The following is a guest post! The Banker’s Umbrella is a private banking blog written by a European banker who blogs anonymously and refers to himself on his site as “The Banker”.
This isn’t some pie in the sky promise. This is fact, the real McCoy- the whole enchilada. I’m not going to spill some theory of investing on you now, but if you do as I do, you’ll make 20G large. It really is that simple, and I’m not trying to sell you something either.
I know most of you reading this blog are about the age I was when I got started at this, so to prove my point, I will use one of my own personal investment accounts as proof. So let’s get started. To begin you’ll need a hundred bucks, a C-note. No not for me, I’m not charging anything here. For you, you’ll need a hundred bucks as your first investment.
I’ll give you the story of how I did it and you can then follow. And once you’ve got the 20G in the bank you can take me out to dinner. Deal?
So once upon a time in the year of our Lord 2004 a.d., there was a young chap, he had all his hair, a little less weight around the middle than now, and he was full of life with a buoyant spring in his step. He had just gotten his first job in a bank, in a typical old-fashioned branch office in the burbs. He wasn’t making much, but at least it was a job. He was earning a little under 2k a month before taxes; not exactly rolling in it, but he was earning above minimum wage and a little below the national average wage.
Once he knew he had a regular income coming in he set up an investment account, and invested in a basket of mutual funds. He made a direct debit agreement with his bank for 100 dollars from his monthly pay-check, which immediately transferred into the mutual funds. Then he did what they do in Brooklyn: fuhgeddaboudit.
Yes, it was a large chunk of his pay, but since it went directly from his wages he didn’t really miss it. He thought there were plenty of people earning less than him so 100 a month was something he had to be able to live with.
So let’s fast forward to today, March 2013. All-in- all our young chap who is not so young any more, but certainly not an old fuddy-duddy, has placed 14,100 in those funds during the nine years he has had it (every now and then he’s put an extra hundred in there, hence the slightly larger sum).
As of this day of writing,that account stands at a value of 19,723. Not bad. Up 41%, pretty neat eh? If you annualize the return it comes out at about 5% per annum. Not too shabby for doing nothing at all.
So what started with a 100 has turned into 19,723 in under a decade.
I have several friends who I managed to talk into doing the same with their accounts (these were not finance professionals). Each and every one of them, whenever I see them thanks me profusely for getting them involved. I know one who has liquidated his investments two years ago to buy a classic car he really wanted. Each time we meet he has a massive smile on his face and thanks me for the car.
Please, please, please. Do this for yourselves. There is no magic here. What I am telling you to do even has a boring name: dollar cost averaging. The idea is that when the markets go down, you get to buy more units in the mutual fund and when it goes up you buy less. In essence you are buying when the markets are low and buying less when they are high. Avoiding the old mistake of buying high selling low. The results after a few years will astound you.
I’ve been in the investment business a long time and I can say this strategy is employed by only 1% of investors. Of those 1%, 100% have a) profited and b) are happy they did it. That means each and everyone!
Go on, join the 1% and become 100% happy with your investments. You will end up owing me dinner. That’s a guarantee.