DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
With the stock market pretty much tanking out for the year, I have had some people ask me if they should just stop investing. I think it is ok to stop putting money directly into Stocks and ETFs, but your habit of saving should never stop. As I mentioned in my article last week about playing defense in the stock market, now is a time to certainly be careful. You need to read that article if you failed to read it last week.
The key to getting a large amount in investments is tied to just a few basic fundamentals. The first is having a HABIT of investing every day. If a person can get disciplined enough to invest $50 a day, it will take just a few years to accumulate a large amount of money. I have that goal. Currently, I am only investing $25 a day, but intend to try and up it a bit every month.
But just saving money is not enough. You need to have a plan on where and how to invest. Currently, 90% of my savings are going into either I-Bonds or CDs. A link to Capital One’s CD marketplace is included in the article above on defense in a bear market. Here is a link to buy I-Bonds. They are paying 9.62% until November when the rate resets. I anticipate that going to over 10% and if it does, those may be the best way to invest until we find a bottom on this horrible bear market.
Things that are important is to decide what to buy and how to invest. A good rule of thumb is to buy a lot of Dividend Growth Stocks and certainly buy several of the full index ETFs.
DGI Investing: https://lifecanbesimple.net/blog/dgi-investing
Also besides those full stock market indexes, consider some real estate trusts.
If you do all of these and then diversify your portfolio and get into all the different categories of investments, you will be certain to not miss out on what specific sector is doing really well each year. This includes buying some Emerging Markets ETFs and foreign stock ETFs. Also, you can purchase Mutual funds that tie to certain categories.
To get a lot of money coming in monthly, we must seek passive income.
Common Passive Income Streams
Another good article to read is the one about passive income and its importance in your portfolio.
We did articles on Dividend Paying Stocks and how to pick some good ones. One was on the Dividend Aristocrats and the other was on the Dividend Kings. Check those out for good leads on stocks that will not only pay dividends but grow in value also.
So whatever you do, don’t quit stashing away some money to savings. If you just save $5 a day, that is $150 each month. My $25 a day gets me over $750 additional per month. Start small but do start and continue. Perseverance and not giving up is the key to long-term success in developing and maintaining a great retirement portfolio.
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