in your favour without requiring you to predict the future.

Selling when it all gets a little too scary

This is where people tend to lose money. Markets drop and every instinct screams at you to sell before it gets worse. So you sell, locking in your losses, and then watch from the sidelines as markets eventually recover without you.

Volatility isn't the same as loss however. Just ask experienced investors. Your investments only lose value permanently if you sell them at a low point. If you leave them alone, they have time to recover. Every major market crash in history has eventually been followed by recovery, but only patient investors benefited.

This is why you shouldn't invest money you need within the next five years. Short-term money belongs in savings. Investments need time to ride out the inevitable rough patches.

Putting everything into one thing

Maybe you work in tech, so you invest heavily in tech stocks. Or you love a particular company, so you buy only their shares. It feels logical until that sector tanks or the company runs into problems.

Concentration might create dramatic gains if you choose right, but it also leads to big-time losses if you make the wrong decision. Most of us aren't good enough at predicting the future to make such a gamble worthwhile.

Index funds help because they spread your money across hundreds or thousands of companies automatically. It might seem a little boring, but boring tends to work better than exciting when it comes to long-term wealth building.

Ignoring what you're paying

Investment fees work like a slow puncture on your returns. A fund charging 1.5% annually doesn't sound expensive until you realise that over 30 years, it could cost you nearly a third of your total returns after inflation is taken into account.

Low-cost index funds typically charge between 0.1% and 0.3%. Actively managed funds might charge 1% or more. That difference compounds over time. Always check what you're paying so you're not handing over a chunk of your returns for no good reason.

Chasing whatever did well last year

Last year's best performer rarely repeats itself the following year. Yet new investors constantly pile into whatever topped the charts recently, usually right before it disappoints. This is investing by looking in the rear-view mirror.

What matters isn't what worked for someone else last year so much as it’s what suits your goals and your timeline. You want to sleep at night when markets have a little wobble. Stick to a sensible, diversified approach rather than chasing trends.

How Kaldi helps

Okay, so you’re probably asking, “what do you mean by ‘buy and sell’”? Or “how do I even invest in stocks in the first place?”. And index funds … what are those? It’s true that investing can seem daunting to begin with, which only increases the chance of making mistakes. But it doesn’t have to be that way. 

Kaldi keeps it simple. Most investing apps ask you to set aside money each month and trust yourself to stick with it. Kaldi, on the other hand, takes those little moments and turns them into easy investing that doesn’t require a spreadsheet and moodboard. For instance, you probably shop at Tesco, Boots, or Starbucks every month. We offer cashback from those places (and over 160 more different shops and websites) and reinvest the cashback into investments automatically.

There’s no choosing to buy or sell or what stock to go for. You don’t even need to make a transfer. Buy your weekly shop, earn cashback and watch it go straight into a low-cost index fund if that's what you think is best.

The investing part happens in the background while you're living your life. Which means you're consistently putting money in without thinking about whether the market looks scary today, and you're getting diversification without needing to feel like you're a top investor. We even offer you to set up a monthly sweep to put a little extra of your own money into the automatic investment, helping you manage how much you want to invest each month.

It's just easier to avoid the classic mistakes when the whole thing runs on autopilot. That’s the thing about Kaldi, it doesn’t make you a finance guru, but it removes the need to be one.

Don’t make it harder than it needs to be

Successful investing isn't complicated strategies or constant trading, and real life is moving shares here, there and everywhere. At least, it’s not for someone who just wants to save their money and have the potential for it to grow. 

Regular contributions to a diversified, low-cost fund held for years often beats most other approaches. And when you can put that on auto pilot, you’re well on your way to investing with confidence. 

Start simple. Stay consistent. Give it time. That's really all there is to it.

It's important to remember that while Kaldi provides a low cost way to invest, we don't offer personal financial advice. When you invest your capital is at risk and the value of your investments can go up or down, and you may get back less than you put in. If you're unsure about investing or your personal financial situation, it's best to seek advice from a qualified financial advisor.

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