So a couple of weeks ago I wrote an article about how the stock market tanking wasn’t really that big of a deal and not a huge cause for concern.
I know everything that’s been going on can seem scary and I would totally be lying if I didn’t say that there were moments when I wasn’t a little freaked out myself.
It can also be scary from a financial perspective. And even if you were invested in good mutual funds and didn’t really have anything to be worried about from an investing perspective, the truth is, people have been let go from their jobs during all of this. When the rug is pulled out from under you, it’s a very real reason to be frightened and scared.
Everyone should be doing an assessment of where they stand financially right now.
If you’re someone who’s lost a stream of income in your household during COVID-19, then you’ve got to switch into preservation mode. For you, it’s all about cash. You want to save as much cash as you can. If you’ve got an emergency fund, then you’ll be able to use that as things get tight. It may be that the stimulus checks coming our way will significantly help you stay on track. But spending should lock down in emergency mode right now if you’re in this boat.
Take care of your home, take care of your utilities, and take care of getting food on the table still.
If you’re like Katie and I, the good news is that we aren’t going to have any trouble with our income. Being both teachers, we are confident in our job security. Now I know that no job is 100% secure, but I’m confident enough that it isn’t a worry on my mind.
However, even if you aren’t concerned about continuing to receive a paycheck, you might still be wondering what the right money moves are right now. If you aren’t worried about your job, and you have enough cash to handle an emergency, then you really should be investing right now.
You actually have a great opportunity to make a lot of money in the market right now. And I’m not talking in a sleazy, you’re gonna get super rich right now if you pick these hot stocks, I just mean that as the market rebounds, it’s super smart be be investing and going along for the ride as it goes back up.
Why Investing Is Your Top Priority
Investing always needs to be at the top of your money plan. It doesn’t really matter if we’re in the middle of a pandemic and you’re looking to take advantage of the stock market when it’s low or if the stock market is booming and you have this sinking feeling that you’re missing out on big gains.
Investing has always been about playing the long game with your money.
I still remember when my trumpet teacher told me in college that because of investing, he was planning on retiring a millionaire.
It was the first time I had ever heard of the concept of a teacher becoming a millionaire during their lifetime.
Yet it happens all the time.
One of my favorite authors in the world of finance was the late, Thomas Stanley, who’s books The Millionaire Next Door, and Stop Acting Rich dive into who the millionaires in America really are, and what they did to get there. More recently, Chris Hogan wrote Everyday Millionaires which explores the same subject.
Both authors make the case that the everyday habits of regular folks who consistently saved, didn’t over spend, and lived well within their means enabled them to become millionaires.
The truth is, the same could happen to you.
Which is why, the most important things you can do with your money includes first spending less than you make, and then saving a portion of that money by investing it in the stock market.
Before you can enjoy your money for today, you must be saving it for tomorrow. Your retirement will come. Even if you absolutely love what you do, most people do end up retiring at some point. And when you do, you’ll want to make sure that you’ve saved enough to be able to enjoy those years.
When Investing Is Not The Priority
Investing is the first stop for your money. Before it goes to anything else, you’ve got to be investing. It’s the most important step.
Except when it’s not.
If you’ve made the conscious decision to put your investments on hold to aggressively engage a goal, then you can momentarily stop investing.
This advice comes from Dave Ramsey, who has helped millions of people get out of debt with his books, courses, and radio show.
Dave gets knocked a lot for his advice that doesn’t always make mathematical sense.
For example, he says to put investing on hold while paying off all non mortgage debt. He gets yelled at quite a bit for this piece of advice, among others.
But what Dave has become a master of, is behavior. He knows that if you can get mad enough, and aggressive enough, that you can pay off all your non mortgage debt and be debt free as quickly as possible.
When you pause investing to pay off your debt or build an emergency fund, that extra money that isn’t being invested allows you to move faster.
Personally, I think Dave is great, and he’s helped a whole lot of people get out of debt.
So here’s the thing. You need to be investing from the day you start your first day at work, until the day you retire. Unless, you are obsessively working to get yourself out of debt and build an emergency fund. But you need to be diligent.
If you aren’t being focused and intense to reach your goals of getting out of debt and building that emergency fund, then you can hang out in this land for far too long, and then wake up and realize that you’ve been out of the game for longer than you meant.
I know this has been a point of struggle for us. We got used to not investing to build up cash, but then struggled to start investing again because we allowed our margin to get too slim.
I think that this is a real danger spot, and an easy way to lose momentum. So if you’ve decided that you’re going to intensely attack that debt, do it! But get through it so that you can get back on track.
The Take Away
So you must be investing, unless you aren’t, in which case you need to scratch and claw and fight your way through that land as fast as humanly possible so that you can start investing again.
Not sure where to begin?
That’s totally understandable. That’s why I’m here. My goal is to distill the information down into what you should be doing.
If you need to brush up a little on where you should be investing your money, check out an article where I cover that topic here.
But in the meantime, how are you feeling about investing right now? Is it something you feel nervous about, or do you feel pretty confident in the knowledge that the market will return?
Remember, this site was built for you, so make sure that you let me know, by replying to any of my emails.
Disclaimer: All investing is subject to risk. I am not a financial professional. The ideas contained in this blog are strictly for educational purposes without knowledge of your individual situation. You assume full responsibility for any actions you take.
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