A quick and easy guide to investment

Investing is the single most effective way to get rich. By opening an investment account, you have access to the biggest money-making vehicle in the history of the world: the stock market.

But a lot of you believe you have to do some complex, fancy work to invest… or that you have to have a lot of money to make the most of investing.

This is not true:

You don’t have to be the smartest person in the room to invest, you don’t have to be a millionaire, and you don’t have to follow the hottest takes and trends.

And remember this: you likely can’t beat average returns. In relationships and work, we want to be better than average. In investing, average is great.

So ignore the appeal of these flashy, alluring takes. Average might sound boring and unsexy, but choose being rich over being sexy. When it comes to investing, that means we just have to do this:

  • Pick a low-cost index fund that tracks the S&P 500
  • Automate our investments
  • Let our money grow over time

All that’s required from you is a bit of time and effort to actually set up your financial system in the right places. You can start by following my Ladder of Personal Finance approach below.

Start investing early, and do it automatically

Every year you wait to get started with investing, you miss out on thousands of dollars. This is an example:

Dumb Dan invested for 20 more years than Smart Sally but is still behind by $50,000. Meanwhile, Smart Sally has $200,061 in just 10 years. She just started early and continued to invest over time.

To make sure you’re investing regularly, I recommend setting it up automaticallyso you don’t need to think about doing it. This is the best way to take advantage of human psychology: we all get unmotivated, distracted, and forgetful. By setting up an automatic system, you’ll continue investing even when you ‘re busy or focused on other things.

I recommend automating every step as you go through…

Source link

Recommended For You

About the Author: News Center