Investing Money, Apply Your Millionaire's Mindset

Investing money scares many people. They generally have several limiting beliefs about investing or their own ability to manage investments. Furthermore, fear is a very common emotion that prevents people to take steps.  

Fortunately, in today's modern world most larger companies offer investment programs (401K) that take much of the fear out of the equation. Even many smaller companies offer that investment approach. It is a wonderful thing and something workers should participate in. There is more you can do without being an expert in all the different investment vehicles. 

It begins with your mindset of a champion which is enhanced with your millionaire's mindset. The early you get started the greater the wealth accumulation because of the power of compounding interest. Investing money when you are young pays off enormously in the long run.

Investing money does not need to be a fear ridden or risky experience. You do not need to really have any special college degree to be successful. You do need discipline, patience, and a millionaire's mindset which embraces investing.

Let's look at some investing money examples.

We will begin by assuming you are 32 years old and have a family, but you have never invested any of your money. You decide now is the time and manage to scrape up a measly $200 per month every month for the next 34 years and you had already managed to save $5000 which you use to open an account.

The $200 a month isn’t even close to 10% of your income, but you will have social security which is stealing 18% of your potential money for investing. You aren’t much into managing your finances and you know you need to diversify and you want some security. Because you have a mindset of a champion, you seek out the knowledge you need to invest your hard earned money, accumulate wealth for the betterment of your family and community. 

After investigating, you realize the S & P 500 has never lost money over any 20-year period let alone the 34 years you plan on investing, so that seems quite safe to you. It is certainly diversified as it covers the 500 largest businesses in America. You decide to invest in the ETF SPY which mirrors the S&P 500 and figure when you get close to retirement you will move it into an even safer investment.

For the next 30 years, the S&P just happens to do about its lifetime average and you get a 9.5% return on your investment. You have $730,100 in your retirement account. Transferring that into a much safer investment that generates a measly 5% annual return your retirement account will net you $36,500 in annual income plus whatever your social security would add to that. It is not a lot but given your expenses should be significantly lower you should be able to enjoy a nice retirement. If you want to determine what your social security might be you can look at that here.

Now, let’s assume you decide to wait five years to invest. If you do that the amount you would have at retirement is $445,371 or a “loss” of $284,729, which amounts to slightly more than $14,000 annually. If you started five years earlier you would have $1,187,118 or $59,356 annually. Under this scenario if you waited until you were 37 to start investing you would have to invest $355 per month to get to the same end. If you want to play around with those investment numbers you can down load this excel spreadsheet I created and watch my tutorial here.