How many times have you said to yourself, “I want to start investing?” Yet, for some reason you never find the time, money, or confidence to start. Does investing in the stock market scare you? If so, just know that you are not alone. Many people, especially millennials, value cash more than they do investments. It is easy to value your short-term needs more than your long-term needs, but unfortunately, this mindset will not serve you well in the future. If you want to start building wealth, you have to stop relying on your checking and savings account to get you there. They were not made for you to get rich, so in order to obtain something greater, you have to do something different. Start investing and stop relying on old thoughts and habits to create new realities for you in 2019.
By only focusing on the now, you are bound to lose sight of what matters tomorrow. To ensure that life is greater later, you have to take care of all your long-term and short-term financial needs (not just some). It’s time to get out of your own way and multi-task. Saving money will not help you build wealth. It actually causes you to lose it. If you solely put your money aside and leave it in a savings account, the value of your money will continue to decline year after year. This is called inflation. Every year, 2-3% of your money’s buying power gets eaten away due to inflation, so storing money under your mattress or in a savings account won’t fix your money problems. For example, think about how many groceries you could get with $100 five years ago. Now, how many groceries can you get with $100 today? This decline comes as the result of inflation. The cost of living is rising, and life gets more expensive each year. If you desire to be wealthy, now’s the time to learn how to make money in your sleep by investing it, not saving it.
In order to start thinking like someone who is building wealth, you have to approach investing in the stock market with a long-term outlook. As an investor, you have to know that, of course, the market will decline. Based on how things are looking now, there just might be a big decline in 2019. Are you going to let that scare you? Now’s the time to be enlightened, not frightened. You learn the most in life during your toughest times, right? So, why not set out to learn, read, and build wealth now? In any year, the stock market can go down 20-30%, and this has actually happened multiple times in the past 50 years. However, if you stop getting caught up in your emotions and think about the longevity in wealth building, you’ll see that the stock market has averaged an 8-10% return over time. The stock market isn’t always up, and the stock market isn’t always down. Just like in basketball, there are good games and there are bad games. However, by not getting in the game at all, you are bound to never win a championship.
Here are 3 ways to help you get in the game of investing:
- Stop thinking that investing is for people with a lot of money.
Although you may not come from a wealthy family, that doesn’t mean you do not have the ability to create one. You have the power to create your reality, and if building wealth matters to you, start developing the habits of a wealthy person. You somehow created a story in your mind that has you believing that you cannot invest. You feel like it is something hard and that it’s too complicated for you. But just like you wrote that story, you can begin to write a new one. Start to learn more about investing, and by learning more, your confidence will grow. You are a wealthy person, and you have everything you need to start manifesting this belief into something tangible.
- Pick a monthly amount to invest
For some reason, many believe that it requires millions of dollars to invest. Therefore, if we don’t have a lot to invest, we end up not investing at all. This, too, is another story that we can rewrite. Some of the most well-established household brand names have stock prices that are under $300. Take a look at a list of all the companies that are in the S&P 500. Look into the company names that you recognize and locate their stock prices. See if there are any affordable stocks that you wouldn’t mind investing in. You will be surprised to find that so many companies are affordable for beginner investors. As long as you are willing and able, you, too, can own a piece of a company by investing in their stock.
- Open a brokerage account.
There are 3 main accounts that every person should have: a checking account, savings account, and brokerage account. When looking for great brokerage accounts, you want to look for 3 key qualities: 1) Low or no-minimum balance requirement, 2) Low (less than $10) or no transaction/broker fee, and 3) Easy interface and educational resources. If you do not have a lot of money to start with, consider opening a brokerage account with no minimum to start.
If you have enough money each month to spend with another person or company, but not enough to invest for yourself, you are headed downhill. You have to start channeling the same energy you put into making money into investing it for your financial future. You should be investing small amounts of money in your brokerage account until it becomes a habit. If you develop the habits and mind of an investor, life will start to change right before your eyes.