Fear and greed may be costing you lakhs, warns CA. Here are 7 wealth-killing mistakes to avoid

Most people believe wealth is built by finding the next big stock or timing the perfect dip. But what if the real damage is coming from simple, everyday mistakes? Chartered Accountant Nitin Kaushik has flagged seven surprisingly common habits that silently crush long-term investing and compounding. In a sharply worded post on X, he explained how emotional decisions, poor planning, and small financial indiscipline can cost investors lakhs over time.

Panic selling

Kaushik first pointed to panic selling. Many investors dump their holdings the moment markets correct by 10 to 15 per cent. According to him, this locks in losses and makes them miss the recovery that often follows.

Treating investments as backup account

He also cautioned against treating investments like a backup savings account for lifestyle upgrades. Pulling money out for vacations, gadgets, weddings or one-off indulgences may feel harmless, but each withdrawal chips away at future compounding.

Chasing the trends

Another major trap, he noted, is chasing whatever sector is trending at the moment. Whether it is electric vehicles, artificial intelligence or the next big theme, investors often enter after prices have already surged and exit after they fall. This cycle of buying high and selling low can seriously damage long-term returns.

No emergency funds

Kaushik stressed the importance of maintaining emergency funds. Without six to twelve months of expenses set aside in cash, investors may be forced to liquidate stocks during crises such as job loss or medical emergencies, often at the worst possible time.

Expensive funds

He also highlighted the hidden cost of expensive funds. Paying annual fees of 1.5 to 2 per cent might not seem significant, but over two decades it can eat away a substantial portion of the final corpus. Opting for low-cost options, he suggested, can preserve more wealth over time.

Waiting endlessly for the perfect market correction was another mistake he flagged. Investors who keep postponing their entry because markets seem too high often lose valuable years of compounding. According to Kaushik, time spent investing matters more than trying to perfectly time the market.

Finally, he warned against letting emotions dictate decisions. Greed pushes investors to load up near market peaks, while fear drives them to sell at bottoms. Without a written investment plan, he said, individuals risk making impulsive moves that sabotage their financial goals.