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Introduction to the Importance of Investing and Saving:I thought writing about the importance of investing would be a good idea for one of my first general opinion posts because of how crucial financial freedom is to the lifestyle of a conservative.
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Most mainstream conservatives pride themselves on being against welfare policy, and not accepting welfare handouts. However, that lifestyle is only possible if one has sufficient savings. Investing helps build savings and improve one’s financial well-being. In this post, I will discuss the importance of investing, how to learn about investing, how to invest successfully, and how to build a lifestyle around saving and investing.
How to Learn about Investing:
To the uninformed observer that doesn’t know the importance of investing, investing in the stock market might seem risky at best and a complete scam at worst. However, a little bit of knowledge about the markets and stocks in them goes a long way. I have found that the best way to learn is through reading.
Not reading flashy, modern books about getting rich quick schemes. Instead, read well-regarded books about understanding the fundamentals of investing and what investing strategies are doable for the average investor.
I recommend three books to any beginner- One Up on Wall Street by Peter Lynch, Security Analysis by Benjamin Graham, and Winning the Loser’s Game by Charles Ellis. Those three books are extremely useful and give a background on how markets work, what to look for when choosing stocks or bonds, and how to build a lifestyle around financially helpful habits.
Also, all three are written by people who knew how to turn their ideas into success, so they are reputable. Additionally, reading sources like RealClearMarkets and the Wall Street Journal is a great way to stay informed. Reading through those books and news sources should help you gain the base of knowledge you need to invest successfully in whatever asset classes you decide work best for you.
Learning the importance of investing is crucial because it will help you become economically independent and not rely on government money, such as Social Security, that could never come. That program is likely to fail. Buy those books by clicking on the titles and getting them on Amazon, and then read them. They will help you financially because you will learn how to invest.
From: https://www2.lincolninvestment.com/omni/importance-of-investing-early.cfm Investing Successfully:I am not a stock-picking expert. I will be the first to admit that I am still somewhat a novice. However, I do have two pieces of advice about investing successfully.
The first is to avoid fees like the plague. That applies to both funds and brokerages. There are plenty of low-cost ETFs that you can choose to have a diversified portfolio. Vanguard makes some excellent ones for stocks, bonds, and real-estate that can fit any mindset or need. Research a few low-cost ETFs and then choose the ones that meet your requirements for fundamentals and risk. The low-costs will keep your returns higher.
Also, avoid brokerage costs. If you go with an otherwise great site like Fidelity, you will be paying $5 for every trade. That will destroy your returns. For that reason, I prefer M1 Finance. It is a great way to stay invested and is free.
The second piece of advice is to stay invested. It would be great to time the market and miss every bear market and be invested in every bull market. But no one can do that successfully, and missing the good days is worse than missing the bad days. Once you learn the importance of investing, stay in the markets and keep investing to boost your returns.
Selling when you don’t need to is a bad decision that will hurt your long term returns. The importance of investing is partially related to doing so from an early date, as you can read about in The Automatic Millionaire. Investing from a young age and staying invested for as long as possible is the key to long term success in the stock market. Stay invested. It matters.
How to Build a Lifestyle Around Investing:It is hard to save money. It is harder to invest money because that can lead to short-term losses (but long term gains). For that reason, the best thing to do is to automate your investments.
First, pay down debt. Debt is like a cancer that will eat into your financial and emotional well-being. Avoid it or pay it down if you have it. Credit card debt, an overly large mortgage, student loan debt, and any other form of debt that you have is dangerous and expensive. You need to start paying it down and get rid of it so that it does not eat into your finances in a dangerous manner.
Then make a budget for each month and figure out a way to set aside at least 15% of your income for investing. Make that portion of your income work for you by paying you dividends or interest. That will help you earn more while you sleep. I prefer investing in stocks to make that income, namely quality dividend stocks, but you can invest in stocks, bonds, real estate, or other alternative investments (stocks often have the best returns though).
The key is to automate investing through your bank and brokerage so that you don’t even think about it. Many banks and brokerages, such as M1 Finance, let you do so easily and without a struggle. You won’t have to have discipline or remember to do it each month. You don’t even need to remember the importance of investing. You can just set up automatic transfers and investments that will help you build wealth without even thinking about it. Doing so will make investing much easier and reduce the risk of you deciding not to invest.
After you learn the importance of investing, finding a way to save and invest enough is crucial. I think the ways I described above are the best, but if you have a way that works better for you, then do that. Just saving and investing early is what really matters and will lead to the best overall returns. Also, investing in high-performing assets, especially when you’re young and more or less immune to having to worry about short-term returns, is an important aspect of investing.
Conclusion:Investing is hard. Not being financially free is harder. Read the books I recommended to find a low-cost way to begin investing. After you do so, stay invested. It will make your future much brighter and less stressful. The importance of investing early cannot be understated and is a key to your long-term happiness.
If you do it, you will be forever grateful and less stressed. That’s the value of being a young conservative that already understands why investing from a young age is important because it means you are fiscally responsible and not potentially dependent on the government for your livelihood after you retire.
If you don’t learn the importance of investing early and the general importance of investing and saving money, then you will be reliant on government money and far more stressed than your peers that learned how to save and invest. Saving and investing are what allow people to build wealth and become self-sufficient, fiscally responsible adults. That’s the importance of investing and what you should keep in mind as you start to learn the importance of investing. Good luck and remember to stay invested!
