Investing & The Snowball Effect

Are you enjoying the snowball effect in your finances?

Getting started in investing, or stepping into new investments and strategies is always the hardest part. Yet, once you get going the rewards can be huge.

It’s not unlike braving the cold in winter. The hardest part is bracing yourself to walk out the door and take those first few steps. Then if you stick your hands in the snow, make the start of a snowball, and then begin rolling it, it gets big fast, and can really gain traction. The same applies to our finances.

Somewhere over the years most grownups have lost that excitement, courage, and draw to the magic of trying new things, and getting out in the snow to play. If only we kept some of that childlike confidence and spirit, we’d be doing so much better financially. We’d be seeing better results and having a lot more fun too.

With our money, it gets easier and the results compound as we consistently keep our investing in motion too. That doesn’t mean we have to be constantly hands-on, but we do need to keep pushing. Warren Buffett’s mentor, Benjamin Graham is famous for ‘dollar cost averaging’. That means just sticking to the principle of consistent investment, no matter what is happening around us. A great way to do this is to commit to yourself to invest a little each quarter. No matter what. Set automatic transfers from your checking account every time you get paid. Then use that chunk of money to make a good investment each quarter. This will keep a nice cash cushion balance in your IRA so you feel flush, while giving you access to better investments, and enjoying tax benefits. When you see your nest egg and passive income growing, it gets you excited, and can be incredibly motivating.

For example; if you just saved $5,000 per quarter, and had $5,000 saved now, after 20 years you would only have $405,000. That would actually be worth less due to inflation. Now if you began investing $5,000 per quarter and achieved an average return of just 10%, it would be worth $1,179,137.49 by the end of the same time period.

Think about that when the snow starts falling, and you pack your first snowball, or your kids ask about making that snowman - as it can also be a great teaching moment for them!

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund