For ordinary investors like us, the goal is often to “grow our money with as little risk as possible.” But is there really such a method?
I once heard a story from Mr. M, who came for a financial planning consultation.
Mr. M had been investing $500 every month for seven years since 2015. In total, he had allocated $42,000 to asset management, and he said, “That amount has now grown to about $62,000.” This works out to an annual return of around 11%.
During those seven years, Mr. M didn’t face any significant risk of losing his assets, nor did he suffer the stress of worrying about his investments. The money was automatically deducted each month, and Mr. M simply managed his life with the remaining funds. By the time he realized it, his assets had grown.
I believe this is the approach that ordinary people should take: building wealth gradually over time. For those who don’t have large sums of money, making time work in your favor is the best strategy.
Of course, Mr. M’s story is about the past, and there’s no guarantee that the future will unfold the same way. However, if he continues this investment strategy for 30 years, his assets could grow to $1 million.
Over the course of 30 years, many things are likely to happen. You may face increased expenses due to marriage or raising children, or you might even experience periods of unemployment. Nevertheless, continuing to contribute $500 each month should not be an impossible amount.
The “take your time” method I recommend might seem simple at first glance. But in reality, it’s a path that only those who can weather the ups and downs of life and stick with it will reach.