Investing is a way to make money without working. To make money without spending time. It’s a great way to reach financial independence.
Let’s dive in.
Invest and grow
Invest more and your money will grow. Sounds simple. And it is. It’s just not quick and not really easy. It might take long to save your first $100,000, but compounding will speed things up. You will get to $200,000 faster then you got to your first $100k.
It even takes less time to go from $200,000 to $300,000, to a million and beyond. It just gets faster. More money in less time. Saving just 1% more each month makes it compound even faster. Every dollar makes a difference.
These numbers may feel huge and unattainable, but you can get there by getting started and taking it one day at a time. You might be scared or don’t know enough about investing, but please don’t sit on the sidelines.
It’s better to get started than wait for the perfect investment. If you’re waiting to time the market, you’re wasting time. Nobody can do it. Not even me 😇
Play the long game
A much better way is to play the long game. You’ll learn fast and you’ll make mistakes. I did. Most of us have. You can learn from them.
Start with automation. You can set up your 401k, Roth IRA or other investment accounts to take money from your pay cheque or bank account. Most investment account managers make it so easy to set up automated investing. You can buy shares of mutual funds, ETFs, stocks and bonds.
You can invest in ETFs in most accounts. They charge little and have no minimums. You can start a $5 account and invest small amounts daily.
But automation isn’t enough. If you automate your money and save consistently, you may think you’re saving enough, but you’re not. Saving enough is not the same as saving as much as you can.
I know, we’re all busy. Life happens. Priorities change. If you want the best returns and make as much money as possible while you sleep, you need to combine automated and manual investment approaches. A so-called hybrid investing approach.
The hybrid investing approach
A hybrid investing approach that combines automated and manual contributions can help you become financially free. This is how it works:
- First, make sure you’re automatically putting more of your income into your investment accounts. If you’re currently contributing 8%, why not try 9% next week? If you’re already at 15%, aim for 17%. These small increases can have a big impact on your long-term wealth, so please try.
- Next, invest any extra money you earn. Invest this money as soon as you can. This will help grow your wealth even faster.
Look, you don’t have to invest all of your bonus or extra income. Have a balanced approach. Invest 60% of your bonus while allowing yourself to enjoy the remaining 40%. This way, you can treat yourself while still making significant steps toward your financial goals.
I really recommend you boost your contribution rate as much as possible over time. Try to boost your savings rate by 1% or more every 30 to 90 days. Certain months will be easier than others. But with 1%, I guarantee you won’t feel it. Push yourself!
This pushing will let you save the most money possible. And, while this may seem unreal, it becomes simpler over time. You’ll notice your investment balance growing faster than you thought possible.
Last remarks
And like I mentioned before, if you receive a raise or bonus, invest as much as possible. When you make an extra $60, for example by filling in online surveys (like I did), invest it. It will just take a few minutes. You’ll thank me later 😊
Hopefully, this intro was somewhat helpful. If it is, please let me know. And if it wasn’t, I would really like to know why.
Have a great day!
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