Education Lifestyle

Investing To Achieve Your Dreams

How many sluggish workdays have you dreamt about retiring early? Or moving out of your starter home and into your forever home? Whatever your financial aspirations, the first step to achieving them is the same.

Start investing now. Investing is an excellent way to help you achieve your dreams in the future, whether it’s a beachfront condo or ambitions to travel the world.

Building wealth (and affording things like a vacation home) doesn’t happen overnight. It takes time, diligence, and planning. Automatic contributions don’t hurt either.

Most people are familiar with 401ks or company-sponsored retirement accounts. If you have access to a 401k and are not contributing, stop what you’re doing and contact your human resources representative. These tax-deferred accounts are critical to help you pay for everyday expenses during retirement, but there are big consequences for early withdrawals or cashing out before the age of 59 ½.

For dreamers who want to enjoy their dreams before 59 ½, opening a taxable investment account is a great option. While these accounts include capital gains taxes, they also let you grow your money and give you the flexibility to draw from them at any time. You know, like when you spot the perfect house on Zillow.

For example, if you opened an investment account at age 20 and invested $100 per month for 30 years, you would have a balance of about $210,000. (This factors in about a 10% per year rate of return.) That gets you a hefty down payment for your new digs.

Here are three tips to get you started.

 

Know Your Why

 

What do you want to accomplish in life? Money is one important tool to help you achieve these goals. Talk to your family or friends about your goals and think about what type of finances you would need to get there. Investing money each month is much more exciting if you have plans on how you want to spend it.

 

Break Down Barriers That Could Hinder Your Progress

 

From stocks, mutual funds, exchange-traded funds (ETFs), bonds, cryptocurrency, and others, there are thousands of investment vehicles. Don’t get overwhelmed.

Avidus, for example, takes the guesswork out of investing. Our portfolio managers use decades of experience and a proprietary investment approach to find the highest quality companies to make your money work harder.

Also, make things easy. Set up automatic contributions that make investing mindless.

 

Determine How Long You Need To Achieve Your Goals

 

Again, for most of us, vacation homes or early retirement dreams don’t happen overnight. We have to plan accordingly.

Set a timeline for your goals. In general, if you would like to buy something in the next three years or less, we don’t recommend investing in the stock market because you can’t recoup any losses if the stock market fluctuates. Use a savings account or less-risky money market account.

For mid-term goals in the 3–5-year timeframe, think about opening a brokerage account and investing in conservative options like bonds.

Once you get into longer-term goals that are more than 5-7 years, consider opening a taxable investment account and starting your stock journey.

If you’re unsure about any of these options, don’t be afraid to seek professional help. When people feel overwhelmed, it’s easier to put off investing – or worse, make particularly bad financial decisions.

 

Your dreams are worth pursuing. Don’t let a fear of investing slow you down.

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