Investing

Investing is the exact opposite of debt. Instead of paying someone else to use their money, you get paid to let others use yours. This is how you turn your consistent savings habit into a comfortable stockpile you can rely on.

Many who are new or uninterested in the finance world find investing intimidating. Luckily for us, there's many new, simple, and cost-effective ways to invest these days. But the principle with all of them is the same.

Successful investing is about time in the market, not timing the market.

Attempting to "buy low, sell high" is terrible advice when dealing with the public stock market. Don't try to be clever and sell when you think the market is going to go down and buy when you think it's about to go up. Studies have shown that this leads to less wealth, not more. Keeping your money in the market, even through recessions, is the key to making investing work. When the market is down, don't panic, and just keep investing as you were before.

Instead of timing the market, focus on starting as early as you can and invest consistently. Below is table that shows expected investment value at 60 years old when investing $2,000 a year (roughly $170/mo), every year, starting at different ages.

Age

Amount Invested

Investment Value at 60

Return

20

$80,000

$1,290,000

1500%

25

$70,000

$760,000

1000%

30

$60,000

$440,000

650%

35

$50,000

$250,000

400%

40

$40,000

$140,000

250%

45

$30,000

$76,000

150%

50

$20,000

$37,000

90%

55

$10,000

$14,000

40%

Time really is money. A dollar invested at 25 is worth 4x as much as dollar invested at 40. Make your young dollars count! Investing when you're young is easy to put off because we all assume we'll make much more money later in life. But will you be making 4 times as much money? It's possible, but not something I'd bet on. Instead, give you future self a "raise" by investing your very valuable 2018 dollars early and watching them grow.

Now you know the most important parts of investing, starting early and keeping you money in the market. In the deep dive we'll explore what to invest in, recommended tools to get started, and the most common tax-advantaged accounts to making your money grow.