5 Tiny Investment Moves That Can Make You Richer Than Having a Job

Mature financial consultant advising a happy young couple while using a laptop.
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With the exception of winning the lottery, hitting a casino jackpot or getting extremely lucky on a speculative stock, there are few investments that will make you rich overnight. But here’s a trick that most of the “get-rich-quick” crowd overlooks: the true secret to building wealth is to make tiny investments over time and watch them grow. Eventually, even small investments can end up making you richer than having a job.

You’ll certainly need patience, diligence and time to achieve success this way. Perhaps even more important, you’ll need the discipline to stick with your “slow, boring” investment plan and avoid the bright, shiny objects that try to pull you into more speculative ventures. Here’s a look at how even tiny investments can make you rich, along with suggestions on how to stick to the path.

Listen to Buffett — Buy the S&P 500

People around the globe obsessively listen to Berkshire Hathaway CEO Warren Buffett‘s comments at the company’s annual meeting. Why? Because as the fifth-richest person in the world, with a current net worth of around $114 billion, Buffett always drops some investment wisdom along with his homespun charm.

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So what does Buffett suggest is the best choice for the average investor? That’s right — simply drop your money into a low-cost index fund, like an S&P 500 index fund. According to Buffett, investing is actually a “simple game.” All you have to do is “consistently buy an S&P 500 low-cost index fund. Keep buying it through thick and thin, and especially through thin.”

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Don’t believe this simple proclamation? Take a look at the math and you might change your mind. If you put just $100 per month into an S&P index fund from age 20 to age 65, you’d end up with more than $1 million in your retirement account, assuming an average 10% annual return. That seems too easy to be true — and too tiny of an investment to make — but the numbers certainly support Buffett’s contention.

Boost Your Contributions

Anyone with an income should be able to tuck away $100 per month for their retirement, although it may be a hard adjustment at first if you begin at age 20. But as you grow older, you should boost your contributions right along with your income.

Don’t fall victim to “lifestyle creep,” the tendency to spend the extra money that you earn rather than investing it. By boosting your contributions, you’ll make it that much easier to become rich by the time you retire. This is particularly true if you take advantage of tax-deferred accounts like 401(k) plans, in which you can not only get a tax deduction for your contributions but also trigger matching contributions from your employer.

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Put Your Investments on Autopilot

In spite of your best intentions, there are likely to be times when it becomes harder to keep up with your investment program. Whether your cash flow gets squeezed or the market sells off and scares you away, there are times when everyone wonders whether they should “temporarily” reduce or eliminate their savings contributions. But the problem with this is it’s too easy to “forget” to restart your investment plan. 

To avoid the emotions that can block a long-term investment plan, put your contributions on autopilot. Have your employer or bank automatically deduct money from your paycheck every month and automatically divert it to your investments. Over time, you likely won’t even notice those deductions, and consistently adding to your investments in good times and bad will do wonders for the size of your account over the long run.

Trim Your Discretionary Spending and Invest the Difference

To really become rich, you need to adopt a wealth mindset. When you have a wealth mindset, it’s easier to forgo short-term pleasures for long-term riches. Rather than spending all of your discretionary income on things like vacations, dining out and designer clothes, trim some of those extravagances and funnel the money instead to your investment account. The long-term changes can be mind-blowing.

Imagine, for example, that you start investing at age 20, but instead of socking away $100 per month, you cut out some of your discretionary expenses and instead put away $200 per month. That $1 million nest egg at age 65, assuming the same 10% annual return, would double to more than $2 million. That’s a great way to become rich with just a minor adjustment to your lifestyle.

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Channel All Your Windfalls Into Your Investments

Even if you can’t find a way to trim your expenses, there’s another great way to boost your long-term wealth — channel all your windfalls into your investment account. Windfalls are unexpected sums of money that you weren’t planning on using for your daily expenses, such as tax refunds, year-end bonuses and inheritances. Rather than simply blowing this “found money,” divert it to your investments instead.

Since you weren’t counting on that money to begin with, don’t be tempted to use it now. Using your wealth mindset, imagine instead how it can help make you rich in the future.

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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