Intro to Investing in Stocks

Investing is the most reliable source of wealth creation in history. For example, if you invested just $1,000 at the start of 2011, your savings would more than triple to $3,700. Given the average annual return on the S&P 500 was close to 14% over the past decade, you would triple your money with little to no effort. That’s the power of investing. 

Chart of the S&P 500’s growth over the past decade

With a diversified portfolio, which means buying a wide variety of different stocks or simply buying a broad index fund like the S&P 500, the stock market is essentially a guaranteed profit over the long run. Yes, you can lose your money if you put all your money into one or a few risky companies. However, if you buy stocks that you know and are reputable, then growth is essentially certain in the long run.

As you start this investment journey, we have a challenge for you. Have a monthly savings goal and invest as much as you can from your bank accounts into stocks. You should have at least 3 months of emergency savings in your bank account, everything else after that should be invested into the stock market. If you have extra cash lying in your bank, it’s basically losing value due to inflation. Rich people don’t have piles of cash lying in their bank accounts, they have money working for them.

So, what are you waiting for? Let’s jump in.