Classic Suze School: The Biggest Mistakes You Make as an Investor
episode
Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
21 min
2 speakers
8 chapters
transcribed 1 month ago
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Transcript generated automatically by AI and may contain errors.
What is the main investing mistake Suze says people make by focusing on past losses?
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August thirteenth, twenty twenty six. Welcome to the Women in Money Podcast, as well as everyone smart enough to listen. Hi everybody, it's Robert, the producer here. And for today's classic Susie School, we're gonna go back a couple of summers ago and play you the main lesson about the biggest mistakes you may be making when you invest. Enjoy.
So I was thinking to myself. As many of you were sending me emails, and I was realizing that so many of you are making serious mistakes when it comes to investing your
money.
Let me tell you what I think are the biggest mistakes that you make as an investor. Your first one, seriously, is you look at what you had, not at what you have. Write that down. What do I mean by that? So you have a stock that you bought. Maybe you bought a hundred shares, maybe ten shares, maybe a thousand shares. And you bought it at thirty dollars a share. And now that stock Is all of a sudden at $110 a share a year or two later. And you are feeling brilliant, you are feeling happy, and you are absolutely calculating how much money. That stock. It has made you. First of all, a stock doesn't make you money until you've sold it, okay? But now it's going down and down.
Why does Suze consider not dollar‑cost‑averaging the second biggest investing error?
And now it's at $90 a share. And you're thinking to yourself, Oh my God, I've lost money. Now you're upset because it's no longer in the hundred dollar area. Now it's in the ninety dollar area. What you're not thinking about is you still have tripled your money. You bought that stock at thirty. You didn't buy that stock at a hundred something, you bought it at thirty. So you've still have a tremendous gain on your money. You have to look at what you have, not at what you had. You can't look at the gains you had and think of them as losses. You need to think as a stock that is a great stock or ETF that's declining. You can't look at it as a loss. You have to look at it as a gain. a gain from your original entry point into that stock.
Or ETF. Now it's possible that you bought it when it was above a hundred and now it's down to ninety, to eighty. Now you're looking at losses there. But then chances are you made the second mistake. And the second biggest mistake is you don't dollar cost average. You just don't You take all of your investment money that you have and you buy something, and let's say you buy it at a hundred now. All of your money is in that stock. You don't have any more money to put in that stock. And now it's down at 90. eighty. Maybe even seventy. It's a great stock, but it's going down. You don't have the money to now buy it as it's going down. Biggest mistake you will ever make. Dollar cost averaging, because many of you asked me this, is what is dollar cost averaging that Susie has always talked about?
How does Suze explain dollar‑cost‑averaging and why it works over time?
Let me give you an example, all of you, whether you know it or not. You are dollar cost averaging in your employer plans. You know, every single month when you have money taken out of your paycheck and they put it into your four oh one K, four hundred three B or TSP. No matter where the market is, the money's going in. And if the market's down, or if your stocks or mutual funds are down, your dollars buy more shares. If the markets are up, your dollars, because it's always the same amount every month that's taken out, your dollars will buy less shares. But over time, Your dollars that you've been purchasing with, the price has been averaged over time. And so has the amount of shares that you've been purchasing.
So let me give you an example. There's two people. The very first person has $12,000 that they want to invest all at once. They love this stock. They are convinced that it's going up. And therefore they want to buy it now.
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Chapters
8 chapters
1
What is the main investing mistake Suze says people make by focusing on past losses?
0:00–2:33
2
Why does Suze consider not dollar‑cost‑averaging the second biggest investing error?
2:33–4:58
3
How does Suze explain dollar‑cost‑averaging and why it works over time?
4:58–7:34
4
What’s the difference between lump‑sum investing and dollar‑cost‑averaging in Suze’s example?
7:34–9:43
5
Why does fear cause investors to sell low and miss later gains?
9:43–12:22
6
What are Suze’s four “rules of the road” for successful investing?
12:22–15:12
7
How can investors avoid being an all‑or‑nothing investor and stay consistent?
15:12–18:03
8
What final advice does Suze give about putting people before money?
18:03–21:31