This is going to be the foundation of your wealth building journey. Creating a strategy means having a plan and following through with that plan. My favorite way to do this monthly is by zero based budgeting (ZBB). If you are a Wealth Club member, you have access to your own zero based budget template inside your Ultimate FIRE Wealth Planner. You can download it here. This will give you a clearer idea of how much is coming in and where everything is going. And most importantly, how much room you have left to invest with every month.

2. Start with your 401k

This is the easiest place to start investing because usually it’s already set up for you. The only thing that’s required is to pick your investments (which I go over in step #3) And if your employer matches your contributions, then it’s a no brainer to invest within a 401k (or any employer sponsored retirement account). But if you don’t have access to a 401k, no worries, you have a few other options. As long as you have earned income you can open up an IRA [Individual Retirement Account] with most brokers or a regular brokerage account. My favorite brokers are Fidelity and Charles Schwab since they offer low cost index funds and don’t have any minimums to start investing. If you are a member of The Wealth Club, you can sign up for our latest investing challenge to open your Roth IRA and buy/automate investments by watching one of these workshops to get even more guidance.

Click here if you aren't a member but want to learn how to invest.

3. Keep it simple with Index Funds 

Once you’ve completed steps 1 and 2, now comes the important part. Actually buying your investments. Many people mess up by not actually doing this step. It’s not enough to open an investment account and contribute to it. You have to actually buy investments or else your IRA or brokerage account will become a glorified savings account. And the easiest and most lucrative way to invest? Index funds. Studies have shown that index funds outperform 90% of actively managed funds. That means you get to grow your money faster and not have to deal with a money manager who might not have your best interest at heart. Index funds can also be super diverse. I’m talking over 3000 stocks in one fund! That means when you invest in index funds that track the whole stock market, you can be part owner of every publicly traded company in the US. And what’s even more amazing? Discount brokers like Fidelity and Charles Schwabs have made investing super accessible by giving us the ability to start investing in index funds for as little as $1. Take advantage of investing now because history shows that the stock market has been growing 10-12% per year on average.

Bonus Step: Automate Your Investments

I had to throw this bonus step in because it can be a game changer to the way you invest. Simple is always best in my opinion and automating your investments means just that. When you do this you can link up your bank account to your broker, set up how much to auto invest to buy the fund of your choice every month in your investment account. This takes the burden of having to log in every single month to invest AND helps you fight the temptation of trying to time the market. It’s a win-win strategy. 

Hope this Monthly Wealth Talk clarified any questions you have about how to start investing!  If you are a Wealth Club Member you can find more information on how to start investing here and here! If you aren't a member but want to join, start here.

Mahi

PS: Any questions about this topic and anything else you've been learning inside The Wealth Club membership? Please ask away in the Q&A Forum of The Wealth Community.