As I look back on my life of saving and investing for retirement, being a homeowner, and a small business owner, I am incredibly grateful. I get to work with fun, talented, talented, and cheerful people. I also get paid to work from home and think deeply about the global economy.
And I've learned a little something from every job I've had, every book and blog I've read, and every financial experience I've had along the way. Here I share some of the best investment advice I've received throughout my career in the personal finance industry and my life as an everyday investor.
1. “Don’t try to pick stocks.”
One of my first jobs early in my career was providing financial benefits to employees. We held a free annual meeting with financial advisors. This was a great opportunity to get some professional help with your 401(k) and IRA, see how you're investing, and discuss your retirement plans. (This is a really useful perk and more companies should do this!)
I was still in my early 20s at the time, so retirement was still a long way off. But something my financial advisor said has stuck with me all these years. “You make the most money at work, not by picking stocks.”
that's right. My financial advisor didn't tell me to buy individual stocks or “meme coins” (which thankfully didn't exist back then). He said he will simply continue investing in the broad stock market through the S&P 500 index and other diversified index funds.
Most people who are not professional investors, but have other valuable career skills, Focus on your actual career and make more money instead of day trading or stock picking. Instead of trying to beat the stock market, trying to outdo the millions of other investors who have more money and time than you, most people invest that effort into their own careers. You should. Try to get a raise or promotion. Learn new skills and earn new certifications. Start a side hustle to earn extra income.
2. “Your income will increase”
When my wife and I bought our first home in our late 20s, we were over the moon. We really liked the house. It was in the perfect neighborhood and had so much character and character that made it better than other homes we toured. However, this was not a “starting point” for us. Financially, it was a little difficult. In the end, my mortgage payment was $400 more than I paid to rent the apartment.
Sometimes it happens. It's not always possible to purchase a home that fits your initial budget. But even though we loved the house, had good credit, and weren't taking too much risk on our monthly budget, we wondered, “Can we really afford this house?” I was there. But the real estate agent said something reassuring that I will always remember. “You are young and have upward mobility, so your income will increase.''
After all, we lived in that house for 17 years, raised two babies there, and never missed a mortgage payment. Not everyone has the good experience of buying a home in a time of high prices and housing shortages. We are incredibly lucky to live in an area where housing costs are lower than many large cities in the United States.
Our realtor was right! We continued to earn more money over the years, making it easier to take on debt than when we were younger and relatively “house poor.” Debt can be a good thing. You can live a better life without a mortgage, car loan, or credit card bill. And over time, with more years of service, most people will be able to pay off their debts.
3. “Keep buying”
When it comes to investing in the stock market, questions like “When is the best time to buy stocks?” are often asked. or “How much should I invest in stocks?” These questions are misguided. In fact, research shows that even when the stock market is at an all-time high, even when stocks feel “overvalued,” Most long-term investors should continue to buy.
There is a wonderful book with exactly this title (Please continue to buy) by financial blogger Nick Majuli, COO of Ritholtz Wealth Management. This is one of the best investment books I've ever read. Because it shows exactly (based on data analysis and past investment performance) why “timing the market” doesn't work.
When you buy a stock, it is true that the price will fall and you may incur a loss. But if you don't buy stocks in a way that's appropriate for your long-term investment goals, you could miss out on profits and lose even more money.
Instead of worrying about “when” to invest, invest in a diversified portfolio of ETFs every month and year after year. Grow your money over a long period of time without trying to time the market or worrying about the highs and lows of stock prices.
For great insights on how to invest, check out Nick Maggiulli's blog at ofdollarsanddata.com.
conclusion
These three pieces of investment advice may sound simple, but many people need to hear them. Investing is a complex, long-term commitment. Most day traders lose money, and most individual stocks don't beat the market. But if you're lucky, you'll be able to increase your income and investment portfolio through your job.
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