4 Big Investing Mistakes People Keep Making, According to Erin Lowry

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Half of U.S. adults scored low in financial literacy for eight straight years, with confusion costing Americans an estimated $243 billion in 2024 (about $1,015 per person), as reported by The Associated Press. That knowledge gap isn’t just academic; it’s costing people real money and opportunity. 

Erin Lowry, author of “Broke Millennial,” has spent years helping everyday investors cut through the noise. Through her writing and interviews, including a recent conversation on “The Entrepreneur’s Studio” podcast, she’s identified some of the most common and costly investing mistakes people make without even realizing it.

Here are the biggest investing missteps Lowry wants you to stop making.

Thinking You Need To Be Good at Math

One of the most common myths around money is that you need to be good at math to manage your investments well. Lowry said this belief discourages many people from ever learning the basics of investing.

In reality, investing doesn’t require complex equations. It’s more about understanding core ideas like risk, time horizons and compounding than solving for X. According to The Motley Fool, those who don’t want to do a lot of math can still be stock market investors and could choose a more passive investment approach.

Letting Jargon Scare You Off

But it’s not just math that intimidates people; it’s the language. Terms like “asset allocation,” “index funds” and “diversification” can sound like they belong in a finance textbook. For many, that’s reason enough to check out.

Lowry said she believes the industry doesn’t always do a great job of welcoming newcomers. “There is a lot of weird words and jargon that get used in investing that get thrown around,” she said. “Partially to intimidate dumb money, aka retail investors like you and me.”

But behind those words are surprisingly simple ideas. Take “diversification,” for example. It just means spreading your investments around so you’re not putting all your eggs in one basket.

Not Realizing You’re Already an Investor

Many people are already investing without realizing it. If you have a 401(k) or IRA, you’re not just saving; you’re investing. But because we call it “saving for retirement,” many people fail to think of themselves as investors. That can lead to passivity and missed opportunities.

Lowry encouraged people to embrace the term “investing for retirement.”

Leaving Your Retirement Money in Cash by Mistake

One of the most damaging and overlooked investing mistakes, according to Lowry, is setting up a retirement account but forgetting to actually invest the money.

Lowry explained that people can sometimes set up a retirement account but don’t know they need to pick investments. She said this can go unnoticed for years, quietly stalling your ability to grow wealth. If your 401(k) or IRA isn’t earning much and hasn’t changed in value for a while, it’s worth double-checking where that money is going.

According to SmartAsset, holding too much cash in retirement accounts can reduce your returns and purchasing power, though small cash holdings can provide stability.

“If it says something like cash settlement account, cash fund, money market fund, that’s cash,” she said. “If it hasn’t changed much in the last three years, that’s cash. Call your brokerage. Make sure it’s invested. That’s my PSA.”

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