How to start investing? Do I start to invest today,
or should I wait until I have more money?
When is the best time to start investing? Right from your first paycheck? When you have a nest egg started? Sometime in the misty future? And even then, what’s the best way to start investing? How should you start investing? Chances are that you’ve been waiting for just the “right” moment to start investing, but just what makes that moment happen? Trying to figure out whether it makes sense to start investing today or wait until you have more money – we’re here to help you out.
Use time to fullest advantage
The short answer is invest today, not tomorrow. Because even if you just start investing a little bit, that amount will have that much longer to take advantage of the power of compounding.
Think of it this way –you’re already a financial trader. Maybe you don’t see it that way, but if you work for a living, you’re trading your time for money. That’s probably the worst trade you can make. Why? Because there’s always more money, but you can never get more time.
Create a money machine
The basis for creating what we call a money machine – the money that will end up giving you an income for life – is setting aside a set percentage of your paycheck to pay yourself first. Maybe that’s 10% or 15%. Maybe 3% or 5%. But decide what portion of your paycheck you’ll pay yourself now. This is really how to start investing in the future you deserve. Remember, this amount’s off the top, before anything else. Your other expenses, such as housing costs, utility bills and restaurants will come next.
The trick is then to put this money somewhere it will begin to work for you. “Under your mattress” doesn’t have very good interest rates. But put this set percentage of your earnings into savings no matter what happens and you’re going to slowly start building your financial future. Even if it seems like you’ve already accounted for every penny already, you can start saving right now. It’s the best way to start investing.
How to start investing? Save automatically
The best way to set your money machine in motion is to automate your savings. Yeah, you’ve probably heard this before, huh? But it’s true – the key to savings success is by not seeing that money in the first place. You’ll always spend what you have, and reducing that just a little more – trust us, it’ll pay off. It doesn’t matter if you’re living paycheck to paycheck or earn six figures — save now and you’ll be able to reap the rewards later. You’ll be building a money machine that makes money when you sleep, when you eat, and when you eventually stop working.
Here’s how you can start investing and saving automatically:
- Pick the percentage of your income you’re going to set aside automatically. There’s no right answer here, so trust your instincts about what feels right: 10%? 12%? 15%? 20%? 50%? It’s entirely up to you.
- If you’re already enrolled in a retirement account through your job, get HR to start putting your new percentage directly into that account. If you’ve already got automatic deductions, you can increase them to the amount you’ve chosen.
- Self-employed, own your own business, or contractor? You can set up a retirement account with a bank or financial institution. Then just set up an automatic transfer from your checking account.
And say you get a raise or other influx of cash – you can stick that into your money machine directly, spread it among your three asset allocation buckets or increase your ongoing savings percentage to match.
Don’t wait to invest – you’ll never get that time back. But remember, not all investments are created equal. Learn more about the power of compounding and building a smart financial blueprint to get your future under your control.
WHO SAVED MORE?
Let’s use this investment strategy example from financial expert Burton Malkiel – he created the idea of index funds:
Take two brothers, we’ll call them William and James. Both are 65 years old. Based on the information below, which brother has more money in his account at the age of retirement? William, who invested for 20 years, or James, who invested for 25? Click below for the answer.
Ready to invest in your financial future?
Get all the details on saving and investing in Tony Robbins’ Unshakeable: Your Financial Freedom Playbook, the bestseller that covers what you need to master your personal finances today, not tomorrow.
Legal Disclosure: Tony Robbins is a board member and Chief of Investor Psychology at Creative Planning, Inc., an SEC Registered Investment Advisor (RIA) with wealth managers serving all 50 states. Mr. Robbins receives compensation for serving in this capacity and based on increased business derived by Creative Planning from his services.