The "4-1-1 on" series kicks off today with investing
Devin Czech joins us to share the cardinal principles for retirement investing
Why investing is such a confusing topic to discuss
What are some of the mistakes people make when investing?
Who are you taking your advice from?
The 4-1-1 series kicks off today with investing with guest Devin Czech. Devin writes a blog at payczech.blogspot.com in addition to having a YouTube channel. He got an interest in studying and educating himself about investments while in college. One of the biggest reasons why people struggle with investing, Devin believes, is due to lack of financial education on this topic. Today we discuss in depth an article he wrote on this blog titled The Cardinal Principals for Retirement Investing.
Systematically investing is the practice of making constant contributions into long term savings. Essentially it's setting consistent contributions every paycheck into either a 401(K) or IRA instead of just talking about doing it. By systematically investing, you are spreading risk by dollar cost averaging. In addition, you allow the power of compound interest to work in your favor.
Diversification is simply following the principal of "not putting all your eggs in one basket." But it is more than having the correct selection of stocks, bonds, and cash. It's investing in a lot of different funds that include large, small, and international companies. With that being said, diversification will look different for everybody depending on factors such as your age and risk tolerance.
Finally, it's also important to remember not to jump off the roller coaster when investing. When we are talking about investing,we are looking at the long term and not the day to day movement of the market. According to Devin, when it comes to investing, "You want to look at years, not hours." The biggest mistake people make when investing is jumping in and out of the market depending on whether it is going up or down.
To learn more about investing, Devin recommends to read about investing from a variety of sources. Don't just read one book and think you are an expert; rather learn from a lot of different resources and decide what style works best for you.
In addition, I was recently honored to be a guest on my buddy Steve Stewart's MoneyplanSOS podcast episode #92 Know where your advice is coming from. Steve and I talked for about 20 minutes and discussed why this is such an important topic. There is so much bad financial advice out there,but what Steve and I try to do on our respective podcasts is to share quality financial advice that is practical and allows you to win with money
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