Five Reasons to Become Financially Independent

Five Reasons to Become Financially Independent

 

Why even bother?

Why postpone your spending so you can invest and have more money for spending in the future?

What if you’re happy with your life and your job as it is?

I’ll tell you why.

It’s my firm conviction that everybody should invest purposefully to become financially free.

Everybody.

Including the person with a great career. 

Including the person who feels safe because her partner is providing for her.

Including the person who feels like the future is golden.

Why?

It’s called prevention.

It’s like eating fresh vegetables and working out even though you aren’t sick now.

It’s one of the steps in creating a wonderful life.

Here are five specific reasons why you should invest in stocks now in order to become free later:

Reason No. 1: Avoiding Adding a Crisis to a Crisis

Your life will take its own turns.

Surprises are part of life.

It could be sickness, a divorce, a dismissal, a global pandemic, or a sudden death in the family.

Yeah, we don’t really want to talk about that, and that’s why most people avoid planning for disasters like these.

It’s like facing the pictures of the starving children in Yemen. It makes you feel uncomfortable, and instinctively you want to scroll on.

Yes, it’s unpleasant thinking about how something can disrupt the path you’re on.

But that’s the nature of life.

We’ll be surprised, challenged, and we’ll overcome.

But we have to get through the difficulties, and that’s why you need to do some preventive work.

You need to make sure that a crisis doesn’t become bigger than it should be.

If you’re going through a divorce worrying about money, you’re adding one crisis on top of another crisis.

If you get laid off and worry about your finances, you’re adding one crisis on top of another.

If you get sick and have to worry about being able to keep your job while trying to recover, you’re adding one crisis on top of another – making it more difficult to focus on healing.

Being financially free will make you stronger in life and better equipped to handle the challenges life throws at you.

Reason No. 2: Being Able to Choose From the Top Shelf

When you are financially independent, you have more freedom to build the life of your dreams.

I don’t mean just material stuff like adding another designer bag to your wardrobe.

I’m talking about the big decisions in life and the experiences you can have:

Like resigning impromptu if your boss is pestering you.

Like taking a year off to travel around the globe.

Like deciding to have a child without having to google the cost of daycare.

Like exploring a hobby, even if it’s a bit extravagant.

Like pursuing an infatuation even if the person lives in another state or country.

Those kinds of choices. The truly important choices.

Reason No. 3: Being Able to Spend Time With Your Loved Ones

If you’re dependent on a salary, there will be situations where you’ll be at your desk wishing you were with your family instead.

Maybe your family is gathering for a celebration, and you can’t be there because work is calling.

It can be something negative you need to handle, but can’t.

When my mother died, I was spending most of my time at work.

The doctors turned off the machines that were feeding her because they said it was her wish. She had had a stroke, was unable to move much, but was conscious. We knew she only had a week left. She was dying slowly in a hospital bed.

Most of that week, I was at work. I came after work when I could.

It’s a week I can never have back.

Reason No. 4: To Prevent Stress

You’re more inclined to get stressed if you worry about your finances.

That’s a fact.

If you know that you can always provide for yourself and your family no matter what happens, it’s easier to shrug when things don’t go your way.

It won’t bother you as much if your boss is giving you a hard time.

Sometimes small things become huge when something else is worrying you.

Parents who don’t feel safe financially have all blurted out stuff at their children like “Money doesn’t grow on trees” or “Are you insane? Do you know what that costs?”

That stops when you know with certainty that there is always enough money for you.

Isn’t that a wonderful thought?

Try saying it out loud: “There is always enough money for me/us.”

How does that feel?

Reason No. 5: Being Able to Provide for Your Family for Generations

Investing in stocks isn’t only about you.

It’s about your family. It’s about all the people you care about and the ones who haven’t been born yet.

You’re building wealth, and while you’re doing that, you’re building their future too.

You can do that in several ways.

You’re your children’s most important role model. If they see and hear you talk about investing, there is a higher likelihood that they’ll be responsible with their money too.

The other way is to invest for them.

I’ve opened savings accounts and retirement accounts for my two boys, and I actively invest the money on their behalf.

My boys are still small and there’s plenty of runway to make a modest amount of money become millions.

Their savings can really grow, and it will have a big impact on how their lives unfold.

Now what?

Are you ready to invest in stocks?

Are you ready to take charge and steer your finances towards freedom and wealth?

Sounds good.

Now you need more information about how to do it.

Your first step is to browse around the blog and read the free e-book I’ve written for you.

Next is to attend a webinar.

If you download the e-book, you’ll get on the e-mail list, and I’ll let you know when I do another webinar.

Make sure to download the e-book Free Yourself right here

 

 

 

Ten Reasons You Stop Yourself From Investing in Stocks

Ten Reasons You Stop Yourself From Investing in Stocks

You’ll find them all over, but you don’t notice them.

Who?

The people who want to invest in stocks but never do.

They’ll read business news, hang out in Facebook groups about stock market investing, and some of them might even read this blog post. They’ll do anything to make their money grow.

Expect one thing.

Actually invest.

Wanting to invest but not doing it is a pretty common ailment.

They’re like the person with tons of cookbooks on the shelves but with takeout food on the dinner table.

They’re like the person who loves watching do-it-yourself programs about people who built entire houses with their bare hands, but who never get around to fixing that handle on the bathroom door.

What’s actually stopping them?

There are ten reasons why people stop themselves from investing.

If you haven’t invested yet and want to, do you recognize yourself in any of these ten points?

1. They Don’t Understand the Value of Time

Richard Branson says that any successful entrepreneur knows that time is more valuable than money.

When you invest, time makes a big difference.

The sooner you get your money invested, the sooner it will grow exponentially.

Here’s an example.

Let’s say you invest $5,000 for a child’s retirement. You get an average return of 15 percent for 60 years. How much does it turn into?

Hold on to your chair. It turns into $19 million.

Let’s say you wait until you have $500,000 and invest with an average return of 15 percent for 10 years.

How much does it turn into?

It turns into 2 million.

In other words, get at it.

2. They Make It Too Complicated

They think it’s super complicated to invest, and they believe they have to read half a library before even signing up for an investment course.

Maybe they even have the idea that it will ALWAYS be too difficult. They might make excuses to themselves like not being good at math, not being good with money, not having the right mindset.

3. They Procrastinate

They know they have a tendency to put things off, and somehow they are almost proud of it.

They tell themselves that it’s just who they are.

It becomes their excuse for not getting it done.

The real reason they hide behind a shield of procrastination is that they think investing is dangerous and overwhelming, and that’s the real reason they push it off.

4. They’re Afraid of Making a Mistake

What if they fail? What would people think of them? How would that feel?

The human mind is actually more motivated by avoiding pain than by gaining something new.

These people spend time thinking of all the negative consequences.

But if you don’t begin, you really fail. Remember that.

5. They Don’t Live According to Their Values

Either they aren’t aware of their values, or they just don’t live according to them.

They might want financial freedom and a feeling of peace and security, but they don’t take action to get it.

They’re like the person who worries about the environment but who keeps eating huge steaks and driving to work in a big diesel car.

If you want financial freedom, but you don’t invest to make your money grow, you’re not living out your values.

6. They Try to Time the Market

They think the stock market is too expensive and wait for it to dive.

The problem with that is that none of us knows when that will happen. Not even Warren Buffett can time the market.

When the correction comes, they still hesitate, because they fear that it will dive even more, and they still don’t invest.

They miss the opportunity. Every day. 

7. They Fear Getting Rich or Too Successful

Sounds unlikely?

Well, take into consideration that this isn’t a very conscious point. It’s a subconscious fear of what your family, friends, and neighbors might think if you “have too much”.

A lot of us have been told that we were “greedy”, “selfish” or simply just “too much” when we were children.

I grew up around left-wing politicians, and as an adult who took up an interest in investing, I was always afraid of being called “a capitalist”.

When it finally happened, it felt like a relief. It wasn’t that bad.

Yes, there will be people who will think badly of what you do and who you are, but it’s better to get them out of the way early on, so they don’t hold you back any more.

Shrug and move on.

Be honest about what you do and who you are.

8. They Want to Be Rescued

This is also a subconscious mechanism.

None of us would be proud of having an almost childish need of being seen and being “saved”.

It might be the woman who wants a man to take care of her.

Or it might be a man who wants mom and dad to show their love by helping him financially.

It can also be the person who plays the lottery and daydreams of a big win.

9. They Lack a Strategy

They think that buying shares is just buying, and they don’t have a strategy or a plan.

This reminds me of myself as a teenager when I tried to make my first meal.

I went to the store to look around and buy something on the fly and “just” cook it. 

I bought chicken hearts and cream.

The plan? There was no plan, I just remembered that eating the heart of the chicken was my favorite part of the chicken as a child (yes, the chicken came with all the parts). My second favorite thing was a cream-based sauce.

I went home, fried the chicken in a pan and put cream on top.

Let me tell you, chicken hearts in cream is a nasty dish. I still get nauseous just thinking about that meal.

For years after that, I told myself that I simply wasn’t good at cooking. As if my destiny was determined by that one experience.

How would my first cooking experience have turned out if I had found a recipe, made a shopping list from that, and simply followed the recipe?

You can do the same with investing. You can follow a simple recipe so you know what to put in your cart.

10. They Think They Have To Figure it Out Alone Without Help

They think they have to do it all alone at the kitchen table without getting any help. 

They don’t even know that they can get help.

Think of something you have learned and mastered in life. How did you learn?

I learned to read and write in school. I learned to knit with the help of an older relative. I learned to drive by taking driving classes. I learned to swim by taking swimming lessons, and I have even taken some as an adult to get better.

How come many of us expect to figure the money stuff out at the dining room table at night?

What To Do If This Is You

If you recognize yourself in any of these points, congratulate yourself.

You have just become aware, and now you can do something to change it. If you hadn’t become aware, you would have continued on the same path.

The first step is to get some knowledge.

I have condensed my 20 years of experience as an investor and financial journalist into my e-book, which you can download here.

Once you are on the email list, you’ll get a weekly tip or blog post to keep you on track.

You can join the investing community I’ve created on Facebook right here. You are no longer alone. 

Don’t forget to read my free e-book that explains my whole investing process. You can get it here.

 

 

 

Five Emotional Advantages to Investing in Stocks

Five Emotional Advantages to Investing in Stocks

When talking about the advantages of investing in stocks, most people talk about financial profit and returns, but cool cash is far from the only thing you gain when you invest. 

 A lot of people have a specific financial goal.

Maybe they invest to be able to retire comfortably. Maybe they invest to be able to afford a certain type of home at some point. Or maybe they invest to become financially independent.

Whatever the specific goal, there is probably another reason why you invest: the emotions you will experience when you reach your goal.

It might be a feeling of security knowing that you can retire comfortably. It might be a feeling of having more choices. Or it might be a feeling of having more control over your life.

The good news is that those feelings will begin to emerge a long time before you reach your financial goal.

The feelings will begin to settle the moment you take charge and begin to invest in a serious way.

Obviously, the feelings you experience will depend on how you invest.

If you invest in a way that resembles gambling in a casino, the feelings of stress might deepen.

Investing based on some random thing you pick up listening to a podcast or reading a post in a Facebook group might turn your emotional life into a roller coaster ride as the stock market moves up and down.

But if you invest in a way that is grounded and reliable, if you follow a strategy, and if you research before picking a stock, you’ll experience feelings of freedom, control, and security a long time before you reach your financial goal.

I have no crystal ball, and I can’t tell you exactly how your life will change. But I can tell you what changed in mine when I began investing in stocks as a value investor.

Here are five emotional changes I have noticed in my life: 

1. Less Stress

Previously, I was always in a hurry. 

I got irritated over small things, like a traffic light changing to red. I felt life was like an assembly line that I couldn’t keep up with. I was always behind, and any small change or delay messed it all up even more. 

Today, I have a feeling of time abundance. My time is mine, and I decide what to do with it.

Whenever I go somewhere, I make sure to plan extra time, so I’m no longer in a hurry going from A to B. I notice small wonders, like sounds of birds chirping or the laughter of a child – and I notice them while waiting for the traffic light to turn green.  

2. Less Grumpy 

Previously, small matters would make me grumpy.

Standing in line at the store, other people were obstacles. I hope I was polite enough, but my attitude was ‘don’t-even-think-about-asking-me-if-you-can-jump-the-line”.

Today, I know my local cashier by name, and I know she invests in stocks. I chat with the people I recognize. Strangers have become three dimensional, and I have more fun interacting with them. They aren’t just obstacles to avoid on the assembly line of life. 

3. Better at Protecting my Boundaries

Previously, I let my boss walk all over me.

When I announced my first pregnancy, he responded with a stone-cold face and told me that I should spend the maternity leave thinking about whether I was working at the right place. He basically told me that I was no longer welcome. Forget about congratulations, flowers or greetings from the workplace after the baby’s birth. I didn’t call attention to it. I let it all slip by. 

Before coming back from maternity leave, I was demoted and told that I was starting from scratch because I had been on maternity leave. In the end, I was fired while on my second maternity leave.

The signs were very clear from the beginning. I should have gotten up and left at the first sign of discrimination. 

Why didn’t I get up and leave? Because I needed the salary to pay my bills. 

Instead, I let myself be humiliated, and letting that happen gave me a feeling that it was the only way to live life. I stopped putting up sound boundaries in other parts of my life. 

Today, I have very clear boundaries. I check in with my feelings as guides. If something doesn’t feel right, it probably isn’t.

I leave the situation or the relationship and I don’t look back.

4. Better at Living Like a Minimalist

Previously, I had a hard time letting go of stuff.

I’m talking about all that stuff we collect throughout life. The pants that don’t really fit. The high-heeled shoes we never got around to wearing. The coffee machine we stopped using.

I was afraid of needing it later on.

Today, I let go of everything that I don’t use or that doesn’t bring me joy. I know that I can always buy what I need later on. When I pass the stuff on to friends or charity, I know it’ll bring joy and be used. 

I know that having a clean closet and a minimalist lifestyle is a lot more valuable than the stuff itself. 

5. Better at Enjoying My Own Company 

Previously, I felt jittery in my own company.

It was hard for me to be alone for more than a few hours. I felt like I was missing out on something all the time. 

Today, I really enjoy my investing practice.

It feels like playing chess with the world. I’m trying to figure out the next move before it happens. You could also say that researching a specific company feels like solving a riddle. 

I can easily spend days on my own with my investing “hobby” because it is satisfying on an intellectual level. 

It has given my life a new layer.

If you want to learn about solving intellectual puzzles and investing with a strategy, you can read my e-book Free Yourself here

How to Overcome the Fear of Stock Investing

How to Overcome the Fear of Stock Investing

Being careful is important… but never getting started is a tragedy.

If you are letting fear of losing money keep you from investing at all, you need to read this blog post.

You should know that investing can trigger many strong emotional responses like fear, greed, hope, disappointment, among others. It’s perfectly normal to have emotions about investing, but it shouldn’t control your actions or become a barrier.

Sometimes we’re overcome by fear (or a feeling of being overwhelmed), because it’s very new to us.

But seasoned investors can get overwhelmed by fear too. I’ve met quite a few private investors who stopped investing after the financial crisis, because they lost money. The painful feeling of the financial crisis has, with time, dominated their view of the stock market. 

Did you know that fear of something going wrong often wins over hope that things can change for the better? That is the reason that so many people get stuck in lives that are not fulfilling.

What can you do if you are overcome by fear?

I’ll give you five simple steps to follow.

1. Learn and study 

Fear can be a sign that you don’t know enough about investing.

When you engage in a new activity, you need to study and learn.

No one just drives a car. We take driving lessons, and we have to pass a test.

I don’t know about you, but I’ve always taken classes in any new activity I embark upon, be it yoga, tennis, sailing or tango. It’s simply too time consuming to try to learn everything on your own, and much more fun to take classes in it. 

It’s same thing with investing.

It’s stressful trying to figure it out on your own. Spend some time learning about it first.

You can learn through books, e-books, podcasts, blogs, YouTube and courses. I have a free e-book for you right here.

A structured investing course will be the fast track to learning. You can waste a lot of time navigating the internet searching for free information. 

A course will cost something, but you must ask yourself what you risk losing if you make a bad investment. 

2. Choose a Strategy 

How do you want to go forward with it?

Do you want to buy stocks in individual companies?

Or do you want to buy funds?

There are many different kinds of investing strategies. I’m not going to list them all here, because it will confuse you more than it will help you. Instead, I’ll make a shortcut to the two strategies that I recommend:

A. Value investing

If you want to invest in individual stocks, value investing is the best road to take in my opinion. Value investing means looking at a company in depth and figuring out if it’s a wonderful company with strong competitive advantages. It also means that you have to have an idea about what the company is worth and when you are paying a good price for it. You can learn to do that in my e-book here.

B. Passive investing with dollar cost averaging

If you want to invest in funds, I suggest you choose a low cost ETF (Exchange Traded Fund) that tracks a stock index. Dollar cost averaging means investing the same amount each month into the same fund.

3. Set a Specific Goal 

Sometimes we don’t get anywhere because we are vague about where we want to go. 

Let me use running as an example.

If getting into shape is your goal, you are probably not going to be motivated enough to put on your new running shoes and train every morning.

You need a training plan detailing which days to run and for how long.

You also need a specific run to train for and a goal for how fast you want to run it. 

The run doesn’t have to be the Boston marathon. A local 5K run is fine. The point is to visualize yourself running it and looking forward to it. It will motivate you every morning when you put on those running shoes. 

How does this translate into investing?

You need to have a plan. How much are you going to set aside for investing? What is your goal for an average annual return? 

You also need a money goal at least 10 years into the future.

How much money will you have in 10 years and what do you want to achieve with that money? What is your specific goal? It has to feel important to you.

For some people a motivating goal will be financial independence – not having to work a day job.

For other people it will be motivating buying a house. Or securing their children with wealth.

You’ll know when you have found your goal because it will excite you.   

4. Buy Test Shares 

Buying the first share is the hardest. You don’t have to make your first stock investment a big one.

In fact, I recommend that you ease into a new company by buying test shares. Just buy a little bit. 

How much is a little?

It really depends on how much money you have. A nice rule of thumb is that test shares should never be more than one percent of your investable capital.

So if you have a $100,000, your first test investment should not be greater than $1,000.

5. Network 

We join running clubs, sailing clubs, churches and gyms.

We join because running, sailing, praying and exercising with others inspires us and keeps us motivated.

You shouldn’t be investing all on your own. Doing it alone triggers more fear.

You can get to know others through an investing course.

You can also join groups on Facebook and other social media.

Some of the investing groups on Facebook are big and noisy, so it’s worthwhile looking a bit around for one that fits your need. 

I run a Facebook group called Managing Money Freedom on Facebook that you are welcome to join here.

If you want to learn more about investing, my free e-book Free Yourself is a good place to begin. You can download it here.  

How to Avoid the Top Seven Beginner Investing Mistakes

How to Avoid the Top Seven Beginner Investing Mistakes

 A lot of new investors are entering the stock market these days.

They are pushed by negative interest rates and lured by the success others have had in a very long bull market. 

But with market volatility running high, these are uncertain times to be a newbie in the market. Trying to invest without knowledge or experience and without a strategy is no better than trying to become rich by gambling in a casino. You need a plan, and you need to avoid the most common pitfalls.

So what are the most typical mistakes that you should avoid? I will tell you right here. 

1. Not Getting Started

This is the first mistake and one of the most common.

People get stuck in analysis paralysis.

They save money, open a trading account, watch YouTube videos, and join investing groups on Facebook.

They do everything – but they don’t invest.

This kind of beginner often has quite a lot of money saved up.

Why don’t they begin?

Ironically, the more money you have the harder pulling the trigger can be. 

This investor doesn’t feel safe. He or she is afraid of making mistakes. They are very good at saving because they fear mistakes in real life too.

What this investor needs is a guide to lean on.

2. Not Having an Emergency Fund

Then there is a completely different kind of newbie who is more risk tolerant and invests every single penny from the beginning. They forget to keep some money for rainy days and catastrophes.

Why is that a problem?

Life is full of unexpected twists and turns.

You could get fired; you could get sick; someone in your family might need you; or your car could break down.

They say that misfortunes never come alone. 

So of course you would lose your job in the middle of stock market crash, forcing you to sell stocks at a loss.  

How big should your emergency fund be? Around three months expenses is good.

3. Not Investing Enough

The power of compound interest is magic. But it’s only a little magic if you invest a little money. In order to become financially free, you have to invest more than a little.

Many articles have been written about how far you can go if you stop drinking latte and invest the money instead.

But really, using your latte budget is not nearly enough.

How much is enough? Well, you can easily calculate that with a spread sheet and a simple formula, and I could do that for you during a strategy call. It’s very nice to know your numbers and know what you need to do to get there.

But until you have your goal set and your monthly target, I would say invest as much as you can. The more you invest now, the sooner you will get there.

4. Not Thinking About Tax benefits

Most people simply don’t give taxes much thought. But you should.

Taxes are going to be your largest single expense. They are worth thinking about and optimizing.

In every country there are accounts that allow you to invest with tax benefits. These are typically retirement accounts like Roth IRA in the states (investment made with taxed money, but payment is tax free) or 401K which are typically matched by your employer.

Some countries also have a system for investing your normal savings with lower or no taxes. In the UK this would be an ISA account. You don’t have to pay taxes on the dividends and returns as long as you stick to the limit of how much you can place in your ISA that year (in 2020 it is 20k).

The rules will be different from country to country, so you will have to figure out which tax efficient accounts are available where you live.

My general advice is to use them.

5. Not Figuring out if it is Cheap or Expensive

There are two main types of beginner investors.

There are those who buy shares based on how they have performed in the past. Before investing in a fund, they will look at how much revenue it has made annually the last five years, and they will buy the one with the largest increase. In a way that makes sense, but really it doesn’t – they risk buying at the peak. 

This type of investor has more or less the same system for individual stocks. If it has gone up, it must be good and must continue to go up.

The problem with this kind of thinking is that you cannot extrapolate the past into the future, and they often buy stocks that are very expensive. They also risk buying at the peak and losing a lot of money when the market falls. 

Then you have the other kind of newbie who get the idea that you should buy low and sell high, so they go for what has dipped recently.

But the problem with that is that they still don’t look at the value of the company. Just because something has fallen in value, it doesn’t mean that it’s cheap.

You really have to look under the hood to see what’s there.

If you want to learn how to calculate the value of a company you can learn to do that in my free e-book here.

6. They Lack a Strategy

Some buy stocks and shares the way they shop in a flea market. They randomly notice something and buy it right away.

The problem with shares is that they are so easy to buy. You just open your laptop and push a button. or you can even use your phone.  

The beginner investor might have heard about a company in a podcast. They might have read some strangers eulogy of it in a Facebook group. Or maybe they copy their neighbor’s portfolio. Oh, yes. People do that.

You have to have a strategy, and I will recommend two you can chose between here.

  • If you know that you are not going to research individual companies, I suggest you stick to index investing with ETF’s (Exchange Traded Funds). You should do that through the method called Dollar Cost Averaging where you invest the exact same amount into the same fund every month.
  • If you would prefer to know exactly what your money is doing, would like a greater return – and also know that you  would enjoy researching the companies, I suggest you learn about value investing. This is where you buy stocks in companies when they are on sale in the stock market and sell them again when they are overpriced (or keep them in your portfolio). You can learn about this method in my free e-book.

7. They Seek no Guidance or Education

No one drives a car in traffic without taking lessons and getting a driver’s licens. No one climbs the Himalayas for the first time without preparing and bringing a guide.

Yet, many people believe that they can climb the stock market and read the traffic signs all on their own. The quickest and easiest way to make a good return from investing is to learn from others who have had success doing it.      

Do you want to learn how to evaluate and calculate the value of a company? I teach you how to do that in my e-book Free Yourself. You can download it here.  

Three Reasons to Invest Even if You Have Debt

Three Reasons to Invest Even if You Have Debt

Should you pay off all your debt, before you begin to invest in stocks? 

This questions pops up often, and the answer depends on your situation.

If you have a lot of debt, and if it’s very expensive debt like credit card debt, then the answer is no.

Pay your debt before you begin to invest.

But if you debt is of the healthy kind with a low interest rate and if it used for building or purchasing some kind of asset – like a mortgage or a student loan- then the answer is yes.  Begin your adventure into stock investing even though you are still paying of the mortgage or student loan.

If we all waited with investing until we had paid our student debt and mortgage, then we would miss out on the stock market almost until we reached retirement age. 

Here are three simple reasons for investing before your debt is completely gone: 

Reason no. 1: Your return will be bigger than the interest

If you can make more money investing than you actually pay in interest on you debt, then you make a profit. Go for it. Invest. 

But in the opposite case, you should stay away from investing. In other words, if you are not sure that you can make more money on the investment than you pay in interest on your debt, then stay away.

Lets be specific. If you pay 3 percent interest, and if you feel confident that you can make an 8 percent return on your investments then go ahead.

But lets say that you pay 15 percent in interest and you think you can only make 4 percent in return on your stocks – then you are losing money, and you should not invest before the debt is paid off. 

How high will the return on your investments be?

That depends on how good you are at picking stocks. 

Stocks gives you an average of 7-8 percent in return if you invest in indexes (the stock index S&P 500 has given a return of almost 8 percent since 1957).

Reason no. 2: You get valuable stock market experience  

Investing is a skill that takes time to learn.

It makes sense to get into the markedet at an early age. You take advantage of compound interest which means that your return will make a return and your money will grow exponentially. So will your experience and your ability to make a good return on your investments.

You can learn some stuff from investment books, podcasts and Youtube-videos, but you really learn the most from practicing it and getting some real world experience in investing.  A combination of learning from books and courses and getting practical experience is the best combination.

If you wait until you have paid your whole mortgage down, then you loose a lot of valuable time learning.

The great news is that you will learn regardless of how much money you invest, so you can begin with a little money until you feel more confident. 

Reason no. 3: It is motivating to invest  

It is fun and fascinating to see your money grow. That is very motivating when you are trying to save money, pay off debt and manage your finances in general.

You will want to have more money, make more money and save more money once you get started on your investing journey.

I would go so far as to say that you will regret it later, if you don’t get started now. When you discover what your money could have become, you are going to wish that you had known this when you were younger.

If you want to learn how to invest like the best, I can read my ebook here.

You can begin with this check list with 12 questions you should investigate before you put your money in a company. You can download it here