Money for Nothing
I am going to get into why I chose this song shortly, but I just have to say that watching this video and hearing the lyrics REALLY took me on a time machine ride back to my childhood where MTV was the coolest channel ever and I watched it nonstop. Videos like these didn’t seem cheesy, they were innovative and inspiring, and now they just make me giggle.
So why did I open up the vaults of my childhood? Well, this week I am talking about investing on the blog. I have had a few requests recently to talk about it, and I realized it’s been a while since I focused on this part of our overall financial health.
Investing is Easy
The main reason why I don’t always focus on investing is that despite the fact that people are afraid of it or it seems complicated, out of all of the components of your financial picture, investing is the “easy” part. The hardest part, to me, and for most of my clients is actually building the wealth that you need to start investing, and I am not talking about hundreds of thousands of dollars, I am talking about an amount as little as a few hundred dollars. Once you have the wealth you need to invest, the rest is pretty easy.
I don’t care who you are; most of us want to know the shortcuts and the easy answers, and honestly, the best way to get “money for nothing” is by investing it. I have a client who had a significant amount of money sitting in a bank savings account. The large balance in the savings account made her feel safe and secure, and I understand this need; however, the savings account was only making her $60 a month if she was lucky.
Making Your Money Work For You
I tell my clients all the time that they work hard for their money and they need to make sure that their money works hard for them in return. Money in the savings account does not work hard for you. If I had to put it in workout terms, money in your savings account is like walking slowly on an indoor track. It’s safe and protected, but that kind of workout is not really going to get you in shape. Money that’s invested is like money that is running full speed on a treadmill. There is the possibility for injury, but over time, you are going to get great results.
A year ago, I told this client that she needed to start investing some of the bank savings money, and after she stopped looking at me like I was crazy, she agreed to slowly dip her feet in the investing waters. We began investing in a brokerage account, and when we met six months later, she was already starting to see the growth in her investments and an increase in her monthly income.
From Skeptic to Believer
Finally, when we met for her one-year review, she agreed that she needed to put more money in the investment account. By this point, her monthly income had grown over 400% from the bank savings account, and she could see unrealized gains in her other accounts. Yes, she saw the ups and downs of the stock market in her account, but in total her money was much further along than it was sitting in the bank account.
Yes, investing can be scary and it is like riding a rollercoaster, but if you truly want “money for nothing”, the best place you are going to get it is through an investment account. On Wednesday, I am going to share 15 ways to invest in 2015 and my podcast on Friday is entitled “Investing for Millennials” which I created per some listener requests. I hope that you make 2015 the year for making money for nothing.