Five Common Investing Myths Debunked

In a world where inflation is now above 6%, the best way to protect your money, while simultaneously building wealth, is to invest. However, with so much information out there, it’s hard to tell what’s true, what’s a myth, and what is in between. So, let’s dive into five of the most common investing myths circulating out there.

You Should Pay Off All Debt Before Investing

This is a tough one because there are so many variables to consider, including:

  • Debt interest rate

  • Return on investment

  • Size of debt

  • Type of debt

Let me give you an example. Sam has $10,000 in student loans at an interest rate of 3.70%. Sam also works for an employer who offers a dollar-for-dollar 401k contribution match on up to 4% of his paycheck. Now, what would be the best choice for Sam: forgo the 4% match to pay off all debt right away? Probably not. That 401k match is, essentially, an immediate, 100% return on his investment, versus a 3.70% interest rate on the loan he’d be paying down. The best course of action, numerically, would be to contribute and receive the match, then attack the debt.    

However, the common theme I want to get across is that what is best for one person may not be the best course of action for another. But the statement many make, that you should always pay down debt before investing, is questionable because you could be taking on an enormous opportunity cost by doing so. Evaluate your situation, run the numbers, and find what works for you!

You Need Lots of Money To Start

Now, this must be the most common myth circulating. “I only have $50. It’s pointless to invest. It’s not enough.” In this day and age, investing has never been more accessible. With fractional share purchasing, you can now own shares of companies — that originally would’ve cost you $1,000 — for as little as $5.    

“But $50 is nothing. It wouldn’t make a dent. What’s the point?” Do you want to see the math? Let’s do the math in another example. Josh is 23 years old and has $50 extra per month to invest. He’s hesitant because how much of a difference could an extra $50 per month really make in his retirement planning? He runs the numbers:

  • $50 contributed per month

  • A conservative average rate of return of 7%, annually

  • He thinks he’ll do this, consistently, for 40 years

What’s Josh left with at age 63 by investing “just” $50 per month? A total of $123,577.10. Do you want to know what’s really shocking? He only contributed $24,000 of that. The other $99,577.10 is what compound interest did for him.    

Moral of the story? Even “as little” as $50 a month can turn into over $100,000 in the long run. Some might say, “100k isn’t enough to retire on.” You’re probably right! But it’s more than $0, and you can always increase those contributions in the future to increase the ending balance.

“I Can Guarantee You 100% Returns, Risk-Free”

Stop. Save yourself. If anyone promises you this: run. Let’s break this into parts:

“I Can Guarantee You 100% Returns.”  — If there’s one thing to understand when investing, it’s that nothing is guaranteed. Markets have upsides and downturns. And if someone says they can predict either, they’d be the richest person in the world. Always be hesitant when someone is promising you large returns.

“Risk-Free.” — This is the icing on the cake. Technically, there is no such thing as “risk-free” investing. Even keeping your money in straight cash is technically risky due to inflation decreasing its value. Someone claiming “risk-free” investments probably has something questionable going on.

The combination of these two ideas makes this statement very hard to believe. Now, not everyone is out there to scam or stretch the truth. But one of the most important lessons to learn is to be hesitant and always question when learning about the investing world, especially when someone is trying to manage your money or sell you on a product or service.

It’s Only for Men in Suits

It’s no longer 2008 where only middle-aged men in expensive suits invest. Fidelity Investments studied over 5.2 million accounts and found that female investors outperformed their male counterparts by 0.4% from 2011 to 2020. What a stat!    

As I said before, investing has never been more accessible. With a couple of pushes of a button, and even with as little as $5, you can now invest in billion-dollar companies. Long gone are the days when only Wall Street guys invest.

You Need to Time the Market Perfectly

Now, I touched on this previously, but so many people out there are under the impression they should wait until the market drops before they invest because it’s “too high right now.”

I said it above, I’ll say it again, and I’ll say it a thousand times more: if one could time the market perfectly, they would be the richest person on the planet. Don’t wait for the “right time” to invest; just invest and wait. Studies have found that those who wait to enter the market miss out on returns versus those who enter and hold long term.

The takeaway? Buy and hold for the long term, rather than listening to speculation and waiting to enter the market at the top or bottom. Bottom line: Just. Start.

Read more articles like this here.


Dore, K. (2021, October 11). Women investors are still outperforming men, study finds. CNBC. Retrieved December 16, 2021, from

Stevens, P. (2021, March 24). This chart shows why investors should never try to time the stock market. CNBC. Retrieved December 16, 2021, from

Domain Money, Inc. is providing this information for informational purposes only. While Domain Money believes that the information contained herein is reliable and derived from reliable sources, it makes no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information. Domain Money expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed. The information contained herein is not, and shall not constitute an offer to sell, a solicitation of an offer to buy or an offer to purchase any securities or cryptocurrency, nor should it be deemed to be an offer, or a solicitation of an offer, to purchase or sell any investment product or service.  Investing comes with inherent risks and you should always invest within your means and risk tolerance.  Past performance is not an indication of future returns and you should always consult a financial advisor prior to making investment decisions. Please see important disclosures at

Sam Hildreth

Corporate Financial Analyst

Sam Hildreth is a corporate financial analyst with degrees in accounting and finance. Sam Hildreth has talked in-depth about budgeting, investing, credit cards, and more on his social channels.