News Flash: Investing Won’t Grow Your Wealth If You Don’t Do These 3 Things | Personal finance
Large investment portfolios also keep fees to a minimum. There’s no way you can avoid them entirely, but there are plenty of solid investments out there that will cost less than 1% of your wealth per year. Follow them whenever possible. Paying 1% of your assets might not sound like much, but with a $ 1 million portfolio, it means you have to give up $ 10,000 a year – that will surely dampen your nest egg growth.
Index funds are a great way to diversify your portfolio while keeping your costs down. These are bundles of stocks that mimick a market index like that S&P 500. They tend to produce returns that are close to those of the index itself, and since the stocks in the fund don’t change very often, fund managers have less work to do. They can pass these savings on to you in the form of lower fees.
Even if you follow all of the above steps, you may not have a smooth road to wealth. Investments are unpredictable, but if you start slowly and commit to learning more, you should see progress over time.
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