This is the #1 most common and #1 most devastating mistake that new investors make. It’s my nightmare fuel. Every time I look inside one of my friend’s Roth IRAs and see cash sitting there doing nothing, I die a lot inside. DON’T LET THIS BE YOU. Let’s break it down.

When you put money into an investment account, that does precisely jack squat. It’s like moving money from your left pocket to your right pocket. One pocket is called checking account, the other is called Roth IRA. If it’s just cash sitting in that pocket, all it does it sits there and maybe gets sweaty depending on how much you’re running around in these pants.

After you move money into an investment account YOU STILL NEED TO DO ANOTHER THING. You need to INVEST that money. This usually takes the form of clicking the “Trade” button, then clicking “Buy” picking an investment (like an index fund), then clicking “Place Order”. IF YOU DON’T DO THAT, then your cash is not actually invested, it’s just sitting there.

Are you making this mistake?! Log into your investment accounts, click on “Positions” or “Portfolio” or “Investments” to see how your money is invested. If you see any significant amount of money in something called Cash, Core, Sweep, Money Market, or other cash sounding words, that money is NOT invested!

Please help me sleep at night by checking your investment accounts. This has been a public service announcement.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy