Financial freedom is almost always a result of making positive short-term decisions that force long-term results. It is not occasional behaviors that will get you to your financial goals, it is everyday behaviors. It is all about making a plan and finding ways to implement the plan. We have to take into account our propensity toward short-term thinking, and put in a solid plan that forces us toward long-term success.
Sometimes people need a complete overhaul in how they save and invest their money. Looking for a quick route to wealth may work out for very few people, but if you want a solid plan with a comfortable risk level, then long-term saving and investing just make sense.
First Steps to Investing
Investing can seem overwhelming to the inexperienced. You may know, but still, be unsure how to start. An experienced firm can help you get started. Investing is about using time-tested techniques to your advantage.
For example, most people have never heard the term, “constant dollar plan,” otherwise known as, “dollar-cost averaging.” In simple terms, this is an investment strategy that gives amateur investors a route to lower-risk investing. Dollar-cost averaging means you buy more of a particular investment product when the price is low, less when it is high, but you keep accumulating, and the cost averages out over time.* This strategy is popular for new long-term investors because it provides some protection from sometimes volatile market changes.
Financial discipline can be challenging for a variety of reasons. When you remove the excuses and stick to a reasonable plan, you can reach your goals without too much pain. Admitting that you don’t always have the discipline to do the right thing for your future is not an admission of failure, and it is the reality many people have to deal with. It is better to admit it and set up a system that deals with the reality than not facing it and living a future of financial instability.
One of the greatest gifts technology has brought us is the expanded use of automatic savings and investment plans. Saving money can often feel like yet another pull on a tight budget, and it can be the first thing tossed aside when times are tight. When money is automatically deducted from your bank account, you will tend to absorb the loss and quickly adapt to the new reality. Meanwhile, your deducted savings and investment funds work quietly to achieve financial freedom.
You control when and how much of your money is deducted. You can opt for weekly, bi-weekly, or monthly withdrawals to a savings account, investment account, or both. Your investment firm can show you appropriate index or mutual funds to get you started, and they can show you how to diversify overtime to protect your investments.
Knowledge about money is a great thing, but without action, you can’t expect good results. American entrepreneur Jim Rohn once said, “Success is steady progress toward one’s personal goals.” You can find financial freedom in the long run by instilling habits that are immune to the economy, your mood, and the influence of people around you. Make a plan, set up a strategy for success, and change your financial direction once and for all.