Have you begun to plan for your retirement? You may be thinking “How in the world is that possible with all of my debt and bills?” However, everyone should plan for their retirement. Even if they start late, they should start as soon as possible when the stock market is going good.
Based on dollar cost averaging (discussed in a future article) – buy small amounts regularly. I will not go through the math now, but the principle is quite straightforward – and yes, it works in other currencies too. When you buy regularly, you will buy a larger number of shares when the price is low, and fewer when the price is high, giving you better gains than buying at an average price. And you will have far better gains than buying at the highest price.
You can further improve on this by buying a bit more than your regular amount when prices are low, and trimming your purchases when prices are higher. Just do not stop investing when prices rise, or you may regret you bought too little of a great investment. The biggest advantage of this approach is that it encourages you to save a regular amount and invest it, rather than put off investing until you have more money put aside. I suspect this principle is what inspired folks like Sir John Templeton to launch mutual (investment) fund companies. These funds are ideal for regular investments of small amounts. Although, admittedly, they work even better with large amounts.
If your employer offers a 401k option, then you should sign up and start contributing now. This money is taken from your check prior to taxes being taken out and deposited into your 401k account. Most employers match up to a certain percentage. There is no reason not to participate in this type of plan. The other most popular types of preparation to retire are IRAs. You will need to research deposing on your needs. Or you can take the advice of your IRA custodian and decide which one or how many of different types that you should invest in. IRAs also give you the chance to play with real estate properties as a form of residual and large pay out amounts. You can generate enough income to pay bills, debts, and contribute to retirement plan savings if done right.
Anyone can begin saving and planning for the safety and financial security of their future. Retirement should not be a time of worry, yet so many end up in a situation where they struggle and fight to remain in control. Many end up destitute and in homes later with nothing to look forward to but death. This does not have to be the case. Do what you can now to get ready to enjoy the Golden Years. Take away stress and worry from yourself, your spouse, your children, and your grandchildren. Leave a legacy of fun and wisdom. Save now and you will not have to pay later. You will be able to live the lifestyle that you are accustomed to and the one you aspire too. You will be able to maintain, pay the bills, and even travel and do extras if you want.
The big lesson from all this? Stop telling yourself that you do not have money to save or invest now, and you will invest a large amount in the future when you are earning more. That is like getting some shade from a tree you plant ten years from now. The Power of Compounding is why I am glad I started investing 35 years ago. When Sir John Templeton was asked this same question many years ago, I recall when he paused and reflected (as he often did) and answered “when you have money.” So, whether you decide to wait for a lower price level, invest regularly, start immediately (20 years ago would be better), or wait until you have more money – Happy Investing, and you will be glad you did!
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