Investing Starts Out a Savings Game
The truth can be painful, but here it is: no investment will rescue you from being a poor saver. In the early years of building wealth nothing is more important than securing your income, spending as little as possible, and saving the rest. This isn’t to say that investment decision isn’t important, it’s just that as portfolio size (savings) grows, the the relative impact of investment decisions begins to carry more weight.
In basic terms, a common +/-1% move in a $10,000 portfolio is a gain/loss of $100 while the same move in a $1,000,000 portfolio is $10,000. (Sophisticated Math Alert🚨). From a behavioral standpoint, the way the $1,000,000 investor accumulated that wealth was more about making frequent and regular deposits than it was about any home run stock pick. Even better, by spending years practicing a disciplined budget, the odds of blowing through a substantial portfolio are more slim...As they say, old habits die hard.
For our clients, we encourage a weekly savings figure to be deposited directly into their portfolio. It’s our feeling that better results occur when many small adjustments are made continually (like weekly) rather than more sporadic, large and infrequent adjustments to savings. Further, we have methods to deploy client savings into investments COMMISSION FREE, which is a huge long term benefit as savings are dollar-cost-averaged into a portfolio. #scottsdale #money #phoenix #tempe #tempeaz #chandler #chandleraz #scottsdaleaz #phx #az #arizona #retire #retirement #stocks #funds #saving #daveramsey @daveramsey