When you are young, it is easy to put off any thoughts about saving because retirement is years away. But then this is not recommended. It is advisable to start saving as early as possible for your retirement instead of waiting until you hit 40 to get serious. The good news is that investing has got you covered.
Government employee Eric Bowie,48 from Kansas City, had a life-changing moment when he was in his 20s. When he used to work as a teacher, a salesman arrived at the school to offer his services to the staff. Eric was blown away when he showed him an illustration of the impact of compound interest on investments.
During that period, Eric was a contributor to a teacher’s pension but had no other retirement plan. He started studying the tables and examining how his money would grow. By the time he stopped teaching, he had in his possession $30,000. He was certain that if he continued contributing, he would have about $700,000 in 30 years. This idea appealed to him. He transferred his savings to the government Thrift Savings Plan as soon as he started working for the government. He now has a six-figure account after his continual contribution for over 17 years. According to Bowie, spending less is a powerful tool.
You Don’t Have to Be a Genius
According to David Schneider, a financial planner, and Schneider Wealth Strategies founder, the key to investing successfully isn’t brilliance in making investment decisions. It is about staying away from mistakes like failing to expand your investments. When Rob Grass, 43, started investing, he made a few mistakes. He went into the whole thing blindly.
After its legalization in Canada, Grass invested in cannabis stocks. He, however, says this was a late move. He then developed an interest in investing in Blackberry. He approached his bank instead of a brokerage house and asked it to buy the stock for him. At the time he wanted to buy, each share was priced at $9.18, but his bank didn’t act right away. It made the purchase when the value for each share had risen to $15. A total stock market index fund is the perfect starting point for new investors.
“ They are normally available in a 401(k), or one can acquire them through a brokerage firm,’’ said Schneider.
The Investing Mindset
According to Jordan Sowhangar, a CFP and wealth advisor at Girard, attitude is key. Individuals should have a financial plan in place before hitting the retirement age. Sowhangar says that the plan will hold you accountable. He advises on seeking the help of a financial advisor.
Daryn Duliba’s first mistake was not investing while he was still a youngster. The reality of retirement hit him when he was in his 40s, and he looked for ways to increase his returns so as to make up for all those lost years. He tried putting his money into cannabis stocks, and it was growing quickly. But the money never lasted. Whatever he gained, he ended up losing because he had no idea what he was doing. His advice is to keep learning.