The 4 Mistakes Every First-Time Investor Makes

Don’t make these rookie mistakes like I did.

Nov 23, 2025

There’s nothing more confusing than trying to make your first few real investments.

Here’s why:

You finally have enough money to put to work.
You know these early decisions shape your confidence.
You also know one bad deal can set you back for years.
And you’re scared you’ll mess it up.

But you have to start somewhere.

Which means those first investments are more than deals. They’re the foundation of your belief that you can be a real investor.

So what exactly should you avoid?

If my 14-year-old son asked me that question, here’s exactly what I’d tell him…

1. When you pretend to understand, you learn nothing

Almost every early investor does the same thing.

They nod along.

They act like they “get it.”

Inside, they are lost. Sometimes even terrified.

I did this too. Even with my Goldman Sachs background. I wanted to look sharp. I wanted to look informed. I did not want anyone to see what I didn’t know.

The problem is simple. When you pretend to understand something, you skip the part where you actually learn it. You make commitments you don’t fully grasp. You stress about things you never needed to stress about.

Sadly, you end up losing money you didn’t have to lose.

Here’s the line I still use today:

“Hey, I’m a simple guy. Would it be okay if I asked you a thousand easy questions?”

It gives me permission to be curious.
It forces the other person to simplify.
It resets the entire conversation.

If you want to make better decisions, ask more questions than you think you should. It’s the only way you actually understand the basics that keep deals safe.

And if you want training wheels, join an investor group.

Groups slow things down. They explain the fundamentals. They share the mental models that solo investors learn the hard way.

I guarantee that you will learn faster when you don’t pretend.

2. Peer pressure ruins more portfolios than bad markets

Try this on for size:

A friend comes to you with a deal.
Someone you respect is excited.
Someone successful wants you in.
Suddenly, “no” feels impossible.

You worry they’ll think you’re uninformed.

Or that you can’t afford it. Or that you aren’t part of the “real” players.

I’ve done this more times than I want to admit. And every time I forced myself in, it never ended well.

So I built a simple script.

I am proud to say that I use it every week.

“Hey Jimmy, I’m going to pass on this one. I’m already committed to another opportunity for this allocation. Thank you for including me. I’d love to consider a future one with you.”

This is: super clear, super respectful, and a final decision.

What most people do instead:

They ghost.
They make fake excuses.
They ask 20 questions even though they aren’t interested.

Meh.

All three of those behaviors guarantee you never get shown a good deal again.

But if you use the semi-magical script above, you will not only be respected for your decisiveness, you will continue getting invited to the more opportunities.

That’s the real flex.

3. A good deal with the wrong operator is a bad deal

New investors fall in love with ideas.

They admire the pitch.
They imagine the upside.

But here is the truth that took me a long time to learn:

Ideas don’t make you money. Operators do.

When I say operator, I mean the person that I going to take your money and go do something with it.

And this operator better be badass.

Because, when things go wrong, and they will, you need someone in the captain’s chair who won’t break. Someone with enough grit, discipline, and integrity to protect your investment when the weather turns.

After losing a painful amount of money on a deal run by someone who kept two sets of books, I finally built a process to avoid that mistake again.

Here’s the script:

“Hey Jimmy, we want to make sure we’re good partners to each other. Let’s do a mutual background check. You’re welcome to run one on us, and we’ll do the same with you.”

You aren’t accusing anyone of being shady here. You’re showing you take the partnership seriously.

If someone resists a mutual check, that tells you everything.

You want operators who stay and dig in when it gets hard. You want someone whose default setting is honesty 100% of the time. You want a good person.
That matters more than the fancy idea.

4. FOMO is the most expensive emotion in investing

Every season has a “hot” play.

Crypto.
Airbnbs.
Multifamily.
Options trading.
AI startups.

Whatever everyone is buzzing about.

The details change every few years. But the emotional pull doesn’t.

Here is the problem:

You forget your goals.
You chase the locker-room story.
You want to feel included.

Let me give you a better way to think about it…

Tie every investment to the next milestone in your journey.

Here is what I mean:

If your goal is 12 months of cash reserves, ask yourself:
“Does this opportunity help me reach that?”
If your goal is your first passive income check, ask:
“Does this opportunity get me closer to that?”

If the answer is no, the decision is easy.

This is why Warren Buffett’s “10 punches on the card” idea changed my entire view of investing. Imagine you could make only ten significant investments in your lifetime. Suddenly half the noise disappears. Tiny bets don’t move your life forward. Meaningful bets do.

Meaning, you don’t get wealthy by investing randomly. You get wealthy by becoming a disciplined investor who only swings at pitches that move your goals forward.