@ajturnmaker

Better Together

These simple Set it and Forget it investing fundamentals can earn you more dollars– over time– than stock picking.

Never again will you have to stress about the what and how of retirement planning, investing and wether or not to take the hot stock tip from fast talking brokers.

(this is opinion and information only. Always consult a certified financial advisor/planner before investing)

HOW TO MAKE A MILLION

DOLLARS WITH AUTO PILOT

INVESTING

STEP 1: COMPOUND INTEREST

Investing using the power of compound interest is the smartest thing you will ever do.

Trust us. If you could meet your future self they’d say, “Do it now!”

Here is an example of how compound interest works:

You have 100.00 and invest it somewhere with a 10% return.

That 100.00 is now 110.00.

You keep that 110.00 in the investment at 10% and now you have 121.00.

And so on and so on …

In case you did not see it … the 10.00 you earned in interest … on your original 100.00 investment … is also earning you money!

Imagine what happens when you sock away 100.00 dollars a month over 10-20 years employing this simple illustration.

Can you say: “I’m a Millionaire.”

We knew you could!

“Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more.”

– Benjamin Franklin

Now that you know how to use compound interest to your advantage let’s see how it can make you a million dollars using the other three principles.

STEP 2: DOLLAR COST AVERAGING

Let’s say you are twenty years old and you get two paychecks a month.

Have 145.83 from each check automatically deposited into your companies 401k. If you do not have a 401k you can set up an IRA thru an investment advisor.

STEP 3: ASSET ALLOCATION

Spread your risk.

We can’t tell you where to invest your monies. That’s on you and a certified investment advisor. But most people will spread their investment into two buckets.

Bucket #1: Bonds or Stable Value Funds (lower risk, lower return)

Bucket #2: An Index like the S&P 500 or the Dow Jones (higher risk, higher return)

You should aim (between your two buckets) to get a 7% lifetime return

Note: Over the life of the index we are assuming there will be an average of a 7% return. Warren Buffet uses 7% in his calculations and that’s a guy we are not going to argue with 🙂

STEP 4: Time

This is the easy part …

Keep contributing with your auto deposits and in 20 years you are a millionaire!

LOGIC: Auto Pilot Millionaire Investing

Using dollar cost averaging you are buying more shares when the market is low or crashes and less shares when the market is high. Over time this balances out and reduces the risk of buying lump sum shares at the wrong time. Studies have shown that this method will be much more successful than trying to be a market timer.

BONUS: Auto Pilot Millionaire Investing

  • Because the two buckets trade inversely—Stock Market Up Bonds down and vice versa–some people will occasionally skim the bucket that is over flowing and put it in the bucket that is not doing well (buying it cheap when the investment is under performing)
  • Trying to time market tops and bottoms is like trying to catch falling knives. It’s stressful and dangerous! If you are the type of person that does not want to stress over all the news, talking heads, friends with investment advice, pushy brokers etc; … this is for you

Helpful Hints:

  • Talk it out with a licensed professional
  • A good rule of thumb is to invest 10% of your income
  • Make it as automatic as possible. It’s key that you do not even see the money going out. Believe us, you won’t even miss it
  • If you want to see how much you need to save a month there are lot’s of online compound interest calculators
  • If you are riddled with debt (like credit cards at 17%) make some lifestyle adjustments and pay off your debt first … asap!
  • Bucket #2 is usually heavily weighted in the beginning years. It’s important that the older you get the more money you want in your lower risk bucket. You just don’t have the time you had in the beginning to capitalize on and/or recover from a market crash
  • If your company matches your contributions in your 401k take FULL ADVANTAGE!
  • In a 401k the money you put in is not taxed–just another reason you should take full advantage
  • Unless you have the intensity and moral flexibility of a Gorden Gecko you’d do well to employ these fundamentals and NEVER stray.
  • Always remember that fast talking brokers and online trading platforms make money on each and every trade you make … nuff said.
  • The later in life you start this process the more money you will need to auto invest. There are many online calculators that will help figure that out. Better yet, talk to an investment advisor
  • Yes. Twenty years seem like a long time; but it will go in a flash. Ask anyone in their 40s.

Salud!

Andrew + TurnMaker Team

Disclaimer:

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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