If you’re not sure where to start on your investing journey, you’re not alone. In fact, recent data shows that 41% of U.S. adults don’t have any money invested in the stock market.
The problem: investing has been shown to be a key wealth-builder over time, and the earlier you start investing, the more time your money has to grow.
How investing can translate to greater wealth
U.S. stocks, as represented by the S&P 500 index, have returned a historic annualized average return of around 11.88% between 1957 and 2021, according to experts. It’s important to note that this figure doesn’t tell the whole story of how inflation and stock market swings can impact your returns and reduce that number, but it does give new investors an idea of just how much they stand to gain.
Over time, a strategic and consistent investment strategy can give you the capital you need to buy a home, create a passive income stream, retire and pay down debt to reduce your liabilities.
Pros give their advice on setting yourself up to thrive
There’s no one formula for investing success, but we asked a few high net-worth individuals for their tips on what worked for them as they worked to build their wealth and what they’d recommend investors consider when embarking on their investing journey. Here’s what they said:
- Don’t be afraid of alternative asset classes. While you shouldn’t invest solely in alternative investments like crypto or NFTs, some exposure can be a good thing and help you avoid losing big by putting all of your eggs in one basket. “Due to market conditions, I have significantly increased my allocation in Alternatives,” says Shahed Khan, co-founder of Loom, a video messaging platform for businesses. “As we are currently in a volatile interest rate environment,