Here’s What You Need to Do to Attain Financial Independence as an Investor
Across media outlets, investing has long been touted as being an incredible way for individuals to grow their wealth and set themselves up for life with at least a $1 million retirement savings goal. Most experts advise that having such sums of money as a retirement package is the ideal way for people to live into their sunset years.
According to Nick Holeman, a certified financial planner at Betterment, many people tend to overlook one particular critical component of investing. Through his years in the finance sector, he mentions that he’s come to learn that it’s quite important for individuals to keep in mind that investment is not a means to an end. He believes that investments can’t do everything.
Speaking to the media, he shared that historically, investing in the stock market has been seen as the best way for individuals to build wealth. However, he notes that what most people fail to realize is that it’s not just about picking the right investments. Instead, people need to learn how to save sufficient funds while they are making investments in order to sustain themselves in the long run.
Holeman believes that people who want their money to work for them need to place emphasis on funding those particular accounts. Ideally, this means that individuals need to start as early as they can and keep making regular contributions. While the onus is on individuals to pick the right investments, they should never forget to keep saving all through.
His school of thought is that investments can only garner returns when there are sufficient funds to begin with. Holeman shared that while investments themselves are incredible, one must never forget to keep doing the work and save. He mentioned that a 10 percent return on a dollar is still only 10 cents.
Holeman believes that people can make things easier for themselves by automating some investments and having specific figures transferred over on a monthly basis. The logic here is that if one can’t see the money, then, they are less likely to fall into the temptation of spending it.
Experts recommend that prior to making investment decisions, people need to be smart about how they do their homework. Reading up some handy tips on diversification and the best way to pick a good account matching up one’s lifestyle can be quite helpful. Alternatively, one can opt to collaborate with a financial professional (fiduciary) to come up with great investment plans that make sense to one’s particular situation.
During the initial stages of saving, one needs to ensure that their monies are stashed somewhere safe. This means that the funds can easily be accessed for unforeseen expenses. Online savings accounts are ideal because they allow about 1% interest in earnings annually, without having to keep up with inflation. Typically, inflation tends to run around 2%-3% per annum. Notably, even with the diminutive 1% earnings, individuals still have to pay taxes.
Still, anything is better than earning 0% all through. There are far worse situations like not having savings and getting into credit card debt. Individuals who find themselves in credit card debt usually accrue 10%-30% interest per year.
More inFinancial Advisor
Business Ideas You Can Work on While Keeping a Full-Time Job
While being a successful entrepreneur definitely requires one to put in hard work and long hours, a person can still dabble...May 2, 2023
Shocking Facts About the Bugatti Divo
Almost all car enthusiasts have one thing in common: They are eager to know everything and anything about cars. More often...April 25, 2023
Throwback: When Vin Diesel’s Fast & Furious Car Was up for Sale!
In 2022, gearheads and avid fans of the “Fast & Furious” film franchise rejoiced. This is because the 1968 Dodge Charger,...April 25, 2023
Full Coverage Auto Insurance: Everything You Ought to Know
Cars are expensive investments that require protection. That is why car owners need full coverage auto insurance. And it is the...April 24, 2023
Investing Your Emergency Funds For Liquidity
Liquidity is the most important thing to remember when investing your emergency funds. It is essential to make sure that you...April 13, 2023
Why You Should Be Your Own Financial Advisor
While having your own financial advisor is generally a wise choice, sometimes, finding the right advisor might be a real challenge....April 10, 2023
The World’s Absolute Best Neighborhoods
Cais do Sodré – Lisbon, Portugal Located in the heart of Lisbon, Cais do Sodré exudes a unique charm that makes...April 8, 2023
Everything You Need to Consider Before Getting a Tesla
Buying a used Tesla can be an exciting and rewarding experience, but it’s important to understand what you’re getting into before...April 8, 2023
Tesla Model X Plaid: Combining Luxury & Performance
The Tesla Model X Plaid is a special edition sports car from the renowned electric vehicle manufacturer, Tesla. The car offers...April 1, 2023