How to Make Money Grow – The Keys to Financial Freedom in Retirement
The average person believes that the world of finance and investing is too complex, because the financial industry makes it sound complex. They use words that you don’t know or understand and you don’t know what to do with your own money to make it grow and achieve financial freedom. They can benefit by the over complication of the industry so you hand them your money and pay them fees to do something you can do yourself.
You can’t wait until you have a lot of money to start investing it. If you can invest in business, even a small amount, it can grow. It doesn’t matter how small it is, the important thing is starting today. The first step is the most important and you must start now and commit yourself to sticking with it.
Your investment must become an automated part of your life. You should take a percentage of what you earn on a regular basis, pretend its a tax, and send it straight to your investment account. You can never see that money and because its automated for you, it happens without you doing anything. Even if you only save 20% of your income and compound it, it can grow to incredible amounts over time.
After you’ve taken this step to start investing no matter how small the amount and to automate it, you must then become an insider of the money game and to understand the rules to master it.
People who are not insiders and don’t understand the rules believe that mutual funds can beat the market growth. Its a fact that 96% of mutual funds have not even beaten the market growth over a 10 year period. When you hire someone to invest for you because you believe its too complex and you’re too busy to invest your own money, you don’t even stand a chance of beating the market.
If your goal is to achieve financial freedom in retirement or sooner, you must take into consideration the fees
that you must pay to mutual funds for them to invest your money. The average fee to invest is 3.1%, and just like you can grow your money by compounding interest, fees also grow by compounding and the fees can grow to extortionate amounts. When you retire, the fees after compounding will make a tremendous difference on how much you finally get.
When you give your money to someone else to invest, you are taking on all of the risk and providing all of the money for that investment. Not only that, you are paying them a fee for this privilege. If you lose, the investor will still win. If you win, they will also win. If you make money on your investment, they get a very large cut over a long period, and this money is simply wasted.
You can go to the stock market yourself and own a small piece of all the large companies, the best of all business, for a small fee and cost as apposed to going via a mutual fund. By taking control of your own finances, you not only waste less money on fees, you have a considerable amount of more money at the end that you can keep and enjoy in your retirement.