People have invested their money for growth for almost as long as there have been people and money. With all of this experience one thing has been learned for certain: long term investing is the only method of successful investing that has been proven to be successful consistently. Further, using a long term investing strategy not only gives your money the time to grow, but that time can also be used to make up for mistakes and misjudgments in your actions.
The good news in this is that with these three simple steps you can get started on a reliable investing strategy that will keep you on the straight and narrow for many years to come.
Make an Investing Plan
Resist the temptation to jump into the investing game in both feet right away. This often comes about when inexperienced investors are confronted with a salesperson from one of the investment firms, especially making lots of tall promises. Instead, create a solid plan that plainly states where you are and where you want to be at a given time in the future.
This plan will consist of how much money you currently spend, where you spend it, and how much you save and invest. Next, try to project all of these variables in the future. What do you want your financial picture to look like in the future? There are numerous financial calculators available online that can be used for this purpose.
Get Familiar With the Tools of Investing
At this step you will want to learn about the tools you will be using to reach the goals you have decided on. That’s no little job, to be sure, but it’s also not impossible either. Different investing techniques have different performance histories that can often be relied upon to predict results. This is not to say that there aren’t some times when things go otherwise. They do. Generally speaking, however, performance figures don’t lie.
How to Invest for Long Term Growth
At some point you will have to begin investing. Don’t even wait until you think you know everything there is to know. That’s not realistic, but when you think you have a good grasp of the concepts involved in investing, give it a try. You will soon learn that the more often you invest the more you will find out that you know.
If you think you have even a small amount of money to invest in your long-term goals, do it. A good start might be an ETF or a mutual fund. These can be started for as little as $50.
It’s usually not a good idea to invest in more volatile investment strategies, especially at the start. Not only can these investments be bad choices, but you can lose your money almost overnight, which is disheartening to anyone, much less a beginner. Instead, begin by opening an automatic investment account with a discount broker. As the name implies, your bank will send a predetermined amount to the broker, who in turn invests it for you.
At some point, whether it will be a calendar goal or a balance, you will probably want to diversify your investments. Regardless of how much you have and how much you earn, take your investing slowly but surely, which is the only proven investment strategy.