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Keep Investing Simple: The Secret to Wealth

Day trading, currency trading, puts, shorts, options… All that stuff, it’s just for fools. Don’t worry about it. In fact, if you want to be wealthy, you’ve just got to keep investing simple and forget about all the complex terms you hear in the finance world!

Related: 5 Reasons Index Fund Investing is a Great Strategy for Beginners

My Younger Days…Of NOT Keeping Investing Simple

The flashing of lights, the expressions of hope and optimism, and there was also my pounding heart… It was all fresh and new to me and quite exciting to be honest. I had always been taught that gambling was a fool’s game, but here I was in one of the most popular casinos in Florida. It was time to witness this fool’s game for myself. And you know…while I was there, I figured I may as well bet a dollar or two. ‘There won’t be any harm in that.’ I thought to myself…

I had played blackjack and poker with friends in the past, but I didn’t have the confidence to walk up to a table myself and start playing with strangers, so I did what anyone would have done in that situation. I followed the flashing lights and parked myself in front of the fanciest penny-slot machine I could find.

I loaded my crisp single dollar bill into the machine and pushed the button.

Rows and columns moved all over the place. Colors blurred across the screen. Then everything settled.

I lost.

Five cents gone. 

I pushed the button again.

Another 5 cents gone.

One more time.

This time when the icons settled, more flashing ensued. Lines flew through the objects every which way.

I won! And the game gave me 20 free spins, which it of course took care of for me. 

I couldn’t believe it. I was winning!

My 90 cents was now $2.00.

Then $4.00.

Then $7.00.

Finally, the crazy array of spins and colors and the dollar build-up on the screen came to an end.

My $1.00 was now $14.70.

Don't invest in bitcoin. Take the better odds and keep investing simple.Cash Out! Then try to repeat my success…

When I saw the $14 on the screen, I had just one thought. 

Cash out! Cash out! Take my winnings and run!

So I did exactly that. 

I got my payout, bought some $7 ice cream, and then pocketed the rest of my winnings for a later date. 

Man, that felt great. I knew I was lucky since most people don’t leave the casino with extra money in their pockets, but for some reason, I had the feeling I was special. Like if I played again, I’d win again. 

So, a few weeks later, I found myself in front of that very machine again. This time, instead of a crisp $1 bill, I loaded a fresh $10 bill into the machine.

Inside of 5 minutes, my entire $10 was gone.

The Realization, the Lesson, and the Parallel

Lessons don’t often strike you when you’re winning. Unfortunately, you often have to lose your shirt before you truly learn something. 

That second trip to the casino taught me that if I gamble, I’m likely to lose. Sure, I could strike it big and win many times my investment, but if review the stats and take an honest look at the odds, I’m more likely to lose than win.

The story is quite similar when one invests in highly volatile markets. 

Invest in Bitcoin, gold, or currencies, you may win for a time (and perhaps win big!), but you could soon lose your shirt and you know it. The allure is strong, but I highly recommend that you stay out of these speculative markets.

Instead, be the turtle. 

Plan out your slow methodical race, and be intentional. 

Instead of trying to double your money in 7 days, target 7 years. You can do that by earning just 10% on your money each year. Look at what can happen if you do just that.

Keep investing simple by earning just 10% over a long period of time

By earning just 10% over time, $100,000 could turn into $12 million in 49 years! Isn’t that just crazy! And, unlike the casino, the odds are in your favor!!

Now, it’s time to turn that mentality into real dollars. It’s time to learn about the simple actions that are more likely to fetch you a long-term profit.

Keep Investing Simple with Vanguard Index Funds

Ever hear of the Dow? The Nasdaq? The S&P 500? Those are indexes. Simply put, they’re just a conglomerate of major company stocks.

  • The Dow is an index of 30 large companies – like Caterpillar, IBM, American Express, 3M
  • The Nasdaq is an index of tech companies – like Apple, Comcast, Facebook, Intel
  • The S&P 500 is an index of 500(ish) major companies – like Apple, Amazon, Tesla, Visa, Walmart

And, anyone can invest in them through a simple brokerage account. 

Why choose an index? 

Keep investing simple with an index fund.

Why?

Natural diversification. ie. You can spread your money around to make your investment safer…just by investing in a single index (after all, the index is already made up of many companies, right? Right.).

Personally, I choose Vanguard for my investing since they have free trades and super-cheap index funds.

My Favorite Vanguard Index Fund: VFIAX

VFIAX is the Vanguard 500 Index Fund. It models the S&P 500 Index Fund, so yes, it is naturally diversified. And, there are barely any fees being charged – they’re just 0.04% of your investment vs. a typical mutual fund that’s 1% or more (which is a big deal by the way!).

Plus, the big kicker…this fund has averaged over 13% growth per year over the last 10 years. 

You know that chart that I laid out for you above? The one where you can double your money every 7 years by earning 10%? This fund has done that…and then some. 

If you would have invested $100,000 just 10 years ago, that money would have nearly doubled twice by now.

Your $100,000 would be worth $367,000 today. 

Dang! Screw the casino and their odds! I’m getting my high from this steady index fund! 🙂

Want to Invest? Keep Investing Simple

Want to start investing? Not all that comfortable with it?

Don’t pretend to be something you’re not. Don’t invest in single stocks. Stay away from trading currencies. And please don’t try to make millions with Bitcoin. 

It’s all speculation.

Keep investing simple.

Stay in your lane and stick with the average wins. Chances are, you’ll come out ahead in the end!

Are you committed to keep investing simple? What are you investing in? Tell us in the comments below!

Grow Rich Investing Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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