If you want to put yourself on the path to wealth, being a diligent and disciplined saver is a critical first step... But it alone isn't enough. You must learn to be an investor.
Think about this...
Imagine you work hard and aggressively set aside 20% of your earnings in cash for 30 years. After that Herculean effort, you've saved up... six years of income.
Not too impressive. Twenty percent is a high savings rate. But it won't do squat to set you up for retirement if it sits in cash.
If you don't invest the money, it's barely worth saving at all.
Why do you need to invest? Because real freedom comes from income. And income comes from invested savings.
In his book Money: Master the Game, Tony Robbins gives a great description of the goal of saving and investing this way:
The core concept of successful investing is simple: Grow your savings to a point at which the interest from your investments will generate enough income to support your lifestyle without having to work. Eventually you reach a "tipping point" at which your savings will hit a critical mass. This simply means that you don't have to work anymore – unless you choose to – because the interest and growth being generated by your account give you the income you need for your life. This is the pinnacle we are climbing toward.
Remember, saving and investing are about having the freedom to do what you'd like to do.
To reach Robbins' "tipping point" and the income that comes from it, you have to invest.
"Investing" takes a lot of forms. Newsletter readers immediately associate the term with buying and selling stocks. And that is one common and effective form of investing. But the term applies to any activity that uses capital to create more capital...
If you own a small business, you can invest in advertising. Investing in education can build your skills and boost your income. Even investing time in learning on your own can help you get ahead.
Your car or a good set of boots aren't investments, though people like to use the term. Owning a home is an investment, but a particularly illiquid one.
But for many folks, the primary means of investment is through public markets – stocks and stock funds.
Lots of people let a variety of hurdles prevent them from being successful investors: the jargon, the account types, the fees, and the number of stocks and funds to choose from... It's easy to put off getting your finances in order until next year.
Whereas starting to save is often a problem of priorities, learning to invest is a problem of inaction. You need to overcome that fear and inertia and get invested today.
The fact is, thanks to a shift coming to the stock market, enormous amounts of money will be made by Wall Street and these hedge-fund billionaires in the coming weeks and months.
Too many times, I've heard folks ask the same question: "How do the ultra-wealthy make money during these times?"
But in moments like these, no one ever asks the right question: "How can I do that?"
My question for you is, what are you waiting for?
Obviously, I can't tell you how high stocks will soar. And there's sure to be a few bumps in the road and corrections along the way.
In just-released video, I explain how this shift could make many folks far richer and exactly where I think you should put your money...
If you haven't seen it yet, click here to watch it now.
What We're Reading...
- Here's how much you should be saving.
- Something different: Is this the end of Amazon's drone delivery plans?
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
March 16, 2023