My philosophy stresses how simple it can be to make $1M or more on your own. Now, of course, I don’t mean to say you will make a $1M tomorrow, or even in 10-15 years. Investing is about the long-term, and that is true when it comes to 401(k) investing, as well. But even with that said, many folks still seem to have outdated misconceptions that achieving wealth is hard to do. But there is so much access these days to get you started on your DIY investing journey. And your 401(k) is the best place to start on your journey as a DIY investor.
How do you become a DIY investor who’s geared to make $1M plus in the long term?
- Internalize the right values. Taking care of your financial self is totally in your own hands now-a-days. Pensions are a relic of the past, and with the rise of the 401(k) you are in full control of how much and how to contribute and invest to reach your financial goals. At the root of any behavior are values, and to be self-sufficient when it comes to your investing in general and 401(k) investing in particular, you’ll need to internalize the values of fiscal responsibility and financial literacy to ensure your actions are prioritizing and planning your financial security for your retirement. Other values such as long-term thinking and staying calm when times get tough will set you on the right course, too.
- Cultivate financial self-education. You can’t just rely on values to become successful. You’ll need to supplement those with the right knowledge. The good news is that there’s an abundance of information out there to learn from for free, including digital tools to help you out. With regards to your 401(k), your plan provider will most likely have a host of free information you can read up on to get you started and sustained. Learn the building blocks of investing such as stocks, bonds, mutual funds, asset allocation, diversification and the time value of money and you’ve already covered a large chunk of the foundation you’ll need to know. Take it to the next level and learn more about dollar cost averaging, index fund investing and rebalancing and you’ll be properly well educated for $1M plus wealth.
- Act now and adjust later. The saying goes to always think before you speak, which is true, and that holds in general for actions, as well. But as a DIY investor you don’t want to over-think and end up losing too much time. Time is your most precious asset when it comes to DIY investing. Instead, once a you’ve built the values and education, act on your financial goals. For example, set up your 401(k) today, contribute as much as you can, and invest in the lowest cost equity funds. With those actions set in motion, you’re already well on your way to $1M success. Adjust and respond afterwards as you monitor progress to improve your portfolio.
Want to learn more? Pick up a copy of my book …
From Millennial to Millionaire: DIY 401(k) – 5 Do-It-Yourself Steps for the Digital Generation to Design and Manage their 401(k) on Amazon.