5. Not Investing

As discussed earlier, an investor have greater ability to seek a higher return by taking higher risk when it comes to a long-term time horizon. Young investors have their longest time horizons, and thus a high tolerance for risk is applicable. Young investors also tend to be less experienced with handing money. As a consequence, they are often tempted to focus on how their money can benefit them at present, without focusing on any profitable long-term goals, like retirement. Spending and wasting money now instead of saving and investing, can create bad habits and contribute to a lack of savings and retirement funds.