Lately, I’ve been a master procrastinator. Life has been hectic for sure, but I have had a lot of time to get things done… and ended up postponing them. Then I look back to the past few months, and I feel bad because I have done nothing.
Mostly, that has been true in the areas of fitness, and automation. One of my goals is to leave my businesses (the blogs and my little house in Guatemala) as hands off as possible, so I can go travel, or simply do nothing, and not worry about them. It requires some work upfront, such as training my staff so they can perform the tasks that currently take me so much time.
But because each task takes a few minutes, and I would have to train my staff for hours, right now I tend to do it all myself, and remain frustrated.
The same goes with fitness, I sprained my ankle pretty bad a month ago and instead of doing other types of exercise that don’t require ankle strength, I have just been waiting, and now I don’t like the extra pounds around my waist. Making them go away will be much harder than working a little bit every day so they don’t get there in the first place. But it’s too late.
Retirement is the same. It’s not something you want to delay and then look back when you’re 50 and find out you have saved $500.
And just like my terrible first world problems, it just requires a tiny little effort on your side right now, to set you up for a good financial future.
How to get started with investing
Investing is a big word, but when you look into it a little bit, it isn’t that scary. If you know nothing about the markets, and where to start, I’d recommend you simply stick to index funds. They track a wide variety of stocks, limiting your exposure to just one stock.
The S&P500 for example is indexing the 500 biggest US companies, so instead of buying one share of one company, you are instantly invested in oil and gas, food, transportation and much more.
The best online brokerage accounts are the ones who offer low fees, and low initial amounts to get started. Why? Because fees will cripple your nest egg, even if they are “only” $5 here and there, over the long term, it amounts to thousands of dollars.
For example, Motif Investing has no minimum amount to start investing. Instead of putting all your savings there, and regretting not having any liquidity (or worse, charging your credit card!) when the next emergency arise, I would suggest you set up a monthly automatic transfer, like $50 or $100, and see how it goes.
If it feels too tight, you can adjust down the next month. If it doesn’t hurt, try sending a little more. This is money earmarked for retirement. Yes, you can use it ten years from now to pool together a down payment for a house, but you should consider it gone for all short term purposes, like a holiday or a car replacement.
With an index such as the S&P500, you can expect returns OVER THE LONG TERM of 8-9%, based on the past 30 years. This is not a guarantee of future returns, and you have to stay calm when the markets do down, which they will at some point.
But if you are young, time is on your side and the markets will recover. Saving $100 per month at 8% for 35 years will put $232,392 in your nest egg for retirement. Not too bad considering we’re just talking about $3 a day.
If you start at 50, with only 15 more years to invest, investing $500 a month will not only hurt much more, you will only have $174,575 for retirement.
Don’t procrastinate, or it will cost you dearly. Get started now.