3 Investing Moves to Make in 2023 That Can Make You a Fortune


Most Americans are far from what they should be when it comes to retirement savings and investments. Because it can mean you can’t retire when you want.

By acting on these three smart moves, you have the potential to achieve a happier and more financially secure future. Addressing just one can improve your financial health.

Image Source: Getty Images.

1. Regularly make large investments

Yes, this may be obvious, but it’s easier to keep in mind when you realize just how big a regular investment can make a big difference.

growing at 8%

$10,000 annual investment

$15,000 invested annually

$20,000 annual investment

5 years

$63,359

$95,039

$126,718

10 years

$156,455

$234,683

$312,910

15 years

$293,243

$439,865

$586,486

20 years

$494,229

$741,344

$988,458

25 years

$789,544

$1,184,316

$1,579,088

30 years

$1,223,459

$1,835,189

$2,446,918

35 years

$1,861,021

$2,791,532

$3,722,043

40 years

$2,797,810

$4,196,716

$5,595,621

Data Source: Author calculations.

The word “regularly” is also important. If you can, add money to your investment account monthly, quarterly, or annually. For example, when he is 40, he takes a year off, which means that the amount he invested will not increase for more than 20 years. That’s a lot of moolah left on the table.

2. Effective investment

Second, make sure you are investing effectively. For the most part, the stock market is your best bet for long-term growth, historically outperforming gold, bank accounts, bonds and real estate in general. The stock market has averaged close to 10% annual growth over the long term, but you can’t count on 10, 20, or 30 years to invest. So expect the best possible result to be over 10%, but plan for less.

The table below shows what you can accumulate at various average annual growth rates if you invest $10,000 per year.

grow up

growing at 6%

growing at 8%

10% growth

10 years

$139,716

$156,455

$175,312

15 years

$246,725

$293,243

$349,497

20 years

$389,927

$494,229

$630,025

25 years

$581,564

$789,544

$1,081,818

30 years

$838,017

$1,223,459

$1,809,434

35 years

$1,181,209

$1,861,021

$2,981,268

40 years

$1,640,477

$2,797,810

$4,868,518

Data Source: Author calculations by Moneychimp.

Easy and effective! — The way to invest in the stock market is through one or more low-fee broad-market index funds. SPDR S&P 500 ETF, Vanguard Total Stock Market ETFWhen Vanguard Total World Stock ETFHave them invest in 80% of the US market, all of the US market, or most of the world’s stock markets, respectively.

3. Reinvest your dividends

Finally, if you own stocks that pay dividends in your portfolio, you may have a regular infusion of cash from those dividends. Do not redeem them or leave them there as cash. Reinvest them in more stocks. You can wait until you have accumulated enough dollars, but check to see if you have enough money to buy more of your most trusted stocks a few times a year.

stock

Average annual earnings since 2000, dividends not reinvested

Average annual earnings since 2000, dividends reinvested

next generation energy

13.9%

16.8%

Nukor

11.8%

14%

real estate income

10.9%

14.7%

McDonald’s

9.7%

11.5%

others

9.2%

16.1%

General Mills

8.6%

10.6%

pepsico

8.4%

Ten%

chevron

8%

10.3%

SPDR S&P 500 ETF

5.3%

6.3%

Pfizer

Four%

6%

Source: theonlineinvestor.com.

These are three powerful wealth-building moves that anyone can make. See if you can handle all three. It may lead you to an early retirement, or at least a safer retirement.

Selena Maranjian has held positions at NextEra Energy and Realty Income. The Motley Fool holds positions in and recommends NextEra Energy, Pfizer and Vanguard Index Fund-Vanguard Total Stock Her Markets ETFs. The Motley Fool’s U.S. headquarters has a disclosure policy.



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