Uncertain times. Yes. here's what you can do
Four money decisions you can make today plus I attended the online WealthSummit and my four takeaways are so helpful.
Heres what we are covering today:
Four money decisions you can make today
This is why I should always invest my cash
A quick poll - what is keeping you awake?
Four money decisions you can make today to get back control
Refreshed insights from The Sunday Times Wealth Summit
I recently attended the online Wealth Management Summit and it refreshed what I now know about money. Here is my summary in four points with supporting data from Netwealth.
It is better to invest cash.
Investing cash by putting it into the stock market, grows money faster than holding it in a regular savings account. In a data sample, over 14 years, 100k invested grows to 134k vs 73k uninvested.
NOTE: Netwealth Risk Level 4 is a fund that contains stocks and bonds
The exception is to hold cash for a specific reason:
Opportunity fund (to acquire new assets)
To weather a recession (you do not want to sell your shares at a loss during a recession and you want to wait for the value to go back up)
If your cash is invested and you withdraw a yearly amount, you will still end up with a larger portion 239k vs 35k uninvested after 14 years
You are less likely to loose money if you invest for a long time
You can lose close to 40% of your money if you invest in short time periods <3 years. Your likelihood of losses significantly reduce if your invest for longer term e.g. 10 years +.
3. The best time to start investing was yesterday and the second best is today
If you left invested in the S&P 500 (an index that tracks the largest US companies) for the past 34 years, your investment would have grown by 4000%. If you waited to time the market that is to choose when to invest and you missed the top 10 days where performance was high, your investment would grow by 1700% only.
4. Keep fees low
100K invested over 20 years loses 40k to fees at 0.65% vs 1.65%. Learn about the cost and charges rule of thumb here.
Investment and platform fees/costs/charges can significantly reduce your investments in the long run. These fees are payments financial institutions or platform companies take from your investment as payments for allowing you to buy assets and or to use their platform or websites.
📅 This Month's Money Habit
A positive money habit involves frequent reflection to ‘check the pulse’ on our money. Now is a good time to check-in and see how you are doing and what you are focusing on.
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