Oct 21, 2024
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When you’re investing in the stock market, the cost of your investments matters.
If you pick individual stocks, especially through a broker, these investments cost more — and your advisor will keep a larger share of the earnings.
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Warren Buffett, who has made his wealth through shrewd and safe investments, has always advised the average investor to trust index funds. They are inexpensive and are more likely to outperform stock picking.
Buffet says, "If returns are going to be 7 or 8% and you're paying 1% for fees, that makes an enormous difference in how much money you're going to have in retirement."
To keep as much of your wealth in your accounts as possible, sticking to passive investing could be the right choice for you. Below, we offer our best tips to build your nest egg — ones we think Buffet would approve of.
How much you invest isn’t as important as how often you invest
In a CNBC interview, Buffett advised viewers that even if you can’t make big contributions, the point is to keep investing regularly. No matter what, and no matter how small the amount.
As Buffett stated, “I think it’s the thing that makes sense practically all the time.”
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That’s because, with the way that compounding interest works, even small contributions will grow your money over time — Leaving you with a surprisingly hefty nest egg by the time you retire.
With Public, you can easily buy and trade stocks, options and exchange-traded funds (ETFs).
Public not only offers commission-free trading but also provides a high-yield account where you can park your cash between investments. Public also has social features, enabling users to follow and learn from other investors, share ideas, and stay updated on market trends with real-time insights — kind of like its own internal Reddit community.
While modern investing platforms make it easy to access the stock market, inflation is making it harder than ever to find room in your budget for investing and saving. Trying to budget and set aside a few dollars here and there, let alone a few thousand, can feel almost impossible.
But that’s exactly what Acorns is designed to help you do. Acorns is a mobile app that automatically invests your spare change for you, so you can reap the benefits of compound interest with recurring investments.
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It’s simple: As you spend on bills and daily essentials like gas and groceries, Acorns rounds up the price of each purchase to the nearest dollar. The change then goes into a smart portfolio, growing all the while.
Tp help you get started, Acorns is offering a $20 sign-up bonus for a limited time.
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New ideas for safe savings vehicles
If you’re committed to being a safe investor like Buffett, there are other options outside of stocks and commodities that you can use to grow your wealth.
You can shop around to find the best savings options with the Moneywise list of Best High-Yield Savings Accounts of 2024 to compare your options and start building your retirement or emergency fund more efficiently.
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The Moneywise Editorial Team is a group of passionate financial experts, seasoned journalists, and content creators who are deeply committed to providing unbiased, relevant, and accurate financial information. With years of combined industry experience, our team is dedicated to maintaining the highest journalistic standards and delivering informative and engaging content. From personal finance and investing to retirement planning and business finance, we cover a broad range of topics to suit the financial needs of our diverse readership. You can trust the Moneywise Editorial Team to empower you with the knowledge and tools necessary to make wise financial decisions.
