Time to Invest?

There is a lot of uncertainty with the economy these days and for good reason. It may seem counterintuitive, but now may be a good time to start or get back into investing. With the recent market corrections, there are some bargains to be had!

I’ll start with a disclaimer. I am not a financial advisor and can’t recommend strongly enough to seek the assistance of a professional before beginning investing. What I am, is a firm believer that investing early and often is a financial truth to build wealth! Despite the uncertainty, now may be a great time to start investing if not already.

I’ll share how I began my journey investing nearly 30 years ago as an example of someone who began too late. After graduation from college and commissioning in the Army as a Second Lieutenant, my first job was to remain at my school for a few months and recruit for the ROTC program before heading off to basic officer training. I was 23 years old.

One day my boss, a very experienced Major, asked me to join him for lunch. He asked, “Do you know what mutual funds are?” Of course, I didn’t have a clue. My boss very graciously spent a lot of time with me over the next few days explaining the basics of investing.

His advice? No matter how small, even $50 a month, start investing into mutual funds immediately. I later learned this is a concept called the time-value of money which in simplest terms means an investment delayed is an opportunity lost! He even suggested a good mutual fund to consider and provided the phone number for more information (these were pre-internet days).

Needless to say, I took his advice and am eternally grateful for it! What started out as investing $50 a month, grew to become a way of life. At our highest point, my wife and I invested nearly 30% of total income every month!

Even approaching 50, we still invest a set portion of our income monthly. This strategy for investing is called dollar cost averaging which simply means investing a set amount at a recurring frequency. The market maybe high or low, but it should even out in the long run! Another strategy would be market timing which is exactly like it sounds. Investing when the market dips as it has recently.

There have been a few ups and downs over the years, but a big part of our net worth is stock and mutual fund investments of literally all flavors to include equities, bonds, commodities, international etc.…

I am certainly not qualified to provide advice on the best investment product to pick. I would offer that there is a relatively new option for mutual fund investing called “target funds” that takes some of the guess work out and could be a good starting point for the new investor.  

Target funds are generally named for a target date (i.e., 2040) and fund managers will rebalance the positions within the fund based on the goals as well as distance to the target. Some of these target funds perform pretty well. However, most investment advisors would probably submit than an actively managed portfolio with a variety of positions will usually net higher returns.

I can’t recommend strongly enough again to seek the advice of a professional.  After several years of winging it on my own, I established a relationship with a great financial advisor and haven’t looked back. The 1% a year or so in advisor fees is money well spent to help maximize the growth of wealth, especially for the long-term investment accounts.

If you’ve read my blogs, you know I’m a huge fan of real estate investing, and I believe real estate ownership is yet another financial truth to build wealth. Real estate is a very important part of our financial plan. However, investment accounts remain the cornerstone of my family’s financial portfolio.

If I had started investing five years earlier at age 18, my family would have reached our financial goals sooner. Money kept in a coffee can, under a mattress or in a traditional savings account simply won’t grow. To build wealth one must invest early and often…the time-value of money. If you are one of the few folks who aren’t investing, now may be a great time to start!  

Want to learn more about the “invest early, invest often” and other financial truths? Check out my book, Millionaire on a Worker’s Budget: Five Financial Truth’s to Build Wealth on sale now at Amazon!

The commentary provided in this blog and in my books are for informational purposes only and not intended to be a source of financial or investing advice. Views, opinions and biases expressed in this blog are the authors and do not reflect those of the U.S. Army or Department of Defense.

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