You’ve worked hard to build up your savings account. There’s no reason why you can’t put that capital to work for you. The stock market is an incredibly powerful and convenient tool that allows you to do just that.
But how do you actually go about using this tool to grow your savings?
The Standard Advice
Personally, I’m not willing to settle for mediocre returns from an expensive money manager. I’m also not interested in patiently waiting for my account to recover from a market crash. Been there, done that. No thanks. There is another way.
It really is that simple. So why don’t more people do it? There are a lot of reasons, but for now, let me just address the two excuses I hear most often.
Excuse 1: “It’s too hard”
Repeating this statement is like holding up a white flag. I mean sure, you have to apply yourself and do some work. You do have to learn about managing risk and your emotions. It shouldn’t be a surprise that something worthwhile will take some effort.
But let’s be honest: this isn’t brain surgery. Hell, I can do it! My background is computers and music, not Wall Street. Seven years ago I didn’t know the first thing about stocks. If I can figure this out, there’s no reason why you can’t as well.
Learn the rules of a trend following system like the 821x and then study charts. See how a big winner looks at it’s buy point and vice-versa for big losers. It’s not hard, it just takes practice and repetition to identify the best setups.
Excuse 2: “I don’t have time”
Do you have time to watch TV? Do you have time to play video games? Do you have time to surf the web? I could go on but I won’t. Just answer the following questions and be completely honest with yourself.
Is it worth investing the time it takes to develop a valuable skill that will ultimately lead to increased personal freedom?
Is the short-term sacrifice worth the long-term benefit?
If your actions are not congruent with your answers, perhaps you need to spend some more time on this to figure out the truth. For example, if you continually engorge on junk food, one would have to seriously question the veracity of any claim you make about wanting to lose weight.
Another thing to keep in mind is that the first step is always the hardest and most time intensive. Once you get past the learning curve of a system like 821x, it really should only take a few minutes a night to look through charts and enter orders if any. The cost in time spent is miniscule in comparison to the potential benefits.
So get busy. Don’t be afraid to make some mistakes. Lose the excuses. You can do it!
This is not a blog about saving money. There are several excellent ones that go deep into that. Mr. Money Mustache is one of my favorites.
Rather, this is a blog about growing your savings. However, if you don’t have a meaningful amount of savings set aside, you have nothing to grow. So let me take a post or two to try to inspire those that need a little nudge.
Why save money? I mean, life is short, why bother with budgets and delaying instant gratification?
For those of us who do save, the answers are as varied as our personalities. Some common reasons are vacations, cars, property, children, and the big one, retiring from your job, early or otherwise.
If you don’t save, maybe you just need to dream bigger. I know that was the case for me.
Don’t uncritically accept the expectations placed on you since childhood. This is your life! Carefully and deeply think about what excites you and design your life accordingly. If you don’t take control of your life and decide where it leads, who will? And will you like what they come up with?
Don’t settle for a two-bit role in a script society has written for you. Write your own script!
If you take the time to do this, to expand what you believe is possible and really dream big, it will have a profound effect on your priorities. You will to start to play the long game and see the value in setting aside as much money as you can now so you can achieve the future you envision.
“You either learn your way towards writing your own script in life, or you unwittingly become an actor in someone else’s script.” - John Taylor Gatto