Before the kids go on summer vacation, I am examining 5 tasks that you can complete in 5 minutes each to improve 5 different areas of your finances!
Last week you wrote down your dreams!! If your dreams don’t scare you a little, then you’re dreaming too small. And now that you’ve written those goals down, I’m gonna tell you a fun fact, according to a Harvard Business study:
- 83% of the population have NO goals
- 14% have a plan, but NO written goals
- ONLY 3% have written goals
- The study went on to find that the 14% who have goals are 10 times more successful than those without goals.
- The 3% with written goals are 3 times more successful than the 14% with unwritten goals.
So… WELCOME to the top 3%, beautiful!
Investing is an important check box for financial adulting… and there are countless ways to leverage your money. For the sake of this e-mail, I’m talking about investing in the stock market.
Why should you invest? Because putting your money in a high interest savings account isn’t good enough. Smart investing may allow your money to outpace inflation and increase in value. BASIC investing will in all likelihood earn you at least a 9% return, whereas with a savings account you’d be LUCKY to get 1.5%.
Now, I’m not talkin’ about emptying your whole bank account into the stock market. Smart investing is like putting monthly contributions into a time capsule. It is NOT trying to time the market and invest in the next pre-pandemic Shopify (which, by the way, went up 2373% over 5 years…)
The magic of compounding interest can only work with a healthy dose of time, so get your dollars working for you ASAP.
That’s how much money you could lose by waiting to start saving for retirement for a single year. According to David Blanchett, head of retirement research at the institutional asset manager QMA, a person who starts putting $5,000 annually into a retirement account at age 25 will have $475,128 saved by the time they turn 65. If that same person held off for just one year—and started contributing $5,000 a year at 26—they’ll retire with $452,046. That’s more than $23,000 lost by simply delaying ONE YEAR.
Researchers in Britain who pitted the investment strategies of monkeys against the market in an experiment concluded that the monkeys, over time, were better at picking stocks. So… don’t bother paying that mutual fund manager. You could literally hire a monkey. Or better yet… just do it yourself!
Now obviously we aren’t gonna tackle the giant topic of investing in 5 minutes… and you’ve already spent that long reading this post.. but here is your simple task for this week:
If you HAVE investments, make an appointment with your financial planner to discuss how they are doing. Are you on track to achieve the goal you set for the investment? Do you need to adjust your contributions?
If you DON’T have investments, find a financial advisor that can get you set up. (Compare fees, services, and products!)
Just GET IT ON THE CALENDAR.
(P.S. if you’re really interested in learning to DIY your own stocks, I’ve got a real simple step-by-step guide for ya HERE)
Money Area: INVESTING
- The biggest investment mistake you can make is to NOT invest.
- The average mutual fund fee in Canada is 2.35% The average ETF (exchange traded fund) is 0.2%. (so… do this one.)
- Every year you don’t invest, you lose out on compound interest… so get on that task! MAKE AN APPOINTMENT TODAY.
PSSST: if you don’t have an advisor, we are licensed all across Canada and would be happy to help you! Just e-mail me: firstname.lastname@example.org
As always, share your questions with Make Your Money Pretty crew, because you can help each other figure out ways to make your dreams attainable!