How This Financial Influencer Finished Saving for Retirement at 31
Written by
Tiffany Lew
Edited by
Zuri Anderson
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The steps to take toward saving for an early retirement might be simpler than you imagine.
Financial influencer Shang Saavedra shared in an Instagram post how she finished investing for retirement at 31 and explained that anyone can also be an investor if they understand a few key topics.
She said it took an understanding of just a handful of concepts to achieve her retirement goals.
Invest In What You Know and Love
Similar to the old adage of “Write what you know,” this piece of advice focuses on starting with what you’re familiar with and where your interests lie. Investor Peter Lynch popularized this philosophy that’s rooted in your own intuition and familiar companies.
Saavedra said a Wall Street executive Janet Hanson went to her college class and yelled into a microphone, “You already buy things you love. So why not invest in what you love?”
Learn How a Company Makes Money
“If you don’t believe someone can make money… then don’t invest in it,” she said.
She pointed out that this idea isn’t always intuitive. She gave the example of rental car companies, which may make a lot of their money from selling cars.
Having this knowledge can help you make empowered financial decisions. And remember, every company has a business plan, so familiarize yourself with its ins and outs.
Understand the Difference Between a Bond and a Stock
A bond is debt, while a stock is ownership in a company’s profits, Saavedra said. They represent two fundamentally different types of investments with stocks coming with the potential for higher growth but also greater risk. Bonds generally have more predictable returns with less risk.
This basic knowledge is very important, she said, because they are the two largest asset types you can invest in.
Read, Read and Read Some More
Saavedra spends 30 minutes reading various newspapers every day.
“All of the best investors I know read voraciously,” she said.
Warren Buffett spends 80% of his day reading, according to Inc., and he has suggested people read 500 pages a day to achieve similar success as him.
Know That No One Always Gets It Right
While investors can avoid making some big mistakes, Saavedra reminded followers that “no one can predict the future.”
For instance, even seasoned investors could not have detailed the economic situation under President Donald Trump’s administration. The hard part of investing is making decisions without having all the information.
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