Recently, I’ve been procrastinating a lot. Even though my life has been busy, I’ve had plenty of time to get things done, but I ended up postponing everything. Looking back at the past few months, I feel guilty because I haven’t accomplished much.
This has been especially true for my fitness and business automation goals. I want my businesses, like my blogs and my small house in Guatemala, to run smoothly without my constant involvement. This way, I can travel or relax without worrying about them. Achieving this requires some upfront work, like training my staff to handle tasks that currently consume a lot of my time.
However, since each task takes just a few minutes, but training my staff would take hours, I end up doing everything myself and feeling frustrated.
The same pattern applies to my fitness routine. I sprained my ankle badly a month ago, and instead of engaging in exercises that don’t strain my ankle, I’ve just been waiting around. Now, I’m unhappy with the extra weight I’ve gained. Losing it will be much harder than maintaining a daily exercise routine to prevent gaining it in the first place. But now, it’s too late.
Retirement savings work similarly. You don’t want to realize at age 50 that you’ve only saved $500. Like handling my other issues, setting yourself up for a secure financial future takes just a small effort right now.
How to Get Started with Investing
Investing might seem overwhelming at first, but it becomes less intimidating once you understand it a bit. If you’re new to the markets, I suggest starting with index funds. They cover a broad range of stocks, reducing the risk of investing in a single stock.
For example, the S&P 500 index includes the 500 largest companies in the US, so by investing in it, you’re diversifying into sectors like oil, gas, food, and transportation, among others.
The best online brokerage accounts offer low fees and minimal initial investment requirements. Fees, even small ones like $5, can significantly reduce your savings over time.
Take Motif Investing as an example; it doesn’t require a minimum amount to start investing. Instead of putting all your savings into one place and then regretting the lack of liquidity (or worse, resorting to credit cards) when an emergency arises, consider setting up a monthly automatic transfer, like $50 or $100, and see how it goes.
If $100 feels too tight, adjust to a lower amount the following month. If it doesn’t stretch your budget, try increasing the amount. This money is earmarked for retirement, and while you might use it for a down payment on a house in ten years, don’t count on it for short-term needs like vacations or car replacements.
Historically, the S&P 500 has provided long-term returns of 8-9% over the past 30 years. Although this isn’t a guarantee for future returns, it shows the potential. You must stay calm during market downturns, which will happen at some point.
However, if you’re young, time is on your side, and the markets will recover. Investing $100 per month at an 8% return for 35 years can grow to $232,392 for your retirement. Not bad for just $3 a day.
If you start investing at age 50, with only 15 years to grow your money, investing $500 a month will feel more burdensome and will accumulate to only $174,575 for your retirement.
Don’t procrastinate; it will cost you significantly. Start investing now.