Investing can be both exciting and intimidating, especially if you’re just starting out. The world of stocks, bonds, and portfolios might seem overwhelming, but there’s good news. Many successful investors have shared timeless strategies and insights that can help anyone, regardless of their experience level, build wealth over time. Their wisdom offers a roadmap for navigating risks, seizing opportunities, and staying patient.

What sets great investors apart isn’t luck or access to exclusive information; it’s their mindset and approach to decision-making. They prioritize understanding, discipline, and long-term thinking over chasing quick gains. This article will walk you through eight key insights from these seasoned investors and show you how to apply them to your own financial journey. These principles are simple, proven, and incredibly effective in helping you grow your wealth while avoiding common pitfalls.

Whether you’re saving for your future, funding a big-life goal, or simply curious about investing, these insights are for you.

1. Start Investing Early

One of the most repeated lessons from successful investors is the importance of starting early. Warren Buffett, one of the most famous investors, began his investing career at just 11 years old. The reason starting early matters so much boils down to a concept called compound interest, which allows your money to grow exponentially over time.

Here’s a simple example. If you invest $5,000 per year starting at age 25, earning an average annual return of 7%, you’ll have around $1 million by age 65. But if you wait until age 35 to start, investing the same amount, you’ll end up with less than half that amount. Time is your most valuable asset when it comes to investing.

Even if you can only invest a small amount, get started. Open a retirement account like a 401(k) or IRA and take advantage of any employer match programs.

2. Focus on the Long Term

The stock market goes up and down in the short term, but history shows that it trends upward over the long term. Successful investors like Peter Lynch remind us not to panic during market dips or sell off investments during downturns. Instead, staying invested and focusing on long-term goals is key.

For example, between 2008 and 2009, the stock market declined significantly. Many panicked investors sold their holdings at a loss. Those who stayed invested saw the market recover, reaching new highs in the following years.

Define clear financial goals, such as saving for retirement or buying a home, and build a long-term plan around them. Avoid making emotional decisions, and understand that short-term volatility is normal.

3. Diversify Your Portfolio

“Don’t put all your eggs in one basket” is a saying that applies perfectly to investing. Successful investors, including John Bogle (founder of Vanguard), emphasize the importance of diversification. By spreading your money across different types of assets, industries, and geographic regions, you reduce your risk of losing everything if one investment performs poorly.

For instance, if you invest entirely in technology companies and the sector experiences a downturn, your portfolio could take a big hit. But if you also own healthcare stocks, bonds, or real estate investments, losses in one area may be offset by gains in another.

Include a mix of stocks, bonds, ETFs, and other investments in your portfolio. If you’re unsure where to start, consider broad-based ETFs like the S&P 500.

4. Do Your Research

Legendary investors like Benjamin Graham, known as the father of value investing, stress the importance of understanding what you’re investing in. Don’t blindly follow trends or invest based on hype. Instead, spend time learning about a company’s performance, industry trends, and future growth potential before buying its stock.

Imagine you’re considering investing in a company because everyone’s talking about it. A little research might reveal that its financial reports show continuous losses or weak leadership. Insights like this can save you from making poor investment decisions.

Start by reading annual reports, checking financial performance, and reviewing the company’s leadership. For beginners, tools like Yahoo Finance or the investor relations section of a company’s website are great places to start.

5. Keep Your Costs Low

Successful investors understand that fees and expenses can eat into returns over time. This is why they often advocate for low-cost index funds or ETFs, which offer broad market exposure with minimal fees. John Bogle famously advocated for this approach, pointing out that even small fees can significantly reduce your returns over decades.

For example, investing in a mutual fund with a 1.5% annual fee might not sound like much, but compared to an index fund with a 0.1% fee, the difference in returns over 30 years can be tens of thousands of dollars.

Stick to low-cost investment options. Always review fee structures before making an investment, and avoid frequent trading, which may lead to additional costs.

6. Stay Disciplined and Avoid Emotional Decisions

The stock market can stir emotions, especially fear during market downturns or greed during rapid market growth. Successful investors like Charlie Munger emphasize the importance of staying disciplined and thinking rationally instead of making impulsive decisions.

For instance, when prices drop sharply, some investors sell out of fear of losing more money, often locking in their losses. On the other hand, disciplined investors recognize that these moments may present buying opportunities.

Create an investment strategy and stick to it. Set rules for when to buy, sell, or hold, and don’t stray from them, even when market conditions become volatile.

7. Reinvest Your Earnings

Instead of cashing out dividends or other earnings, reinvesting them can compound your returns significantly over time. Many successful investors attribute their wealth not just to early investments but also to allowing those investments to grow by reinvesting profits.

For example, imagine earning $1,000 in dividends annually from stocks and reinvesting them to buy additional shares. Over 20 years, the snowball effect leads to even larger earnings because your returns also start earning returns.

Most brokerage platforms offer Dividend Reinvestment Plans (DRIPs). Opt into these programs to reinvest dividends automatically.

8. Learn from Mistakes

Even the best investors like Ray Dalio acknowledge that mistakes are inevitable. What matters isn’t avoiding every mistake but learning from them and using those lessons to improve. Each misstep provides valuable knowledge that makes you a better investor over time.

For example, an investor might learn not to invest all their money into one trendy stock after experiencing a significant loss. Or they may realize the importance of diversification after missing out on gains from other sectors.

Treat every investment as a learning experience. Take notes on what works and what doesn’t, and use those insights to refine your strategy.