Look… I’m not an expert on the economy. I don’t have crystal ball, nor can I tell the future. I’m in the same boat that you are – inflation is way up, house prices are crashing, mortgage rates are increasing, stock markets are wildly volatile.
What does all this mean from one day to the next?
I don’t know. And neither does anyone else.
During these economic challenges, my financial goal is to stay on track. I can’t control the stock market, but I can control whether I continue to invest. For a very long while, I’ve shaved off a good chunk of my paycheque and have automatically invested it into my various exchange-traded funds. When the market was going up, I was investing. And when the market was going down, I was still investing. Right now, the market is correcting. Guess what? I’m still investing my money, bit by bit.
My advice to you is that you should be investing too. Start where you are right now. Pick a broad-based equity fund and automatically have some of your money invested into it every time you get paid. Start with $1/day. When you’re able, increase that amount to $5/day – then $10/day – then $20/day. And if you want to invest even more than that, be my guest. The more money you invest, the better.
You start where you are, and you do what you can. I’m not going to promise that it will be fast or easy, but I can assure you that the formula is quite simple. Consistently investing some of your money on a regular basis will work.
The Talking Heads of the Financial Media should be ignored. They cannot tell you your future because telling the future accurately is an impossible thing to do. Their job is simply to talk about what might happen. Listening to them will not calm you down. I would even venture to say that one part of their job duties is to increase ratings & views. Right now, there are enough economic shocks and global catastrophes to keep their doom-and-gloom chinwag flowing for a very long time.
Again, you should ignore them. Concentrate on your own goals.
You need to focus on that which is in your control. Despite how it may seem, you have more power than you may think where it comes to your money. Firstly, you can control how much you choose to invest from your disposable income. If you invest $0 today, then you’ll have $0 tomorrow. The more you invest and the longer you leave it to grow, then the more money you will have. It’s that simple.
Secondly, you get to control whether to listen to the Talking Heads. Go back and re-read what I just wrote. They are to be ignored while you stick to your knitting. Quick refresher! Your “knitting” equates to consistent investment in equity-based ETFs or index funds over a long period of time, regardless of whether the market is up or down.
Thirdly, you are in control of ensuring that you choose to re-invest the dividends and capital gains to increase the power of compounding your returns. Dividends and capital gains are money that you didn’t have to sweat for. You lived without them before you earned them. Continue to live without them and just re-invest them. At first, they’ll be worth pennies and maybe a few dollars. After a few years, you’ll be earning thousands. They will continue to get larger so long as you re-invest them for further growth.
Finally, you and only you control whether you start today or whether you allow procrastination to flourish. It should be obvious by now that I want you to stop procrastinating. Do not let analysis paralysis stop you. Start investing today. You won’t make a “perfect” decision, and that’s okay. Nobody else is making “perfect” investing decisions either. Just start today.
From here on out, I want you to be investing bit by bit until you achieve your financial goals. Start today. Keep going when it’s hard. Don’t stop until you’re rich. That’s it – that’s the plan. Implement it.