Around 70% of US adults have less than $1,000 in their savings account.
If you belong to this group, you may find yourself continually struggling with money worries. One way you can solve this problem is by learning how to invest your money.
This post will show you how to create a personal investment plan. If the sight of your savings account fills you with despair, these tips will help you turn things around.
Let’s begin!
1. Make Long Term Decisions
When making investment decisions, it’s vital you focus on the long term.
While there are stories of people that have made a lot of money, in a short period, you shouldn’t aim to do that yourself. That’s because doing so can be very risky and can lead to you losing your entire investment account.
The better option is to look at things over a five to ten-year horizon.
If you adopt this approach, you begin to see how your returns can compound over time and lead to huge gains.
For instance, if you can earn a 10% return, then over five years, $10,000 can become $16,453.09.
The number rises so quickly because you earn on the interest too. Thus, even if the interest rate remains the same, the amount you earn each year increases because of compounding.
2. Seek out the Advice of Professionals
There’s no shame in admitting that you find it difficult to understand investing.
The real shame would be to ignore your blindspots, invest anyway and then lose money because of your lack of knowledge.
To help you avoid such a scenario, you should think about seeking out the help of experts.
Now, there are many investment firms out there that are vying for your business. Unfortunately, not all of them are reliable, and so you’ll need to do a lot of due diligence before you decide to work with anyone.
A great way to tell the good investment firms from the bad is by taking a look at their website.
In doing so, you can identify what accreditations they have and whether they’re registered with the proper authorities. If you go to the website of carter insurance & investments and then scroll to the bottom, you’ll see an example of this.
3. Start as Soon as You Can
As mentioned earlier, the size of your return can increase over time, thanks to the power of compounding. Because of this, it’s vital you start as soon as you can.
Now, that doesn’t mean you need to risk your savings. But, it does mean you should think about setting up a system that makes it easy for you to invest your money.
For example, you might want to make it so that every time you get a paycheck, $50 is automatically added to your investment account. By setting this up, you can ensure your investment account grows in size, without much effort on your part.
Do You Know How to Create a Personal Investment Plan?
You should now understand how to create a personal investment plan that’ll bolster your finances.
Investing can be tricky, and there’s always the risk of making a loss. But if you enlist the help of experts, you should be able to minimize the odds of a negative outcome.
The most important thing is that you start now. After all, the sooner you take action, the sooner it’ll be that you have a sizeable investment account.
If you can figure out how to cut costs, you may be able to put more money into your savings account. Read this post for some tips on how you lower your expenses.
