OPINION: Five investment myths that could cost you in retirement

When it comes to investing, what you don’t know can hurt you — and what you think you know might hurt even more. Conversations about money often have a degree of fact, tradition and hearsay. From “land never loses value” to “saving is enough,” myths about investing can quietly sabotage your long-term goals. Here are some common beliefs that could cost you a comfortable retirement — and what to do instead.

Myth: It’s too early to save for retirement

When you’re in your twenties or thirties, retirement can feel like a faraway concept — something to think about “later” once you’ve bought a car, built a house, or paid off loans. But time is the one advantage you can never recover once it’s gone, and in investing, it’s your greatest ally. The earlier you start, the more power compounding has to quietly multiply your money. Even modest monthly savings, when given 20 or 30 years to grow, can snowball into a substantial retirement fund.

Compounding works like planting a tree — the sooner you plant it, the more seasons it has to grow and bear fruit. Each year’s earnings begin generating their own returns, creating a chain reaction of growth. Waiting until your 40s or 50s compresses that timeline, forcing you to save much larger amounts or take on higher-risk investments just to catch up. Starting early doesn’t just build wealth — it builds flexibility. It allows you to make choices later in life without the pressure of playing financial catch-up.

Myth: The stock market is like gambling

Gamblers hold on to the possibility, however remote, of walking away rich that drives many. Investing, on the other hand, does not have to be a zero-sum game. While blindly following a “hot tip” might end as poorly as putting it all on red at the roulette table, making informed decisions to broadly diversify funds across typically stable, revenue-generating companies has shown a much higher rate of creating value over successive periods.

Short-term plays that ignore long-term fundamentals may increase vulnerability. This is why wise investors aim to replace chance with due diligence and disciplined participation or investing through mutual funds that are run by skilled investment managers.

Myth: Past performance reveals everything

It’s tempting to rush toward the fund or SACCO that posted the highest returns last year, hoping lightning will strike twice. But markets don’t move in straight lines. The fund that outperformed in one cycle may struggle in the next as interest rates shift, management strategies evolve, or the broader economy changes direction. Relying only on past performance is like driving by looking in the rear-view mirror — it shows where you’ve been, not where you’re headed.

Instead of being swayed by short-term numbers or glossy reports, dig deeper into why an investment did well. Was it because of strong management, good asset allocation, or temporary market conditions? Consistency across different market periods is a better sign of a resilient investment. Over time, patience and understanding tend to reward investors more than the constant chase for last year’s “winner.” The best results often come from holding well-managed, transparent funds that have demonstrated discipline and good governance over the years.

Myth: Cash is king, especially in uncertain times

While holding some cash is important for emergencies or short-term goals, keeping all your wealth in cash is one of the most silent ways to lose money. Inflation gradually erodes the buying power of every shilling you save. The prices of food, transport, rent, and healthcare rise faster than the interest most savings accounts pay — meaning that what buys a full shopping basket today might only buy half in a few years.

Someone who keeps 100% of their assets cash feels safe in the short term but steadily grows poorer in real terms. The goal isn’t to abandon cash altogether, but to let it play its proper role — as liquidity for daily needs and a safety buffer, not a long-term investment. To grow wealth, part of your money must work for you through productive assets that generate returns higher than inflation — whether in equities, bonds, or well-chosen funds. Cash preserves stability, investments preserve value.

Myth: Real estate is always a good bet

Land and property are deeply ingrained in Kenya’s investment culture. Yet, real estate can also lock up capital, require heavy maintenance, and carry legal risks. In areas where land prices have plateaued or projects have stalled, your returns can be disappointing. A balanced investor pairs tangible assets like land with more flexible, income-generating investments such as unit trusts, bonds, or equities. Real estate shouldn’t be your entire plan.

The bottom line

Smart investing is about balance, discipline, and awareness. Evaluate your investments after inflation, seek transparent advice, and start early. Don’t follow trends blindly — understand what you’re investing in and why. The earlier you begin and the more consistently you stick to a sound plan, the less you’ll rely on luck later in life. Your retirement comfort won’t depend on how much you earned, but on how intentionally you grew what you had.