Investing For Your Future
Monthly IFYF Investment Message
June 2006
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The phrase "Make Progress Every Day" was the theme of a successful Verizon communications advertising campaign in 2003. It is also a good piece of advice for both new and experienced investors. Remember the old phrase "a journey of a thousand miles begins with a single step"? That single step is doing something positive every day. Many people fail to make the connection between big goals and the small steps required to achieve them. They expect great results (e.g., wealth) to "happen" instead of building small progress steps into their daily activities.
Three ways to make progress toward financial goals are: daily affirmations, daily learning activities, and daily action steps.
Affirmations are a motivational technique designed to help people believe that change is possible in their lives. They are positive statements about how someone wants to think, feel, or behave that are repeated multiple times each day. Affirmations should be short (so they are easy to remember), positive, and stated in the present (rather than future) tense, even if they do not reflect your current financial practices.
An example is "I invest 5% of my annual income" when you actually are putting little or nothing aside. You would not say, "I am going to invest 5% of my annual income" because this is a future tense statement that mentally postpones action. Start your daily affirmations with the word "I" to make them personally yours.
Another way to make financial progress is to make a conscious effort to learn something new every day. With respect to investing, read an article, watch a television show, listen to the radio, talk to a financial advisor, and/or visit relevant Web sites. Start a filing system for interesting information by topic (e.g., IRAs, mutual funds, and annuities) so that you can refer to it later, if needed.
A good source of investment information is the monthly Investing For Your Future investment messages found at http://www.investing.rutgers.edu. Messages placed online since since 2004 are archived for easy retrieval and cover a wide variety of topics. Other sources of financial information and daily market updates are the Web sites for Money and Smart Money magazines, USA Today, and The Wall Street Journal.
Daily action steps build upon one another, just like compound interest. If you do something consistently, at least 5 times a week, you will make steady progress. Each little step adds to the one before it. Consider the following two examples of daily financial progress:
- Save $1, $2, $5, or $10 a day, plus pocket change, in a can or jar. Deposit accumulated monthly savings into a mutual fund investment account.
- Spend $5 a day less on discretionary expenses such as fancy coffee, snacks, and lottery tickets and use the money to offset increased contributions to a 401(k) or 403(b) retirement savings plan.
Most millionaires in the U.S. accumulate their wealth gradually over several decades. This is well documented by federal government income statistics about the incomes and assets of U.S. households and books, based on research, such as The Millionaire Next Door. The secret to building wealth is getting started as an investor and staying on track by making progress every day.