Don't Be a Turkey

\When managing your money, avoid these common financial mistakes:

• Racking up credit card debt. High interest rates increase your debt, making it harder and harder to pay off. That's reverse investing! (Learn more and get help at www.fool.com/ccc.)

• Not investing soon enough. You're rarely too young (or too old) to invest. Kids have the most to gain from many decades of stock appreciation. Even retirees may benefit from leaving in stocks whatever money they won't need for five or 10 years.

• Investing too conservatively. Any long-term investment is likely to grow most rapidly in stocks, over the long term.

• Over- or underdiversifying. If all your eggs are in two or three baskets, you're exposed to too much risk. But if you have too many baskets to count, then you probably aren't able to keep up with each company. Between five and 15 stocks is manageable for most people.

• Focusing inordinately on a stock's price. A "cheap" stock isn't necessarily a bargain. Penny stocks trading for less than $5 each are often risky and overvalued. A $150 stock can actually be a bargain, and if your funds are limited, you can always buy just a few shares.

• Investing in what you don't understand. The more familiar you are with how your company works and how well it's performing, the fewer unpleasant surprises you're likely to encounter.

• Relying on tips. It's great to learn from others, but ultimately you should make your own decisions. You're the one who cares the most about your finances.

• Not tracking your returns. Shrug off this duty at your own peril. You always want to be (in the long run) beating a benchmark such as the S&P 500. If you're not beating it, you might as well meet it, by investing in an index fund.

• Impatience. Building great wealth takes time.

Learn more in "The Five Rules for Successful Stock Investing" by Pat Dorsey (Wiley, $17) and at www.Fool.com.