Lately, I’ve become quite the expert at procrastination. Life’s been busy, but I’ve had plenty of time to get things done—and still managed to put everything off. When I look back over the past few months, I feel bad because I haven’t accomplished much of anything.
This has especially been true with my fitness goals and efforts to automate my businesses. One of my goals is to make my blogs and my little house in Guatemala as low-maintenance as possible. That way, I can travel or just relax without worrying about them. Achieving this means I need to train my staff to handle the tasks that currently eat up so much of my time.
The problem is, each task takes only a few minutes, but training my staff would take hours. So, I end up doing everything myself and feeling frustrated.
The same goes for fitness. About a month ago, I badly sprained my ankle. Instead of finding other exercises that won’t stress my ankle, I’ve just been waiting around to heal. Now, I’m not happy with the extra pounds I’ve put on. It would have been easier to do a bit of exercise every day to keep the weight off than to try and lose it now. But here I am, too late.
Retirement savings are no different. You don’t want to delay, then look back at age 50 and realize you’ve only saved $500. Just like my other challenges, a small effort now can set you up for a secure financial future.
Let’s talk about getting started with investing.
Investing might seem daunting, but once you dig into it, it’s not too scary. If you’re clueless about the markets and where to start, I’d recommend sticking to index funds. They cover a variety of stocks, reducing your risk compared to investing in a single stock.
For example, the S&P 500 indexes the 500 biggest U.S. companies. So instead of buying shares in just one company, you get a piece of the action in multiple sectors like oil, gas, food, and transportation all at once.
When choosing an online brokerage, look for ones with low fees and low initial amounts to start. Fees can eat away at your savings over time, even if they’re just occasional $5 charges, eventually amounting to thousands of dollars lost.
Take Motif Investing as an example—it has no minimum amount to start. Rather than putting all your money in at once and losing liquidity (or worse, needing to charge your credit card during an emergency), set up a monthly automatic transfer like $50 or $100 and see how it feels.
If it feels like too much, you can lower the amount the next month. If it feels manageable, maybe try to invest a bit more. This money is earmarked for retirement, so don’t think about it for short-term needs like holidays or car replacements.
Historically, an index like the S&P 500 has offered returns of around 8-9% over the long term. While this isn’t a future guarantee, and markets will dip at times, if you’re young, time is on your side, and the markets generally recover. Saving $100 a month at an 8% return rate for 35 years could grow to $232,392 for retirement. Not bad for just $3 a day.
But if you start at 50 with only 15 years to invest, putting away $500 a month will be tougher and will only grow to about $174,575 for retirement.
So, don’t procrastinate—it can end up costing you a lot. Get started now.