Accumulating enough wealth to have a comfortable after-retirement life is the ultimate goal of almost every person, yet only a few are able to achieve it. Different people have varying definitions of wealth, but all of it, at the end of the day, comes down to having big bucks in the bank account. You will find countless ways, life hacks, tips & tricks, and eBooks over the internet detailing complicated ways to build wealth. But what is the single, most simple way that any person can use to have a secure financial future?
The answer is: Investment. Yes, you read it right. It is the best way to build wealth over time, and if you want financial freedom in the next 20 years from now, you should start investing now.
Why People Don’t Invest?
There are several reasons that people give when they are asked this question. Some say that they don’t have any idea from where and how to start, while others think that they don’t have enough money to make investments. Then there are those who are skeptical because of the economic position of the country and its impact on the market.
Just like these, there are a lot of other reasons that hold people back from investing and building wealth over time. However, people can easily overcome these difficulties if they are willing to learn about the facts and benefits of investing, gulp down their fear, and start small.
You Think you don’t have Enough Money? Well, Think Again
The most common reason why people don’t invest is that they think don’t have enough money to start investing. Nowadays, people have so many options at their disposal that there is always an opportunity to invest. Even if you save as little as $30 or $50 a month, you have enough money invest.
Online Brokerage Account: You can start by opening an online brokerage account, for which you don’t even need to have a single dollar. These brokerages have automatic plans through which you can start investing with $50 or even less a month. They use your money to buy fractional shares of an index ETF or index fund. For example, if you put $50 a month, and a share worth $30 is being sold, you will become the owner of 1.67 shares of the index fund. Every month, the number of shares will keep on increasing, along with your wealth.
Funds that Pay Dividends: Another good option is to invest in dividend-based funds. They allow you to reinvest from time to time, making your investment portfolio stronger over time. It is a great of building your fortunes steadily and gradually. Your ability to invest increases as you put your money in these funds.
Invest More as your Finances Improve
Of course, these are small investments and they will take decades to accumulate enough wealth to support your entire retirement. You need to move up your game from $50 or $100 to something bigger. With time, your financial position will improve, giving you the ability to invest more. Every time you notice an increase in your wealth, make sure that you set aside more money to invest.