There is no such thing as getting rich quick. Fortunately, there are ways that you can slowly build your wealth without having to work hard for it. Thanks to compounding interest, you can grow your money over a period of years without having to do anything to earn it.
1) Be Patient The key to investing well is to be patient. A good idea is to check your portfolio no more than once a week. This will help you avoid the urge to do anything irrational with your money just because a stock or fund happened to dip for a day or two.
2) Don’t Take Your Money Out
No matter how good your portfolio is performing, you never want to take your money out of the market. This is because you don’t want to lose the compounding interest that you will accumulate while your money is tied up in stocks, bonds or other investments.
3) Play The Averages
The stock market has historically had an annual return on investment of 8 percent a year. However, the market rise significantly more than 8 percent or drop below 8 percent growth in a given year. This is another reason why you have to keep your money invested for the long-term. As long as your portfolio has gained 8 percent per year, you are successfully growing your money.
4) Be Smart With Your Money
You cannot trust anyone to make any decisions about your money for you. If you follow bad advice, you are the one who will suffer. Therefore, make sure that you do your research before making any investment choices. When conducting any type of business deal that involves transferring stock, you should fill out a legal form codifying the agreement.
5) Protect Yourself For The Long-Term
If you do strike it rich through your investing prowess, there are some steps that you need to take to protect your long-term interests. One such step to take is to create a living trust. This gives you the power to transfer your property to someone else whenever you want without going through a lot of legal red tape to do so. Your money is not going to grow itself. You have to take prudent steps to ensure that you always have enough money to live on. Always make your own financial decisions and never pull your money out based on one or two bad days for your portfolio.
“Brooke Chaplan is a freelance writer and recent graduate of the University of New Mexico. She enjoys writing about home, family, and fitness. In researching investment tips she found that a living trust form can help to get the process going.”