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3 Smart Investing Habits to Start in 2022

Smart Investing

Some studies estimate that lack of financial literacy costs Americans more than $400 billion per year. And with only 24% of millennials having an adequate understanding of financial management, that trend is set to continue in the future.

However, at the same time, the possibilities for taking advantage of investment opportunities are better than ever before. There’s a range of investing platforms, as well as a diverse list of opportunities, that can help anyone from any background set themselves up for life.

But any type of investing success must start with developing the proper habits. These essential habits are the very foundation of sound investing practices and can help ensure you stay the course and understand your best long-term interests at all times.

To help you set yourself up for financial success in 2022 and beyond, let’s look at some of the most effective investing habits you should consider.

Regularly Reevaluate Your Goals

There are many technical aspects that go into investing. When choosing where to put your money for maximum results, you will have to consider various factors, such as valuation vulnerabilities, potential returns, and diversification of your portfolio.

However, while there are objectively right or wrong decisions in some situations, many other choices will depend on what you are trying to accomplish. In other words, what might be a wrong decision in one instance might be the right choice in another.

That’s because a lot of the choices you make when investing should come down to what you are trying to achieve. Depending on your short-term and long-term goals, you may have to go with entirely different approaches to get where you want to be.

For instance, there’s virtually no need for a short-term return on the investment for a young person who has a stable job and a good earnings potential in the foreseeable future. But, at the same time, there’s still a lot of time until retirement, which means there’s room for more risk in your strategy.

By taking on a more diverse range of investments, some of which might be higher risk, you can expect higher returns as well. And over a long period, those returns can significantly outperform a more conservative investment strategy.

However, for someone who is already nearing their retirement age, a completely different approach is necessary. While older people typically have more money to invest, the risk they can tolerate is much lower since they won’t have time to recover from significant losses.

As a result, they will usually need to stick to safer investments, which means fewer returns but fewer risks as well, which will protect the savings from taking too much damage in case of unforeseen events.

Take a Big Picture Approach


Investing your hard-earned money can be stressful. Even if you have a good strategy and are making sound decisions, historical volatility data clearly shows that fluctuations and changes in the value of your assets are an unavoidable reality that you will need to get comfortable with.

Consequently, if you want to maintain your sanity and morale as you maintain regular financial habits, it’s crucial to develop the habit of maintaining a big-picture perspective on what your investment strategy is going to result in.

Even if the value of your assets takes a hit during a crisis or because of a market event, you need to understand that the majority of your investments will eventually recover, usually well before you will need to start using them for your retirement.

The way that the markets work means that there will always be fluctuations. Sometimes they will mean incredible gains on your returns, while other times, the value of your assets will take a hit. However, over the long term, the vast majority of sound investment strategies will result in more or less predictable outcomes. 

Invest Every Month

Perhaps the biggest difference-maker in becoming a successful investor is making regular contributions to your investments. You need to be very strict about setting aside a specific amount each month if you want to maintain the momentum of your growth and ensure that you don’t fall off course with your goals.

The most impactful reason it’s so crucial to invest every month is that you can achieve massive results with seemingly minor sacrifices. For instance, even if you set aside just $100 from your paycheck each month, that can have life-changing consequences down the line.

Even with conservative returns below historical averages, investing $100 per month would leave you with more than $180,000 in 30 years in your retirement fund. And that’s just the tip of the iceberg in terms of what you could accomplish if you really set your mind to investing part of your income every month.

Bottom Line

Investing can be hard. There are always things you could be spending your money on right now, so setting it aside and not touching it for many years requires discipline, commitment, and sacrifice.

But the rewards of being diligent in your investment strategy are astounding and can set you up for a comfortable life in retirement. And the habits above should serve as a good starting point for not just investing every month but also ensuring that you are maximizing your returns potential over the long term.

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