Day 28: The Best Way to Invest Your Money with Dollar Cost Averaging

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This post in particular is not about a side hustle.  However, the concept and knowledge that you'll learn today are so valuable that, even without a side hustle, simply practicing this method could lead you to be a millionaire.  

Now, don't click away if you've never invested before.  I promise it is not as scary and foreign as it may seem.  The type of investing we are talking about today is much smarter and safer than the investments you've probably heard of like real estate, day trading, or stocks. This type of investment has the highest chance of making you a millionaire.

I will say that while on my journey to becoming a millionaire before age 30, there were parts that I got lucky.  There are also parts where I worked hard and made smart decisions.  Hopefully, after reading this post, you will be able to walk away and make the same intelligent choices I did that got me to where I am today.  

If I didn't implement this concept into my side hustle years ago, I would be broke.  I might have had a lot of flashy things but I would still be living paycheck to paycheck.  The moral of the story is that, in my lifetime, I am going to make a lot of money — I already have.  That being said, this strategy will make me more money passively than I could make actively.  How, you ask?  Well, today I’m going to teach you how to make your money make money for you.  Sounds pretty cool, right?  


Disclaimer:  Because I am talking about money, I need to make it clear that I am not a financial advisor; I am not certified by any financial board.  Please take this information at your own risk as I am simply speaking from my own experiences.   My experiences come from being broke and learning how to make money through trial and error in hand with reading a variety of books along the way.  If you're okay with this, please continue.  If this bothers you and you’d rather learn from a certified advisor, then please ignore this post.  


The Strategy

Right now, especially, the market is going crazy (at the time I’m writing COVID is happening).  Regardless, this is the only strategy you should ever use when investing.  Currently, day trading and getting rich quickly has spiked the interest of many.  The problem with this is that, as I said, even the greatest minds cant plan which way the market will go.  Nobody can predict the future. 

And so, I bring to you dollar cost averaging.  Your future millionaire self lies within these three words.  Here’s how it works… 

Dollar cost averaging is where you invest the same amount of money, no matter the state of the market, each interval (usually monthly).  You will be participating in both the lows and the highs.  Say in Month 1, the stock market is high and your $100 monthly investment can only buy you 1 share.  Then in Month 2, the stock market goes down.  This time your $100 can buy you 2 shares.  Lastly, in Month 3 the market goes back up and your $100 buys you only 1 share.  After 30 years of doing this, I promise you’ll have earned a nice chunk of change. 


Don't let this happen to you… 

Dollar cost averaging sounds insanely simple, right?  The only problem with dollar cost averaging doesn't have to do with the strategy but rather with the investor.  We are human and we have emotions and mental barriers.  When the economy is low or volatile, it can seem dangerous to invest in something whose value has just depreciated — I get it.  It may seem like a grand idea to cash out while you're up and invest back in when it’s low.  However, if you were smart enough to do this, you would already be a billionaire.  I’m not smart enough to time the market and neither are you.  You would be much better off riding it out and ensuring yourself the growth that is bound to happen on the way back up.  

The moral of this lesson is that if you are currently trying to time out when to invest your money, you are going to lose.  You are going to sit on the sidelines until you get to play.  And once you get to play, it’s going to be the most expensive time.  

If you need a second opinion, look to Warren Buffett!  Yes, even the seventh wealthiest man in the world uses dollar cost averaging!  He suggests using ETFs and index funds to do so.  


Take Action

I use a platform called Vanguard to do my dollar cost averaging.  There are lots of other platforms out there too that you can find with a quick Google search.  From here, you’ll need to set up a Roth-IRA, a 401k, or maybe both!  Once again, Vanguard is great for these accounts.  All you need to do is enter in your goals, when you want to retire, how much you make, etc.  Vanguard will generate a portfolio where you can set up automatic monthly contributions.  And just like that, you're dollar cost averaging! 



If you have any questions about dollar cost averaging that I didn't cover in this post, drop a comment!  I’d love to help you out. 


Thank you so much for watching.


Peace.  

 

For the complimentary worksheets and resources, go to adrianbrambila.com/30days.

I make new content every single week, so be sure to subscribe to my Youtube and follow my Instagram @brambilabong and TikTok at @AdrianBrambila. I also have tons of resources and courses on my website that you won’t want to miss. Head over to www.adrianbrambila.com to learn more about what I do and how I live a financially free life.

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