In addition to looking for ways to decrease your spending to give you more money to contribute to your savings and investment accounts, here are 4 tips for growing your money:
Don't Listen to “Tips” from Friends and Family
Everyone has an idea of which stocks and investments will rise and fall. When you start listening to these “hot tips” of well meaning friends or family and adjusting your investments based on these tips, you're bound to fail. Better to analyze and research companies, stocks and investments before moving your hard earned money around. Having a long term plan is the only way to success.
Know When to Sell
Just as a gambler has to know when to hold 'em and know when to fold 'em, a quality investor understands when it is time to sell a depreciating stock. It's hard to do because many people want to keep it in hopes of it recovering and turning a profit, but what often happens is the stock value drops to a point where there is no value left! Everyone knows “buy low and sell high” but there are times when you do have to make the decision to buy when the prices are low. Have personal rules as guidelines for when to buy or sell, but understand that sometimes you have to go against those rules to let go of depreciating stocks before you lose the money completely.
Don't Trust Your Instincts and Re-balance as Needed
During poor economic times with volatile markets, many people get nervous and immediately want to sell their stocks, which is exactly the wrong reaction. Have a long term mix of stock index funds, bonds, real estate investment trusts, stock index funds and keep an eye on the balancing. Move your percentages around as needed to keep a good balance based on how the market is performing. You don't speculate – stick with your long term targets and re-balance your mix.
Consider Not Using Investment Advice Services
Many investment advice services charge 1% or more of your investments, which can easily add up to a considerable amount of money every year. Experienced investors, including David Swenson (known as Yale Money Whiz) think the advice you get from many of these companies is mediocre and not worth the amount of money you pay them for it.