If There’s One Thing We Love, It's a Quick-Win
Just mentioning them made the consultants who read this sit up (quick-wins are their favorite).
Today, we’re going to map out a few quick-wins in investing.
I still believe investing is a slow-and-steady, long-term game.
But whether you’re a new or experienced investor, there are things you can do to put yourself in a better spot today.
And all 3 combined will take you less than an hour.
Let’s dive in.
1. Clear Out Your Cash
I know two separate people who should have $100,000+ more than they do today.
How?
They were pros at contributing to their 401(k).
But they didn’t know what to do with other savings.
They just kept those extra dollars in their checking account.
A decade went by, careers (and earnings) took off, and they each grew a sizable pile of unspent, uninvested cash.
The market has done great the past 10-years, and not investing that cash cost them big time.
I ran the numbers with each of them and they could’ve doubled their money if they had invested it each year instead of letting it pile up in checking.
There’s a really good chance some of you have extra cash sitting somewhere.
It will either be:
- In your checking account as I mentioned
- Sitting in an IRA or Brokerage Account as uninvested cash.
So, today check your accounts.
If you have any cash that you aren’t specifically saving for your emergency fund or an upcoming purchase, it might be worth investing it.
2. Stop Checking Your Portfolio
Everyone’s a “long-term” investor until short-term drama hits the markets.
We sprint to our investment apps to see that we’ve ‘lost money’.
Tension builds, fear sets in, and we panic sell.
I’ve written about why that’s a bad idea. But simply put, to be a successful investor you have to be able to weather short-term storms.
Practically, that means being able to watch thousands of dollars disappear in a single day and not selling.
That’s hard to do.
But you know how to make that easier? Stop checking your investment accounts.
If you’re confident in what you’re invested in, then short-term headwinds have no impact on your long-term goals.
On the flip side, those big one-day gains are fun to see, but don't move the needle if you're investing for decades.
If anything, they just feed your pride and ego... and neither of those make you a better investor :)
My recommendation?
If you have a solid investment plan, you really don’t need to check your investment account more than a few times per year.
Knowledge absolutely is power, but everyyyyy once in a while ignorance is bliss.
3. Roll Over Your 401(k)’s
401(k)’s are incredible. Unfortunately they have service fees. Those fees are worth it when your employer is matching, but after you leave your employer, paying your old 401(k)’s fees is a waste.
So, if you have any old 401(k)s sitting out there, take your old 401(k) and convert that money into an IRA.
You won’t lose any of the tax benefits of the 401(k), and you won’t trigger taxes if you do it properly with the guidance of your IRA provider.
Fidelity, Schwab, Vanguard, and others do this all the time. Let them help you do this.
Say you have $40,000 in an old 401(k).
Over the next 30 years at 7% per year, that $40,000 can grow to $304,490 in an IRA.
But that same $40,000 with a 401(k) service fee of 0.5% taken out? $264,575.
That’s a $40,000 difference.
Is the hour to move your 401(k) to an IRA worth $40,000 to you?
Fixing just these 3 things can literally save you thousands (you’re welcome).
Reply to this email and let me know if I missed anything!
