There’s a paradox in the investing world.

And it’s one of the primary reasons that so many people fail to generate consistent returns.

Quick Big Announcement

Setting up a 401k and learning how to invest effectively can be incredibly difficult for a young person just starting in the workforce.

How to set one up without wasting months or years on unnecessarily complicated topics that scare you away more than help.

That’s why, alongside the fantastic creators over at The Investing for Beginners Podcast and The Lion Within Us, I created the FREE 401k Kickstart Checklist & Guide to get started on the right foot.

It also makes a great resource to give to younger relatives just getting access to a 401k and investing.

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I often wonder why so many people fail to succeed in the market or why they get scared off when it is so simple to succeed in.

It is because of the conflicting (but accurate) advice that floods the market.

The first part of the quote, “Hurry up”, references how vital time is for investing.

Investments rely on compounding to generate significant, long-term returns.

As I’ve discussed, even starting in the stock market one year earlier can earn you $10,000s.

The second part, “and wait”, relates to the long-term timeframe you should always have when investing, especially in the stock market.

Once you’ve hurried up to get into your investments as quickly as possible, it’s time to be patient.

Short-term movements are meaningless on a timescale of 10, 20, or 30+ years, so there is no reason to make rash decisions based on these short-term fluctuations.

Plus, making short-term stock investments can raise your taxes due to short-term capital gains taxes, and lower your long-term performance since dollar-cost averaging (buying small pieces of the same stock over and over) performs better in the long run.

How Does This Cause Investors to Fail?

In my experience, most new investors fail because they lean too heavily into one side or the paradox.

Most of the time, new investors are in such a hurry to make moves and generate returns that they get caught up in FOMO (fear of missing out) when a stock runs up and panic sell when it drops.

This inevitably results in failing to predict the market (which not even professionals can do) and a lot of negative returns.

Other times, new investors are so focused on waiting that they don’t monitor and maintain their investments as often as they should.

This can lead to riding a stock all the way to zero if they invest in individual stocks or failing to rebalance ETFs as the market shifts over the years.

What You Can Learn from This

The biggest thing to take away is to keep a healthy balance of hurry up and wait is key to seeing the most investing success.

This applies to investing from the stock market to real estate.

Have a short-term mindset when you decide to start investing, realizing that short-term waiting can have a massive effect on your long-term results. Compounding needs time; the more time you give it, the better.

Have a long-term mindset once you start investing. Prioritize keeping taxes low by holding onto investments for a long time and not reacting to short-term, temporary fluctuations.

With that, I wish you the best of luck.

Hurry up and wait,

-Evan

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