Investing is definitely a long-term effort. Most people don’t see returns right away and this can be discouraging. Recently, the markets haven’t been that great, which can make many people second guess their plans.
However, if you’re able to stay motivated over time, you can reach your goals whether it’s retiring or becoming financially independent by a certain age. Investing is still one of the best ways to build wealth and gain financial stability in the future.
Staying the course is key but you may be wondering how to do this when the markets are down and it seems like your money isn’t growing. Here are some helpful tips to stay active and motivated when you’re investing, no matter what your accounts look like.
Act As If Buying Everything on Sale
I’m not going to pretend as if the stock market hasn’t been pretty low lately. The market has gone down quite a bit and perhaps your account has even lost money. So, why should you stay motivated and keep investing? I’ll explain more in my next point, but think of it as buying stuff that’s on sale whenever you contribute to your retirement or brokerage account.
Thinks of it this way. I love Honeycrisp apples. They’re the perfect mix of sweet and tangy but other people enjoy these apples too and they can get expensive. Would you prefer to buy a bag of Honeycrisp apples at their highest prices of $7 to $9? Or, would you want to buy them on sale for $4 or $5. Most people would want to buy them on sale and it’s a similar situation when the stock market goes down.
When the market is up and everything is going great, stocks are sold at their highest rate. When the market goes down, you can still buy shares of stock but at a deep discount. Then, when the market goes back up, you can share in more of the growth.
Remind Yourself That the Market Always Goes Up
A few years ago I read a book called The Simple Path To Wealth and it changed my life. In it, the author teaches that the stock market always goes up. There are some years when it’s down or the market recorrects itself. But historically, it always goes up. This means, if you’re investing in the long run, you’ll want to stay motivated to continue no matter what.
In 2008, we entered a recession and some investors thought things could never get better and sold their investments. Well, guess what? The market recovered just like it did during previous slumps and recessions.
One of two years is just a small blip when you think about the growth your portfolio will endure if you commit to investing for the next 40 to 50 years.
Take Time to Learn More
One of the best ways to stay motivated when you’re investing is to commit to learning more about the market, portfolios, and this whole world. Instead of worrying about your investments or letting the news reports play on your emotions, hunker down and start learning the facts.
When the market is down, it’s the perfect time to take a course, read a book, or learn from an digital resource about investing and what your options are. Learn about terms like a Bear Market (which is what we’re in now) vs. a Bull Market (which is what we’ve had the past few years as the markets experienced a ton of growth).
Sometimes, your brokerage might offer free webinars or training materials to help answer your questions and educate you on investing. When you learn more about investing, you’ll feel more motivated and confident in your decisions.
Visualize Your Future Life
We’re all investing with a goal in mind. Think about your ultimate goal and how investing can help you get there. Visualize your future life to help you stay motivated when you’re investing. Do you want to own rental properties? Are you planning to travel more often when you become financially independent?
What will a typical day look like during retirement? Do you want to read books all day, hike, or volunteer?
Visualizing your future life can help you refocus back to your original ‘why’ when it comes to investing. Emotions don’t really play a nice role in the process when you’re making investment decisions, but the reason why you’re investing in the first place can be a motivating emotional reason to secure your financial future.
Sometimes, when you’re stuck in the routine of sacrificing to make 401(k) contributions or have been watching the market go down for months, it can be difficult. It’s important to stay motivated when you’re investing.
Investing is a marathon, not a race. There will be ups and downs, but it’s usually well worth it in the long run. The contributions you make today will be like seeds you’re planting that lead to a great harvest someday.