If you follow the latest news on investing, you’ll see all sorts of exciting opportunities to catapult your wealth.
You’ll hear about 15-year-olds who are now millionaires because they put what little money they had into an obscure cryptocurrency coin. You’ll find out about how you missed out on the latest meme stock that Reddit users flocked to and created a short squeeze.
You’ll also see many predictions about which investment is going to the moon next. However, the best investment results often come from a more boring approach.
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TikToker and personal finance coach Delyanne Barros, otherwise known as Delyanne the Money Coach, has some investment advice that might not be too exciting until you see the results.
Her short TikTok video said: “In October 2019, I opened a brokerage account. I made a purchase of 70 shares of a boring index fund of $19,641. Those 70 shares are now worth $36,896. That’s a 53% return for the last four years. When it comes to investing, boring is a good thing.”
Making boring investments sounds easy enough on the surface, but long-term investors must possess several things to find success:
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Maximizing your investments takes a long time and requires patience.
Day traders who try to time the market by buying low and selling high might make lucrative trades once in a while, but investing over the long term is a much safer and more rewarding approach.
Long-term investors take advantage of compound interest, which is when your initial investment generates interest that gets reinvested. The next time that investment earns interest, your initial investment and the previous interest generate interest.
This cycle repeats over time, creating a snowball effect and increasing profits, but it takes a patient investor to see it through.
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Being consistent and sticking to your investment strategy is another principle for long-term success.
Making regular fixed investments over a long period of time is called dollar-cost averaging. You invest when your asset’s price is both high and low because in the long run, this will balance out in your favor.
Staying consistent allows you to continually put money into your investments without the stress that those who try to time the market feel. The discipline of making regular investments will also keep you on track to reach your financial goals.
