Have you made your first investment and are wondering what’s next?
We’re talking to you in this episode and bringing you five tips to upgrade your investing game and make sure you’re on track.
Plus, we’re right by your side during the journey, keeping you on track and accountable for reaching your long-term investing goals.
Let’s start building wealth slowly together!
Number #1: Checking your brokerage account every day doesn’t change things
Unfortunately, looking at your brokerage account on a regular basis isn’t going to help you reach your investing goals more quickly.
Instead, it might cause you to start deviating from the plan by making short-term decisions based on your emotions.
Number #2: Diversification isn’t just a numbers game
Just because you have a portfolio packed with shares, ETFs, and other investments doesn’t mean you’re actually diversified.
Instead, look at what’s happening under the surface of your investments.
You might realise that you have an S&P 500 ETF, a technology ETF and a handful of investments in individual technology stocks, and you’ve got a significant amount of overlap in your portfolio.
Number #3: Unless you really want to, don’t make it a hobby
Sometimes, the worst thing we can do to our investments is spend too much time and attention on them. Not everyone wants investing to be their hobby or career, and that’s perfectly okay! We might find that we make a lot of changes, get more stressed out and fall short of our goals when it becomes a hobby, which might be a good sign to step back and keep things simple.
Number #4: You need to have a plan (and that plan will change)
Grab a piece of paper or open a Google Doc, and jot down your responses to the following questions. Note: you won’t have all the answers right now, so come back to this list over time as you learn more about investing.
- What does my portfolio look like right now (if I’ve already made some investments)?
- What is my long-term financial goal? E.g. I want to have a million dollar investment portfolio
- What are the key risks that will stop me from achieving my goal?
- How much am I going to invest each month?
- How long will I be investing for (in years)?
- What will I be investing in? List the investments you’ll make as part of your strategy (e.g. diversified ETFs, buying a property, cash etc.).
- What portion of my portfolio will be allocated to growth investments (e.g. shares) versus defensive investments (e.g. cash)?
- What’s the maximum amount I’ll invest in any one investment? E.g. I will not invest more than 5% of my net worth in a single stock.
- Have I common sense checked my expectations against reality? Keep in mind that past performance doesn’t equal future performance, but it does provide an indication of what could be realistic.
- How will I track my portfolios performance? For example: tracking against the S&P 500 benchmark
- When my portfolio falls by 20% I will…
- How often will I check in with my portfolio? For example: if you only want to check once a quarter, then it’s probably a good idea to remove your brokerage app from your phone.
These questions will take you some time to answer; heck, it took me years to fine-tune my own approach to investing, and I still don’t always stick to the plan. But having this written down as a starting point will give you more confidence in your investing journey.
Plus, it’s a great document to modify over time as you learn more, come back to in times of investment volatility and use it to record your journey.
Number #5: You don’t have to keep levelling up
After a few years, you’ve probably sorted out your budget, set up your core portfolio and have a plan to reach your long-term goals – and that’s enough! You don’t have to keep levelling up on your investing journey.
That’s not to say don’t stay on top of changes to your investments, brokerage platforms and tax obligations. Rather, your quest can end. You don’t have to keep finding a more complicated strategy and changing your plan every year.
✅ What are your tips? If you’re listening on Spotify, let us know in the comment box; otherwise, send us a DM on Instagram!
