If your plan is to track the market with your investments, it takes very little skill. Clark always emphasizes that saving for retirement should be your greatest priority as an investor. However, Clark thinks too many people who buy stocks are in it for sport, trying to make money on short-term trades. He sometimes compares that to gambling in a casino. He points to the proliferation of people posting investment advice on TikTok as well as the GameStop short squeeze that happened in January , fueled to a large degree by a group of traders who congregate on Reddit.
Then you sprinkle in some individual stocks with a much smaller percentage of your portfolio. Clark also thinks a way to reduce the risk in a portfolio that's heavy on individual stocks is to buy value stocks and then hold them for a really long time. Why would somebody buy something and hold it forever? But if a stock is trading for less than its intrinsic value, the best way to realize that inefficiency usually is to hold it for a long time. Not incidentally, holding investments for decades also helps limit your taxes and fees.
Investing is very personal. Chime provides fee-free online banking services. I asked Clark. Plus, your financial life probably is simple enough that you won't need to sit with a banker for something like a home loan application.
You will have to provide basic information name, address, email address, etc. With a Chime Spending Account, you can add money through direct deposits, transfers from other banks, mobile check deposits and cash deposits at more than 90, retail locations. A Chime Spending Account also allows you to set up automatic payments for monthly bills. It offers free transactions and free person-to-person transfers too. Chime savings accounts pay 0. Also read Team Clark's complete guide to the best online banks in Also good: Ally Bank.
Credit scores have a huge impact on your life. Credit Karma provides free access to credit scores from TransUnion and Equifax, two of the three major credit bureaus.
It also provides educational resources on many financial topics including what a good credit score is and ways to improve your credit score. Credit Karma is owned by Intuit. After downloading the app, you will need to enter your name, an email address and create a new password. Credit Karma requests this information so it can access your credit reports. You can also get quotes for auto insurance as well as loans. Remember this: Each share in a mutual fund has a daily value that is set from the rise or fall of the stocks in that fund.
Since the market is down by such a huge amount, you end up owning more shares each pay period. It is the equivalent of buying stuff in a store on clearance or deep discount sale. That discount is the reason that you can make so much more over the years. If you are much over 40, you are probably not going to have the huge long-term upside that those under 40 have, but you can recover over time just by staying in the game. I hear from a lot of people that they want to wait until things aren't so scary.
And let's face it, things are bad. Unemployment is rising, foreclosures are everywhere, businesses are failing and the government has a rescue plan a day. But if you wait until the fear fades and things start to get better, you're likely to miss the best gains from investments. That is because stocks start doing better months before we realize things are improving in the economy.
If you listen to me and take a chill pill, it doesn't mean that you won't put in money each pay period this year and won't see your account continue to fall in value. Nobody knows in the short term which way stocks will go. As to what to put your money into, you can make it as simple or as hard as you wish. If you want it extra simple, most plans offer a target retirement fund. Beyond that, you may still be able to contribute but at a reduced amount. Two other good options for the self-employed and entrepreneurs include:.
From there, bump up your savings rate slowly over time. Most employers want to make saving for retirement easy for you since so few of them offer pensions these days. Be sure you take advantage of this low-hanging fruit in your life.
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