Here’s the thing….
I started saving immediately as I started working.
But imagine I’d just saved that R25,000 extra, and invested it in 2010.
That R25,000 saved – and invested in my own Red Hot Penny Shares tips each year – would’ve turned into R429,953.50 by the end of 2021.
If you applied the average growth the Red Hot Portfolio’s seen over the last decade to the R25,000 it will be worth R3.96 million by 2030.
Simply put – NEVER think that you are starting too small. We all need to start somewhere, and soon can never be soon enough… Imagine an extra R4 million in your bank account today – if you’d decided to save up only R25,000!
My New Report available now: Five Shares to start your Million Rand Portfolio.
Investment Idea #2 – Investing means you have to take a leap
It’s not easy jumping into the unknown. None of us like losing, or risking the possibility of a loss. But the fact is, every investment we make means the need to take that risk.
But the fact remains, investing is as much an act of faith as starting a business.
You may have done your market research, know about the best products and looked at historical returns. But past performance doesn’t determine future performance. As I said above, no one can predict the market. You invest and trust that your returns will grow to what you need them to be.
Of course, there are ways to mitigate the risks with investing. Diversify your accounts, adjust your holdings as you age and avoid high fees. These are all ways to hedge your bets in the market.
But at the end of the day, you still have to take that leap. Without risking something, it’s impossible to make anything. So, don’t let your fear of losing get in the way of winning.
Investment Idea #3 - Don't change your investment goals just because markets are volatile
When markets are trending downwards or are moving around substantially, it's tempting to change your investment strategy or reconsider your objectives. A better approach is to be consistent in your strategy. Of course, it's important to regularly review your strategy, ideally with an adviser, but try to avoid kneejerk reaction investing.
I started out investing in the Great Recession during 2008/2009. At the time it seemed scary, investing in a crashing market. But the fact is, there’s no better time to invest than when strong companies are at multi-year lows.
Right now we’re seeing many small cap companies trading at dividend yields of 10% or more, other companies on Price Earnings ratios of below 5, and some trading at 50%, even 70% discounts to the underlying values of the companies.
Now that’s a good time to invest!
Investment Idea #4 – Don't have a herd mentality
This is one of the most important qualities billionaire investor Warren Buffett says great investors should have. Following the crowd into the latest "hot stocks" or other assets like bitcoin just because everyone else is buying them is a poor way to invest. In other words, popular opinion should play no role in your investment process.
You should follow a process or a system. Invest accordingly – if it happens to be in a popular investment, then there’s no issue. But it shouldn’t be simply because of a popular choice.
The herd opinion is that the markets are tough right now – it’s not a great time to invest…
But investing in undervalued, high performing small caps right now could be the difference between beating the market, and getting beaten by the market…
Investment Idea #5 – Only use debt to grow your income
We grow up in a world of credit cards, short term loans and all kinds of easy debt.
Don’t buy an expensive car at 22. Don’t use your credit card to buy furniture.
And don’t continually live off debt.
Rather – use debt and loans to start and grow businesses, buy investment properties and other things that improve your cashflow.
Right now we’re experiencing rapidly rising interest rates, and they could be a further 1% - 2% higher before next year is out. Make sure to pay off your high interest debt as soon as possible.
If you have to use debt – use it to buy an income generating property, or to grow your business.
It’s never too late to start investing, or to learn more. The secret simply remains to do it as soon as possible.
PS. Every portfolio needs that one in a million stock… And I think I may have found it! It's selling for less thanR2 and I expect it could generate 741% in the coming years. If you’re serious about getting started investing then you need to start here.