Retiring head of FINRA foundation: FOMO is investors' biggest mistake

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school, I had more than doubled all of my undergraduate debt,” Walsh told Yahoo Finance. “I thought that I would then graduate from law school with times four my undergrad debt. I figured I needed to become a lawyer in order to pay off that debt. But I graduated with times seven.”That was her first financial mistake. “Then I cashed out my 401(k) after only a couple of years to buy a house. I could have borrowed from my 401(k) to put that down payment together, but I didn't understand how they worked.”Those financial missteps propelled Walsh, who is retiring this month, to dedicate her career to helping people make smart money decisions throughout their lives.For many people, a financial life path starts with enrolling in their employer’s 401(k) plan and understanding that they are now an investor, she said.“You need to think about your choices and to adjust those choices over time, whether it's what you're invested in, how much you're investing, how much you grow those assets by increasing your contributions until you're contributing to the maximum,” Walsh said. “And also understanding how the power of compound interest can work in your favor.”Read more: How much do you really need to save for retirement?Higher levels of financial knowledge are correlated with “more positive downstream financial behaviors and outcomes,” she added.She should know.Walsh was deputy director of the Securities and Exchange Commission’s Office of Investor Education and Assistance and served as a senior attorney in the SEC’s Division of Enforcement, investigating and prosecuting violators of the federal securities laws.Walsh’s passion for education has been the spine of it all.Financial literacy is still lagging in the US. A recent FINRA study found that fewer than 3 in 10 Americans correctly answered at least five of seven basic financial knowledge questions. On average, respondents answered slightly less than half of the investing quiz questions correctly.I reached out to Walsh for one last interview before she steps down. Here are edited excerpts of our recent conversation:Kerry Hannon: What are some of the biggest mistakes investors are making today?Gerri Walsh: FOMO is the biggest mistake — the fear of missing out on a new product, a new strategy, or on market movements. 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