When was the last time you bought an asset? Something you knew with time will make money for you.
Next time you are going to buy something ask yourself, Do i Need it ? or do i want it?
Big difference.
You NEED groceries at the supermarket. You WANT the new phone or an extra pair of shoes.
Start acquiring assets, not liabilities. That is a very powerful and deep statement.
What is an asset? Something that you buy and will make money for you in the future.
What is a liability? Something that you buy and will not make you money in the future.
What do you think would happen if you lost your job tomorrow? Scary thought right?
Start by saving an emergency fund to cover 6 month worth of your expenses.
There are 3 types of assets;
1-Properties
2-Businesses
3-Stocks/Bonds
Options 1-2 limit you due to the price point of entry, you require a large sum of money to buy into or start, however option 3 is widely available and at a reasonable entry price point.
But I don't have thousands of dollars to invest and I don't know where.
Where do you start ? There are options to invest with as little as $25.00 in an S&P500 index fund like FXAIX (Fidelity). You can also save $3000.00 and invest in VTSAX (Vanguard).
Just visit their websites and familiarize yourself with it.
Remember this is money you do not plan to use in 5 years, once invested you should forget about that money, if you play into the game of market timing (buying and selling) you will most likely lose.
When you buy an S&P 500 index fund, you own a piece of the largest 500 companies listed. Historically you will outperform most of the most seasoned money managers out there.
I would caution you not to individually stock pick because your uncle told you of a hot pick, you are most likely to lose your money.
Next time instead of buying the new phone, get a few shares of an S&P 500 index fund. you will thank me in 5 years.
Till next time,
JL
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, and it should not be treated as such.