It was during a presentation for my speech class that I realized no one knew about investing or better yet they never heard of the term “The Snowball Effect.” I remember doing a power-point presentation and having my audience’s eyes light up of the possible opportunities that they were missing in life.
You see, I began my investing journey a little late, but it’s never too late to start.
At my previous job, I had a 401(K) retirement account. My retirement money was invested with a company that didn’t have my best interest and was taking money away from me on fees. You have to be very careful who you trust with your money. When I left that job, my new job did not offer a 401(K) investment plan, so I decided to invest my previous 401(K) money into the stock market. I also open a separate IRA account as my new way to invest in my future. Since my current company didn’t provide me with a 401(K), I had to be responsible for continuing to pay myself and saving for my future retirement goals. If your company doesn’t offer a retirement plan, it is your responsibility to do this for yourself.
I have a rule with myself every time I earn more money. I don’t pretend I have more, which stops me from spending more. I don’t change my lifestyle at all. Instead, I invest that extra money and live within my means. And that was precisely what I did when I got my new job! I open a new IRA account, and I invested my previous 401(K) in the stock market. Stocks that offer dividends, and also invested in companies that are great companies who might not provide a yield but are an excellent balance to my portfolio. Never put all your eggs in one basket!
Disclaimer: Always make sure you do your research before investing in anything. I’m here to share with you what has worked for me, but this might not work for you, so please do your research.
What is the snowball effect? The snowball effect of investing is a metaphor for compounding interest on your investments. The idea is that you start with a small snowball, and with time the snowball rolls down, and it gets bigger. That is why it is important to start young. I wish I had discovered this information during my teenage years.
Here is a smart video to paint a perfect picture for you. https://youtu.be/wf91rEGw88Q