Page 47 - Workbook3E

Plan Your Investment Then Invest in Your Plan
3 Pay Yourself
As you’ve already learned in the prior Workbook, it works best to pay toward your future first. Regardless of the amount you’ve committed to invest, make a habit of investing in your future first. Your consistent, focused action yields high returns.
On your journey to Financial Freedom—avoiding the temptations and detours along the way—you’ll find the most rewarding step is to write a check to your Investment Account first... even before you pay bills. You’ll be traveling the road to Financial Freedom in a souped up racecar designed to finish in a mere fraction of the time required by other poorer planned cars. Streamline the process, and have your investment or savings automatically transferred from your checking account to your investment account monthly, using automatic fund transfers or bank drafts.
Fixed and Regular
Investing a fixed amount of cash, at regular intervals, is a lot like the water left dripping on
the sandstone. The strategy is called “dollar-
cost averaging.” It’s a simple way to help reduce investment risk. Your dollars buy more value when the price of the investment is lower and less value when the price is higher. By investing regularly over a wide range of prices, your investment accumulates at a lower average cost per unit purchased than if you’d invested a large sum of money at one time maybe at a higher price.
Of course, dollar-cost-averaging doesn’t protect
against loss in a declining market. Therefore, it’s more profitable to continue your investment for a longer time so possible
changes in price will average out in your favor.
Go Long to Score Big
With investing, patience is an important virtue. Over the short term, financial markets rise and fall in response to many factors. Attempting to anticipate these market changes for quick gains is extremely risky. Most successful investors take the long-term approach when investing to reach their financial goals. The longer you hold your investment, the bigger you’ll score.
“Happy are those who dream dreams and are willing to pay the price to make them come true.”
~ Anonymous
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