How Much You Invest Doesn’t Matter!

Good morning!

Earlier this week, I posted an Ask Wealthy Joe question from someone who wanted to start investing but was unable to come up with the funds to do so out of her regular paychecks.  I advised her to use 20 percent of her income tax refund.

Now, suppose your tax refund is $1,000.  20 percent of that is $200.  That’s not a lot of money, and I know that some of you are wondering why you should bother if that’s all you have.

I know this because in The Stock Market is For Everyone, I suggest to people that they begin with a small amount out of every paycheck, and I have been asked how that could possibly make a difference in one’s financial future.

There’s a misperception that you need a lot of money to start investing.  That is NOT THE CASE!

Here’s the thing: The most important factor in your success as an investor is the performance of the asset class – in this case, the stock.

I said this the other day when I was talking about how people make the mistake of choosing penny stocks because they can get more shares for their money.

“What would my little $100 do?” you ask.

Well, the answer is “it depends.”

If you invest in a company that doesn’t perform, then your money won’t grow very much.  That’s the same whether you invest $100 or $100,000.

For example, let’s say you bought one share of IBM (NYSE: IBM) in 2006 at $82.20 a share.  That investment would be worth $136.80 today.  That would be a 66% return over 13 years.

Let’s compare that to buying one share of Apple (NASDAQ: AAPL) in 2006 for $71.89.  That investment would now be worth $1669, or 23 times your investment.

Get it?

Obviously, the more you have to invest, the more you can gain.  I encourage you to invest as much as you possibly can!

However, the performance of the stock trumps the amount you invested.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click here to be taken to its Amazon page.

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)



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