Everyone deserves the chance to grow their money, but too often, old ideas and secondhand advice get in the way.
Maybe you’ve heard things like “Investing is too risky” or “You need a lot of money to get started.” Sure, the people delivering those messages might be well-meaning, but their “advice” may not always be rooted in truth.
Fortunately, most of these investing myths are easy to debunk once you understand the basics. With a little knowledge, you can feel more confident about your financial future and take real steps toward building wealth, even if you’re just starting out.
In this article, we’ll walk through five of the most common investing myths that stop people from making moves to grow their money for the long term. Whether you’re nervous to take those first steps or just not sure how it all works, you’re in the right place.
What Is Investing vs. Saving?
Before busting any investing myths, let’s get clear on what investing actually means and how it’s different from saving.
Think of saving as putting your money in a safe place (like a savings account) so it’s easy to get to when you need it.
Savings accounts are great for putting money aside for short-term goals or unexpected expenses. The risk is low, but so is the reward. Sitting in a savings account, your money earns a small amount of interest, if any.
Investing is about growing your money over time. When you invest, you’re using your dollars to buy things like stocks, bonds, or mutual funds that have the potential to increase in value. It involves more risk, but it also offers a much greater potential for reward.
That makes investing a great way to make faster progress toward long-term goals like retirement, buying a home, or building wealth. And the sooner you start, the more time your money has to grow.
Now, let’s take a look at five common myths that might be holding you back from investing—and the truths that can help you take action and start building wealth.
Myth 1: You Need a Lot of Money To Start Investing
This is one of the most common investing myths, and also one of the most outdated.
Thanks to technology and today’s online investment platforms, you can start investing with just a few dollars.
Many apps now allow you to buy fractional shares, meaning you don’t need to buy a full share of a company like Apple or Amazon to become an investor.
All it takes is between $5 to $25 to get going on most investing apps and platforms. The key is to start small and build the habit. Over time, even modest contributions can add up.
Let’s say you invest $25 a month into a low-cost index fund that earns an average annual return of 8%. In 10 years, you could have over $4,500. In 20 years? More than $14,000. That’s the power of consistency and time.
Kudzu offers tools like Savings Habits that help you set aside small amounts of money regularly, making it easier to invest with little money and stay on track.
Myth 2: Investing Is Just Like Gambling
Some people hear “investing” and picture slot machines or risky bets.
And while both investing and gambling involve risk, they’re not the same.
Investing is a long-term strategy based on ownership. When you invest in a stock or mutual fund, for example, you’re buying a piece of a company or a group of companies. These companies generate profits, may pay out dividends (which are small portions of those profits they share with investors), and grow in value over time.
Conversely, gambling is based on chance, with outcomes driven largely by luck. There’s no underlying value or ownership, and the odds usually aren’t in your favor.
The stock market may go up and down, but its performance reflects the economy and business growth over time.
One of the best ways to manage those ups and downs is through diversification, which is a fancy word for not putting all your investing eggs in one basket.
A diversified portfolio helps reduce your risk by spreading your money across different types of investments, like stocks, bonds, and mutual funds. That way, if one investment dips in value, others can help balance things out.
Over time, a well-diversified portfolio tends to grow more steadily, even when the market experiences short-term fluctuations.
Myth 3: The Stock Market Is Too Risky
It’s true that stocks go up and down. But risk doesn’t always mean danger—it can also mean opportunity.
The market often experiences periods of short-term turbulence (also known as volatility), but it tends to trend upward over time.
Since 1926, the average annual return of the S&P 500 has been about 10% before inflation (the gradual rise in prices that reduces the buying power of your money over time).
That means if you leave your money in the market long enough, you’re likely to see growth.
Let’s say you invest $1,000 and leave it alone for 30 years. With an average 8% return, you could end up with over $10,000.
That said, it’s smart to make sure your investing strategy matches your timeline.
Money you need in the next year or two probably shouldn’t be in stocks. But money for long-term goals like retirement? Investing may help it grow faster than inflation, protecting your purchasing power for the future.
Myth 4: You Have To Pick the “Right” Stocks To Succeed
The idea that you have to choose the perfect mix of stocks to succeed as an investor can scare people off from investing altogether.
You don’t need to be a stock-picking expert to build wealth. In fact, most everyday investors are better off using index funds or ETFs (exchange-traded funds).
Index funds track a specific part of the market, like the S&P 500, and while ETFs work similarly, they are usually traded like individual stocks throughout the day. Both are made up of multiple different investments, so your money is automatically diversified.
They also tend to have low fees, making them a good option for beginners because they make it possible to invest with little money.
Instead of trying to beat the market, your goal can simply be to participate in its overall growth. That approach has worked for millions of long-term investors.
According to historical data, a $10,000 investment in the S&P 500 in 2000 would have grown to over $50,000 by 2023, assuming dividends were reinvested. That’s the power of staying invested for the long term.
If you’re not sure where to begin, apps and platforms that offer robo-advisors or pre-built portfolios are a great place to start. A robo-advisor is a digital service that builds and manages an investment portfolio for you based on your goals and appetite for risk—ideal for novice investors.
Myth 5: I Don’t Know Enough To Start Investing
Feeling unsure is understandable. After all, investing isn’t usually taught in school, and the financial world can be confusing.
Getting started doesn’t have to be complicated. You just need a few basics and a willingness to learn as you go.
If you know how to make and stick to a budget or save money, you already have a solid foundation to get started with investing.
Start small. Keep learning. There are great beginner-friendly resources (like Kudzu!) that can help walk you through each step.
Here are some key steps you can take right away:
- Pick an investing platform with low fees and easy-to-use tools.
- Choose an amount you can afford to invest each month—even $10 is a win.
- Set it up to be automatic so you don’t have to think about it.
As with any skill, investing confidence builds with action. The important thing is to take that first step.
Kudzu supports you with financial education resources and helpful features designed to help you grow your money and knowledge at the same time.
Bonus Tip: Build the Habit, Not Just the Portfolio
One of the best-kept investing secrets? It’s not about picking the “perfect” stock or knowing when the market will rise or fall.
It’s about building the habit.
When you invest a small amount every month, it becomes part of your routine, just like brushing your teeth or making your morning coffee.
You start to think long term. You become less reactive to news headlines. And over time, that habit becomes one of the strongest tools you have for building wealth.
Investing isn’t about being perfect. It’s about being consistent, curious, and committed. Debunking these investing myths is a great place to start.
You don’t need a finance degree, a six-figure income, or hours of free time to research the markets. You just need a little knowledge and a willingness to stick with your investing strategy for the long term.
And remember, before you invest, make sure you have a solid emergency fund in place. Having money set aside for unexpected expenses serves as a safety net, helping you avoid financial setbacks while building wealth for the future.
Kudzu Can Help You Grow Your Financial Future
Kudzu was designed to help real people like you start building healthy financial habits without jargon, stress, or pressure.
If you’re ready to take the next step in your financial journey, Kudzu has tools to support you every step of the way.
Whether you’re just getting started or looking to build on what you already know, Kudzu makes it easier to grow with little money and a lot of confidence.
Get started with Kudzu and begin building your financial future one smart, simple step at a time.
