The title says it all on this one, folks. The stock market in the United States has been volatile this past week, and it closed on Friday hovering at about 3% down for the week.
This is the best labor day sale for your freedom imaginable.
What’s that, those of you who read my 24/7 shopping method might be asking? You want us to drop what we’re doing and make a purchase?
No. I want you to drop what you’re doing and make the best choice of your day for true freedom. If you’re coming along for the financially free ride with me, the stock market is your new best friend. To beat this metaphor into the ground, stocks are the vehicle that drive us down the road to financial independence and the freedom to pursue whatever we want. Stocks let you be a hat, Daddy.
So who make money in the stock market and how can you do it?
People who make money on the stock market get into the market and stay.
That’s pretty much it. When stocks are low, you’re seeing the best chance to buy your piece of the market and watch the value rise. If the market takes a hit again, people who make money stay steady. You’re here for financial freedom, not a quick buck, and historically, the markets average a 7% return each year. That means some years are tough, some years are buoyant, but overall, your money is making you a hell of a lot of money if you can divorce yourself from fear and start (and stay!) investing.
How can you get into the market?
Index funds! Index funds! Index funds!
I don’t have the time, interest, or skill set to monitor individual companies and make data based predictions on whether they’ll increase or decrease in value. And you know what, even the people who have the skill set don’t beat the market. Index funds give you a chance to buy a small, small, small fraction of the entire U.S. market (or whatever index you choose.) The market is on sale right now, but history tells us that it’s going to rise again.
My personal favorite index fund is Vanguard’s Target Retirement Fund*. If you have $1,000 saved, you can enter the market today with Vanguard. What makes this fund great is that Vanguard is client owned, so there’s far less motive and ability to charge high fees for your transactions. In fact, Vanguard has some of the lowest fees around, which means much, much, more of your money stays your money as it works for you in the market. If Vanguard isn’t for you, research any other low-cost index fund to find the right fit. My goal isn’t to sell you this fund, but to sell you on the idea that low transaction fees and a slice of the entire market are the right choice.
And if you don’t have $1,000 to enter the market with?
No shame here, it took me awhile to save mine up. There are other funds that you could enter into, but I suggest building yourself a safety net of $1,000 in savings, first, and then place your next $1,000 into Vanguard as soon as possible, no matter where the market is at. The point is to get you onto this path, and the sooner you’re invested in investing, the sooner you’re going to be free. We’ll get more into how (and WHY) to build up that initial $1,000 in savings soon. In the meantime, we’ll keep more freedom building tips coming to help you get there as quickly as possible.
Now stop reading blogs and go.buy.stocks!
*I’m not a licensed stock broker, this isn’t financial planning advice or an endorsement. I’m your local neighbor telling you to stop reading blogs and start buying low fee index funds.