Smart Thinking On Investing – July 14
Mary Beth of Workable Wealth opens up Smart Thinking this week with a look at how much money you need for retirement. Money Ning author, David Ning explains why index funds are your best friends. And Budgets Are Sexy asks if it’s possible to achieve socially responsible investing.
Michelle Schroeder-Gardner of Making Sense of Cents helps us discern between our wants and needs. And Afford Anything author, Paula Pant, examines whether we should be earning more or saving more…
Figure out Your Retirement Needs
- Though it seems like a long way away, compound interest works best in your favor over a long period of time—so it’s important to determine your retirement needs asap
- It will depend on the lifestyle you foresee in your golden years; the type of household you’ll be supporting, whether you wish to travel or not, and what you’ll be doing with your time
- Draft out a retirement budget based on these foreseeable needs, and work with a financial planner to get the ball rolling on growing your nest egg now
Index Funds Are the Answer
- Stock picking is a difficult strategy for even the most experienced of investors to navigate successfully
- The volatility alone is more than many investors’ risk tolerance levels can cope with—index funds are much less volatile in comparison
- Index funds provide a more dependable way to gain returns by investing across the total market in all industries; expanding our diversification and minimizing our overall risk
- Many people are interested in making the most of their money to leave the earth a better place for the generations that will follow them
- Socially responsible investing (SRI) is an approach which allows investors to buy shares or other investments that are committed to improving environmental, social justice, and corporate governance factors
- Remember to do your homework and align your money with a fund that reflects your values and beliefs, it may take some digging around to find the right one
Do you invest in socially responsible shares? Share your experiences in the section below
Differentiate between Wants and Needs
- Not knowing the difference between what you need and what you want can be the major step to overcome in truly managing and saving your money better
- Try not to confuse the two, begin by learning to be happy with what you have and don’t let your needs escalate out of hand and become wants by spending more on them than you should
- Evaluate each purchase you are thinking of and ensure it’s absolutely necessary to spend the money by making yourself wait before you buy
“Earn More” or “Save More”? Do Both
- Those with an “earn more” mindset believe a higher income is the solution to financial freedom, while “save more” people think that being frugal is
- Both, though, work to increase the gap between pushing what you earn higher and decreasing what you spend
- The result of this gap should be the focus of your concentration; attack both at the same time so that whatever you achieve from it can be invested and also working hard for you
Do you want to start investing on your own, but don’t know how?
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. Andrew Stotz doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Smart Thinking On Investing and cannot guarantee the accuracy of its information.