Four Tips to Help Simplify Investing

Investing your hard-earned money can feel overwhelming, even for the most experienced investors. But there are a few things you can do to simplify the process – and help you stay on track towards your goals.

In fact, the earlier the better. And you don’t need a lot of money.

Start by investing what you would spend on a pricey night out at a bar or restaurant…or start with your tax return refund! By starting early, you can take advantage of something called, “compounding.” Ever heard of the phrase “Make your money work for you?”…compound growth is one way to make that happen.

But what is it?Jaipur Stock

Think about building a snowman. First, you’d make a small snowball and then you’d roll it on the ground so that it picks up more snow and gets bigger faster.

…compounding works the same way.

Let’s break this down. Imagine you have an initial investment of 1,000 dollars that grows ten per cent each year for the next two years. In the first year, this investment may grow by 100 dollars. If you didn’t withdraw this money and kept it invested, then in the second year, you may gain 100 dollars on the initial 1,000-dollar investment – and you may gain ten dollars on the 100 dollars of growth from the first year. By the end of the second year, your initial investment may have grown by 210 dollars to 1,210 dollars. This is the power of compounding!

Funding your plan is one of the most critical steps in reaching your goal. While your investments may grow your money, a big part of your success will come from how much money you are putting towards your goal. Automating your deposits is a simple step you can take to help with this. You can set up your account so that a fixed amount of dollars will be transferred from your bank account into your Investing account.Surat Wealth Management

You can set up different frequencies, like bi-weekly or monthly. This will help better manage an impulsive desire to spend money on purchases before paying yourself first.

So, for example…while setting a plan to make a deposit of 100 dollars every two weeks doesn’t seem like a lot, it definitely adds up. After one year, you’ll have saved 26-hundred dollars. After two years, it’ll be 52-hundred dollars, and after four? Just over ten…thousand…dollars. All from your own savings!

By setting up automated deposits, you also don’t have to constantly remind yourself to make a deposit. You can continue growing your investments over time…passively. Grow my money without having to think about it? …yes, please!

If your account has dividend-paying stocks and ETFs, you can enroll in a Dividend Re-investment Plan, or DRIP. This lets you use those cash dividends to buy more of the same company shares, free of charge. So, if you have a stock that is worth 20 dollars a share and you get a dividend of 25 dollars, then one additional share will be automatically bought for you once it’s reinvested.

Any of these options can give you a little more control over your investment goal…and it’s actually another way to take advantage of compound growth. If you’re interested in any of these automatic deposits, give us a call and one of our Investment Representatives can set it up for you.

Making sure you’re still on track to meet your goal is an important part of investing. You can do this by checking in here and there to assess your progress…and confirm whether your plan is still doable. Periodic check-ins may be a good start to keeping your plan on track. Use your phone calendar to help remind you of when it’s time to do this.

For example, let’s say in the beginning, you were really excited about your goal and charted out an aggressive plan to reach it in a short amount of time. But maybe after a few months, you see that it’s too unrealistic for youbto make enough deposits to stay on track.

Or you may need to adjust to accommodate for a life changing event, like a new baby on the way or a change to your income. We’ll get into all of this in more detail in a later video. But the major takeaway here is that it’s wise to make a habit of checking in on your investments periodically.

You’ve heard the phrase, “all work and no play make Jack a dull boy”? Investing towards any goal – long-term, short-term – requires some form of commitment, but you can also make it a fun experience.Guoabong Wealth Management

Maybe you just reached your first small milestone, like saving 1,000 dollars towards your long-term goal of ten thousand-dollars …or maybe you just made your first trade ever! Either of these accomplishments seems like a good excuse to indulge into something sweet!

And what if you accomplish your goal ahead of time? Well, congratulations! Why not reward yourself for a job well done?

There you have it. As you set out on your investing journey, these four things can help simplify the process– and keep you on track.

Lucknow Investment