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In this post, you will learn about the benefits of investing in stocks and how to set yourself up financially to make the most out of your investment life.

Why buy stocks?

  • Owning shares means ownership of a part of a company.
  • The funds invested are working for you 24/7.
  • Money invested can grow much faster than money in a savings account.

Have you ever wanted to own a part of a large company? This is exactly what happens when you buy. They bought some of that business. As the owner of a share, you have the right to receive a share of the profit and assets of this business.

You can take advantage of owning shares in one of two ways.

  1. The company may decide to return the money to its shareholders through dividends. This is the money you are regularly paid to be a shareholder.
  2. Business is growing and the share price is rising. Once you decide to sell your store, return the task.

While the money held in a savings account is eaten by inflation, the money invested is working for you 24/7. Unlike a bank account, your original amount can be multiplied many times if you invest in the right companies.

On average, the stock market returned about 10% year-on-year 1974 (excluding inflation). This easily beats the 0.5% you get by saving your money in a savings account.

 

Financial goals

  • Invest: Get started, but get started now!
  • $ 2,000 can be nearly $ 100,000 after 40 years (with a return of 10% per year).
  • Investing in stocks can help you pay for your biggest goals.

This 10% increase in average may not seem like much, but if given the opportunity, it provides an incentive to make a positive contribution.

Imagine someone telling you how you could turn $ 2,000 to $ 100,000 without all the work? It sounds great to be true, but it is very powerful if you understand the interest (which will be discussed in the next lesson).

It is important to remember the time here. The longer you invest in your money, the bigger the mix can be. This means that the younger you are, the longer you persist, the more likely you are to write in the future.

However, you don’t need $ 2000 to get started. You can start small and continue improving your investments over time. You will be surprised how fast your investment grows. Yes, if you add $ 100 a month to your $ 2,000 investment, you will have almost $ 1 million after 40 years.

You will have both a winner and a loser, but if you learn how to know the company well, you will have some stocks that are up to 10 times (or more) high value. years.

The biggest choice you can give yourself is to start early and let it mix its magic.

Compound magic

  • Compound interest is when you start making money.
  • The easiest way to get rich is to dress.
  • The earlier you start investing, the more you need to increase your income.

Compound interest is the best friend of investors. Only when you start making money is compound interest. This means that if you only add one face per month, your stash will grow quickly.

So many people said, “I can’t afford to start investing.” The truth is you can’t start investing because time is the problem here, not money. Compound interest is a real silver bullet that can increase your wealth and provide you with more wealth.

Over time, a deposit certificate (CD) or government bond can give you 5% per annum. The annual return of 10% is the historical average of the stock market. If you can use your skills to pick stocks and teach Myvalist, you will get a return of 15%.

Most people subscribe to some forms of online entertainment services, such as Spotify Premium or Netflix – both have many subscriptions. We left our bank account for $ 18 a month, and we rarely noticed it.

For example, when you were 18 years old, you subscribed to both services and remained a loyal customer for the next 50 years. You will withdraw $ 10,800. “You don’t look bad,” I heard you were young

Conversely, if you stayed $ 18 in the savings account, you should have a $ 10,800 pension and some interest. Of course, inflation will consume a lot of money, so keep your convenience on your subscription account and the benefits are not important.

If you invested the money after one year, did your original investment increase by 10%? The next year you become more interested in your interests. It’s like adding a continuous layer that is thicker than the end. So if you continue to invest in this money after 50 years, it will be worth over the US $ 300,000.

Do you still think you can’t afford the startup costs?

Pay yourself first

  • A good goal is to save 10% of your total income.
  • Set up an automatic transfer to save on the day you verify your salary.
  • If you pay for yourself first, you may notice that there is less money to spend.
  • Now that we have decided that you are capable of getting started, how are you going to create that investment fund?

If you are someone who has trouble saving money, this is where the biggest change is coming. Without a Disciplined Saver, you cannot invest.

Instead of saving what you don’t spend, spend what you don’t save.

Think of it as an investment yourself. You have to pay yourself first.

You’re already paying the companies behind your credit card, gas, water, electronic, cable and phone bills every month, right? Now, add yourself to the list

So how much do you have to give yourself?

Aim for 10% of your gross income, but nothing is better than nothing. This may seem like a lot to those who struggle to pay the bills every month, but the less you spend on hand, the less. Set up automatic transfers so that your payments get left out of your account as you make payments. You might be surprised at how quickly you can adapt to spend a little less.

Ideally, you should invest this money in the stock market, where 10% of its average annual income and growth can start building your wealth. However, if you know you will need that money in the near future, it is best to keep the cash. This will ensure that you do not have to sell your investments prematurely and not lose money in the down market.

Once you’ve created an emergency money cushion, you can start investing.

 

  • Every dollar is an investment in your quality of life.
  • Make a bag of money for 3-12 months for your investment.
  • Keep track of your spending by writing it or using an online device to help.

Retaining cash is an important step before you start investing. While it’s natural to jump right in and take your money to the market, it can be dangerous. A successful investor understands that in the short term, your investments can lose money.

We recommend a long-term purchase and investment philosophy. If you put all your money in the market, you may need it in the near future. The market can drop to a level that means you have to sell your investments at a loss. If you have money cushions, you can leave your investments intact and wait for recovery.

Therefore, you should try to increase your cash flow by at least three months.

This may seem daunting to you, but it’s easy to train yourself to save money and once you get used to it, you’ll enjoy the balance every month.

Short-term debt withdrawal

If you pay high-interest rates on credit cards, you should retire with this pension. You cannot generate long-term wealth while paying up to 20% of your short-term debt.

Treat every dollar as an investment.

If you want to be a successful investor, then this is an important framework. Investing is more than stock. We invest every day. Something important is this, such as a roof over your head. Some of this is unnecessary, like a new pair of sneakers you don’t really need.

The next time you take out your credit card, ask yourself, “Can I make this my best investment right now?” You don’t have to leave your wallet every time you do it, but just practicing this routine can help you save a lot of money.

Keep track of your spending.

Wondering at the end of the month where all your money went? It happens to us over and over again.

A good way to get rid of this is to look for your spending. There are lots of apps to track where your money is going. You might be surprised to find out how much you spend just having lunch every day or taking an extra cup of coffee from Starbucks.

These are small changes you can make that can increase your overall wealth.

Timeline

 

  • If you need money next year, it should be cash.
  • Next year you should invest the money you don’t need.
  • You should invest in a 5-10 year timeframe.

GO Long!

 

When choosing how much money to invest in the stock market, it is important to consider how long it will take before you need this cash.

 

Follow the two thumbs here when deciding which is the smartest, safest and most profitable place for your savings.

 

Rule 1

“If you need your money next year, it should be cash.”

 

The stock market can fluctuate greatly. You need cash for a down payment on your first home, and it’s not safe to say that your stock has dropped by 50%.

 

If you want to buy a house, a wedding plan or car in the coming year, have the necessary funds savings or money market account. (Double-check that it is FDIC-insured too))

 

Rule 2

“The money you don’t need next year is a stock market candidate” “

 

That’s where the fun begins. And that’s why we encourage you to save!

 

Next year, the cash you don’t need can go to work in the stock market every day for you … bigger risks and makes you more profitable.

 

When you make an investment that is not urgently needed for the fund, you protect yourself from short-term fluctuations in the stock market. For a year or two, you’ve seen your investment suffer, but in the long run, the stock market and great companies become bigger and more profitable.

 

This is why you should invest 5-10 years in mind. This will prevent you from being pulled down and damaged by your funds.

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