Empty vessels make most noise, and that’s certainly the case with cryptocurrency Bitcoin, and the biggest empty vessel of all, the National Lottery. Both turn up the volume but in reality have little to shout about.
Turn down the noise
Yes I know they have made millionaires and, in the case of Bitcoin, even billionaires. But the odds are massively against it being you. Bitcoin may have leapt almost 20% this year, to $8,300 at time of writing, but its volatility makes it too risky at today’s higher entry price.
As for the Lottery, it’s a 14m-to-one shot that almost certainly won’t come off for you.
I reckon the best way for ordinary people to a build a juicy sum like, say, £1m, is to invest in the stock market. It won’t make you rich overnight, but over the years, it can certainly transform your life.
The easiest way to invest is to pay a regular sum out of your earnings or salary every month. January is a good time to set up a monthly investment plan, because that way you’ll have made at least one practical New Year’s resolution.
Paying in money every month has several advantages over randomly throwing in lump sums whenever you have money to hand.
1. It’s open to more people
Not everybody has, say, £5,000, £10,000, or £50,000 at their disposal. That’s fine. With a regular investment plan, you can start from as little as £50 a month although, ideally, you should pay in more than that if you can.
You can invest online cheaply and easily, choosing from a range of low-cost Stocks and Shares ISA providers, to make sure that more of your money goes to work.
2. You don’t have to worry about a crash
If you pay in a large sum, you always have the worry that markets could plummet the next day, and you will suddenly find yourself down several thousand pounds. That’s not a problem if you pay in, say, £100 or £200 month after month.
In fact, you’ll actually benefit if markets have fallen, because your regular monthly sum will pick up more stock or fund units. Then when markets recover (as they always do, given time), your money will ultimately be worth more.
3. You don’t have to think about it
If you set up a direct debit, the money will come out of your bank account every month, without you having to do anything about it. You will quickly get used to that and moderate your spending accordingly. Soon, you won’t even notice it leaving.
However, that doesn’t mean you should forget about it altogether. You should increase your monthly investment whenever you can afford it, and especially if you’ve had a pay rise, to be sure your money keeps growing.
Plus of course you can always pay in a lump sum as well, if you have one to hand.
Investing is a long-term game. Setting up a regular investment plan makes it as pain-free as possible. You will get rich, albeit quietly. Which is actually something to shout about.