Investing can seem dull and confusing, especially if you don’t have a lot of money or a deep understanding of investment concepts. Despite this, we know how important it is to invest to ensure a comfortable retirement, unlike many Americans who have no savings or investments at all. Most financial advisors recommend a simple approach called ‘set-it-and-forget-it,’ which is perfect for beginners. Although it might not seem exciting, it’s really beneficial. From my own experience, finding joy in the process can actually improve your investment outcomes. Here are a couple of strategies that have made my self-directed IRA investments both profitable and enjoyable.
Long-Term ETFs and Mutual Funds: This is the essential method mentioned earlier. These funds usually grow along with the national stock market. A fund manager picks a variety of stocks and gives you returns based on their performance. Since the stock market generally trends upward, the successful stocks compensate for the underperforming ones. By spreading your investment over many stocks, you’re more likely to see your money grow. These funds save you from needing to predict the success of each individual stock. The good performers in your portfolio will help keep your balance steady over the long term. Therefore, I highly recommend making these funds a significant part of your portfolio. ETFs are even more cost-effective because they work like mutual funds but trade like stocks, saving you a bit of time and money when buying them. While this strategy can generate substantial gains, it usually takes decades. However, it’s almost a sure way to meet your financial goals, making investing more enjoyable. So, consider putting your money in these funds before trying out other options.
Day Trading/Spread Bets: For those who love excitement, this method might be more fun. If you’re willing to take more risks, several platforms let you bet on the value changes of different financial and non-financial assets. This is often recommended as an alternative investment strategy. However, it’s wise not to invest too much of your money this way—keep it to a maximum of 10% of your total portfolio. The high-risk/high-reward nature of these investments can be thrilling and help you build new skills. Many people eventually get the hang of it and start making good money, but there’s always the chance of losing your initial investment. So, make sure you understand the system and the risks before you jump in. Over time, you’ll figure out the best way to balance your investments.