Want To Make $10K Without Lifting a Finger? Here’s How I Did Just That.
It’s not rocket science…
I opened up my Charles Schwab app to see something shocking and beautiful.
My money had grown.
And I didn’t put in much effort.
This is how I did it.
Mutual funds
I’ll try not to bore you with the nitty-gritty details of a mutual fund.
Mutual funds are portfolios of stocks, bonds, and other securities. They are overseen by a money manager.
So what does that actually mean?
When I invest in a mutual fund, I’m throwing my money into a pool. Then, the managers of that mutual fund take my money, along with all the other people throwing money in, and invest it in a combination of stocks, bonds, and other securities.
When investing in individual stocks, there’s no diversity. You choose a specific company and hope that the company does well.
With a mutual fund, you’re getting a tiny piece of many different stocks. It’s like the difference between buying individual fruits vs. buying a smoothie that’s made up of a bunch of different fruits.
I hope that makes sense.
Anyways, there are plenty of mutual funds that historically earn 7% or more.
The key is to go for low-cost mutual funds. You don’t want to be paying a significant percentage of your earnings to the people managing the fund.
If you do that, you’ll just earn less.
Start small
If you can only set aside $5 each month, that’s better than nothing.
If you don’t learn to invest, you’ll likely look back in several years and wish that you’d started.
The more you can set aside, the better.
Automatic investments
You can set up automatic investments on a monthly, quarterly, or annual basis.
I’ve set things up so that I’m investing in mutual funds on a quarterly basis. Investing frequently allows you to buy at different prices.
Automatic investments allow you to set it and forget it.
I put very little time and energy into my investing. I determine what number I can reasonably invest given my current income and lifestyle.
Then, I set things up to work in the background.
Don’t get emotional
People make mistakes when they get emotional and follow the herd.
They sell their shares when the market is down. They invest when the market is up.
That is the worst thing you can do.
If you pull your money out when the market is down, you’re going to lose a lot of money.
If you put your money in when everyone is doing so, you’ll likely be purchasing things at an inflated price.
“Be fearful when others are greedy, and be greedy when others are fearful.” — Warren Buffett
Don’t get emotional and follow the news religiously.
The key with mutual funds is that they rise over long periods of time. When I’m putting my money in, I’m not looking at what’s happening today or tomorrow.
Yes, it’s fun to see how things are doing from time to time.
But I’m looking at a 10-year or 20-year horizon.
I don’t make my decisions based on the economic climate, the news, or anything my well-meaning friends or family tell me.
Do your research
Spend a little time doing some research. Determine which mutual funds are low-cost and reliable.
Mutual funds are pretty low-risk compared to individual stocks.
But if you are very conservative, you could even consider putting your money into a savings account. These days, some savings accounts are paying nearly 5% interest.
That’s better than letting your money sit in a checking account where it won’t grow.
To be clear, I am no financial advisor. Take my thoughts with a grain of salt.
I’m just sharing what’s worked for me.
You are in control of your finances.
If you can do a little bit of reflection, research, and planning, you’ll be better off than most people.
The feeling of making money without working is incredible. It pushes back on the narrative that you need to work hard to make money.
Wealthy people invest in assets and watch them grow.
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