A lot of people spend down their paychecks in their entirety and have nothing left over at the end of the month. But if you’re in the fortunate position of having extra cash on hand on a regular basis, then it pays to invest it. Whether you’re new to investing or have been at it for years, these strategies could help you score some pretty sizable gains that help you meet the financial goals you set for yourself.
1. Start as early as possible
When it comes to growing wealth, the biggest weapon in your arsenal is time. The more years you give yourself to invest, the more growth you’re likely to enjoy.
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Imagine you manage to sock away $500 a month in an investment account that delivers an average annual 8% return, which is a bit below the stock market’s average. If you invest over a 20-year period, you’ll end up with about $275,000, which represents a gain of $155,000.
But if you manage to invest $500 a month over a 30-year period, you’ll end up with $680,000. That’s a $500,000 gain. And if you invest $500 a month over a 40-year time frame, you’ll grow your balance to $1.55 million. That’s a gain of over $1.3 million to enjoy.