What if I told you you can invest a small amount of money consistently and you will never be poor? Some might jump on this and say show me. Others might get triggered and try to argue because of the word “never”. Yet some hopefully can learn a little something. I’ll show you how Small Investing = Never Being Poor.
Small Investing = Never Being Poor
Could it be so simple of a solution that 99% of people won’t do it? The reality is you can become a millionaire by investing small amounts of money + enough time. All of this comes down to compounding interest. That magical yet powerful force few understand and even less use to their advantage.
So at age 20, you invest $100, and every month until 65 you put in $50. How much would you have?
You would have almost a quarter of a million dollars. That is more than most Americans have at that age. On top of that this is only $50 assuming you never increase that investment.
The best place to start small investing is M1 Finance.
Money Mindset And Fear
Our mindset and the stories we tell ourselves have the biggest impact on our finances. This is because your mindset and the stories you tell yourself about money become your beliefs, your beliefs become your actions, your actions determine your life results.
So you can see just how important it is that we have the right mindset and story about money and finances in general. I hear people say “I don’t have enough money to invest”, “I don’t have $5,000 to open an investing fund”, “You are doing so well because you have a lot of money”, and the list goes on. None of these stories are true these stories keep these people from getting better with their money and building a money legacy for their families.
The truth is you can invest $10 at a time to start building that wealth stash. $10 seems like nothing yet $10 invested is better than nothing. I showed above how $100 a month can turn into almost a quarter-million dollars. You see the earlier you start the better off you will be even at $10 a month. That is because time is the biggest factor in building wealth.
Fear should not be allowed to control your money decisions. Don’t be too scared to invest in the stock market. Statistically, the market has a positive return 75% of the time each year. Even if it goes down you should keep investing and don’t sell. This is because you are investing for the long haul. So many people sell and lose money because they get scared.
Don’t let others’ fears guide you. Follow up with some self-education in the statistics of the market. This way you will see just how much more likely it is that your money will grow the longer you keep investing.
The math above also assumes you have no match in say a 401K at work. While not every employer has a match in their 401K I would say many do. So make sure to check with your HR department and see the details on this. If it does this is a “Hell Yes” for you and a huge win. This means you will get free money and your wealth will grow even faster.
Talk about free money, I love using BlockFI to earn 8% on my cash!
If the HR department tells you they have no match on the 401K. Well, that is ok because you know that you can still control your money and finances. You are prepared and dangerous enough to still accomplish the mission of reaching Financial Independence. At this point, what could hold you back?
Small Investing = Never Being Poor Works Unless You Get In The Way
That’s right you are your worse enemy. The only thing that can stop your goal is the person in the mirror. If you consistently make poor choices with your money you will dig yourself into a hole. Dig that hole deep enough and it gets more and more challenging to get out. That analogy is hard for some to admit but it’s true.
Instead of spending $50 to make yourself “feel better”, invest that $50 and watch it grow. Stop buying clothes you don’t need. Wear the ones you have in the closet. Need something? If you really need it, try to buy it used. The difference between the new item and the used item should be invested.
This is how “Small Investing = Never Being Poor” works. It starts to take on a life of its own. Compounding starts to work and then the ride gets wild!
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