Learning Stock Basics is an important skill to have. No player on the stock market can make without this knowledge and you have to start with the basics. Well if someone said they would pay me $500,000 dollars for something I’d certainly listen, however when it comes to earnings over time most people will get complacent. You’re probably asking, “Why would someone pay me that much from learning stock basics?”, well no one likely will. However, through the power of compounding returns, routine investments, some knowledge, and patience that’s what you could return for yourself.
For example, you say you’re investing $400 a month for the next 40 years (about the amount you can put in an Individual Retirement Account.) At the end of that investing marathon you will have saved up, with a reasonable stock market performance of 8%, a whopping 1.4 million dollars! Not bad for what most of us spend on our car payment. In fact if someone said pay 1.4 million dollars to me in 40 years and I’ll give you a new car every 5 years I would laugh at them. (Note to self, pay off the car fast.)
Alright, what about that extra half a million? Well, if you learn stock basics, study about stocks, learn about dividends, maybe find more tax advantages, or blend some higher return more risk into your portfolio it is very reasonable to improve your returns by a tiny 1%. Well 1% sounds horrible, who cares about that? That extra 1% will earn you an extra $476,125 over the 40 years. If you only took 5% of your account a year in retirement this extra 1% would have earned you an extra $1980 a month!
So go out and spend some time learning stock basics, perhaps take a class like stock market 101 at a local college, and pad up your retirement nest egg. You won’t regret it.
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