How Many Times Do You Hit Snooze?

The snooze button! It's your early morning friend - or foe - depending on how it sets you up for your day. For some of us, it's that annoying sound that goes off in the morning. (Who here gets major bedhead?)

Just hitting the snooze button requires a major amount of sheer energy! Once we do it we go right back to la la land. But for others, the snooze button can be your friend. It can give you some extra time to lay in bed, and be intentional about what you want to achieve for your day.

The more intentional you are about what you want to accomplish for your day, the higher the odds that you will get what you want.

Many people ask me about what it takes to be a smart investor. Funny thing is, investing is all about odds and probability. Yes, investing can be overwhelming, especially if you don't understand all of the financial lingo. I've got 4 strategies that you can use for your investment plan. Stay with me on these. It won't hurt a bit!

Keep in mind these are general recommendations - this is not individual investment advice.

1) Dividends: Consider investing in dividend funds or dividend paying stocks. Dividends are money that you could get if you own a stock, or own a mutual fund that owns stocks. A dividend is money that companies pay to shareholders. They are paid after the company earns a profit. Dividend paying stocks have significantly outperformed non dividend paying stocks for the last 40 years (source: Ned Davis Research) Keep in mind that just because this happened for the last 40 years, it doesn't mean that it will happen again. Remember you are investing in stocks/stock mutual funds, and you can lose money.

2) Stay in the game of investing and set up an automatic investment plan. The odds are that if you automatically invest a set monthly amount of money every month, for a really long time, like 20 or 30 years, you could make a lot more money. Remember, automatic - not a reminder you set for yourself in your calendar to invest money.

Here's a hypothetical example of investing one time vs. investing one time and investing automatically:

Invest $5,000 and make 6% a year for 20 years = $16,035 Invest $5,000 and $50 a month for 20 years = $39,653

That's $23,000 more, just for investing an extra $50 a month. Hello!!!

3) Diversification. Don't put all of your eggs in one basket. Many people think that if they own 6 different stock funds, they are diversified, when in fact - all 6 of those stock funds will go down if the stock market does. You are diversifying yourself away from a specific stock, but you aren't reducing your exposure to the entire stock market. The odds are that you could be more diversified if you add other eggs like bonds and real estate stocks to your portfolio. Just because you are diversified doesn't mean that you wont lose money, but it could help you.

4) The odds are that if you have a specific reason for why you are investing in the first place, you will be committed to your investment plan, and follow through. That specific reason needs to be a meaningful goal.

at 11:52 PM
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