If You’re Not Investing, You’re Losing — Big Time
A Starter Guide To Investing
Let’s Start With Definitions
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen
Investing
Expending money with the expectation of gaining a profit from those expended resources.
Stocks
Resources raised by a business or corporation through the issue of shares.
Mutual Funds
Diversified holdings that are professionally managed and funded by shareholders.
Compound Interest
Interest that is calculated on both accumulated interest and the initial principal = A gift to you.
Compound Interest Calculator There are many resources and websites that offer compound interest calculators that can show you how much you need to save, at what interest rate, and the amount of time it will take to reach whatever financial goal you desire to achieve. Go to Google and type in compound interest calculator, and you will see different compound interest calculator options that you can toy around with.
Compound interest is a beautiful phenomenon.
Become A Millionaire
If you happen to want to be a millionaire, I want to let you know that it is possible; it does not have to be just a dream. You can make this financial status a reality. You may have already heard this before and had thoughts like, “I wish!” Well, dreams and wishes can come true, my friend.
Investing is one of the most powerful actions you can take with your money. Investing provides you the opportunity to save smaller amounts of money, yet gain tremendous returns over the long or short-haul.
The Power of Compound Interest
The power of compound interest allows you to make the dream of becoming a millionaire a reality. If you saved $2,000 every month for 40 years, you would have $960,000.00 saved up (and this is without any interest factored in), but let’s be real: Not everyone has $2,000 to save every month, which is exactly how and why compound interest can make your life easier.
Let’s say you decide to invest $100/month at a 10% interest rate in a mutual fund, starting at t5. You decide to follow this plan for 40 years. At the end of that 40 years, you will have accumulated an estimated $530,000-$585,000.
Now let’s say that you do have $2,000 to save every month. You will have accumulated $10,000,000-$12,000,000 after those 40 years of investing.
Now, do you understand how valuable and useful the practice of investing truly is for your financial future?
You can literally evolve into a millionaire by simply saving a certain amount of money and investing it every month or year. If you start saving $200.00 by the age of 25 in an account that offers 10 percent interest, then you will have over a million dollars saved by the age of 65.
If you are intimidated by investing and all the financial jargon, then get a financial advisor. Many financial advisors are honest and willing to take care of both you and your financial future. But remember, it is critical to take the time to learn the basics of investing to ensure there are always two sets of eyes watching your investments grow and develop over the decades.
Investing does not have to be hard. You can invest aggressively or moderately. The more aggressively you invest your money, the more you risk losing money, but the greater your financial rewards will be.
On the other hand, if you invest your money less aggressively, your risk of losing money will be lower, and you will receive smaller financial rewards.
The benefit of investing in mutual funds is they usually offer a mixture of low-risk and high-risk investments, which means you will get the best of both worlds: security and growth. If you decide to embark upon the investment journey, choosing a mutual fund is a great way to start.
Proactive Plan
If you have not already started investing and want to get started, then take a moment right now to set up an appointment today with a financial advisor at a financial firm. Many reputable financial firms do not require big initial investments. Do your research to figure out which financial firm is going to be the right fit for you.
Or, try out some Robo-investing applications; all of your investing needs are taken care of if you go this route; all you have to do is sign up.
The best thing you can do for yourself and your financial future is to start saving and investing today — even with as little as $10/month; remember, small amounts over time add up BIG TIME.
Play around with the compound interest calculator and input the right numbers to see how you can start working toward achieving your financial goals today.
If you are already working a full-time job, your employer may offer a 401k matching program — quickly take advantage of this!
Takeaway
Investing is both a critical and powerful tool. You don’t have to have a degree in finance or economics to understand this. You also don’t have to be a financial genius to invest your money. All you need to do is find a solid, reputable financial firm or bank, or even start using your employer's 401k option (if you are working or have this benefit at your job), and start investing your money today.
It is salient that you complete your own financial research; always be skeptical and smart about saving and investing your money. I recommend reading the most basic of books on investing so you can go about investing the smart and easy way.
The more you know about money, the smarter you will utilize it, which means the better it will treat you, which equates to the greater your rewards shall be.
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Destiny S. Harris is a writer, poet, entrepreneur, teacher, and techie who offers free books daily on amazon. Destiny obtained three degrees in political science, psychology, and women’s studies. Follow her on Instagram, Facebook, or @ destinyh.com
