Four Tips for Retiring Wealthy
When it comes to creating an investment strategy, there are many things to consider. Getting back to the basics, there are four points that everyone must accomplish to get the biggest bang for their buck.
1. Reduce Credit Card Debt
While many might not consider reducing credit card debt as an investment strategy, it clearly is., the reason being that you are paying a very high interest rate on that debt. It is not easy to generate massive returns in the stock market, so if one’s credit card interest payment were 20%, one would need to generate a bigger return than that in the stock market to justify not paying off that debt.
Reducing or eliminating unnecessary credit card debt is an easy initial step to getting a better return from a long-term investing plan.
2. Pay Down Excess Bills
Long-term investing is all about opportunity cost. You have $1,000, and there are many choices you can make with that money. These days, many large purchases can be bought through payment plans. This can be dangerous, because they will hurt your investment strategy as the monthly bills start to increase substantially.
Pretty soon, you’ll find that there are no excess funds to place into any long-term investing plan because of unnecessary bills. In reality, you do not need as much stuff as you want.
Reduce the excess material goods, and focus on your investment strategy.
3. Keep Track of Your Income Statement
Everyone has an income statement. Keeping track of how much money you earn and how much money you spend is crucial for a successful long-term investing plan. Once you’re able to determine where your money goes, you can do two things: 1) eliminate unnecessary items; and 2) focus on building your investment strategy.
4. Start Investing
Many people believe they do not have enough funds to begin long-term investing. The key to a successful investment strategy is to start early.
Start by eliminating small items you don’t need and placing those funds into an investment strategy that suits your risk profile.
A long-term investing plan only works over an extended period of time. You cannot count on winning the lottery or finding that miracle stock that will go up 10,000%.
Realistically, wealth is built through a slow accumulation of assets within a solid investment strategy.