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Mississippi Money: How to Think About Investing

Is now a good time to invest?

After reading last month’s column, you got your spending in line and your emergency savings topped up. You understand the risk and know the rewards of investing in stocks. So you pull up some information about investing and are shocked by what you see! The market is too high! It is too low! It’s all over the place! So you turn to your trusted advisor and ask: is now really the right time to invest?

The answer depends far more on you and your goals than on what the market is doing.

Investing in stocks is how we reach large, long-term goals. If you have large, long-term goals, investing may be a solution for you. Here we are talking about investing in stocks, bonds and cash – plain vanilla investments available to any investor. I’ll use an example throughout assuming a modest 6% investment return and a 40-year timeline.

At the start of your career, you realize that you will need to save for retirement. Be aggressive and focus on being consistent with your savings. As you are just starting your account, market volatility has minimal effect on your net worth.

After 10 years of saving consistently, if you have earned an average of 6%, the earnings on your investment account will start to outweigh your deposits. Finally – you will start to see the growth picking up! Your account is less than 10% of your target amount so keep saving and focus on your long-term returns.

After 20 years of saving and investing consistently, pat yourself on the back! Half of the money in the account will be from deposits, and half will be growth. Your money is really working for you now. You’re now halfway (in time) to your goals. Your account is still only a quarter of the way, and with twenty years to go, you can remain fairly aggressive in your investing.

After a 40-year career, on the doorstep of retirement, all of your diligent saving and investing is set to support you. Unlike your twenties, you are now quite concerned with the direction of the market. All of the money you will ever have is in this account now! The stock market has rewarded you immensely as seventy five percent of the money in the account is growth on your deposits.

Investors who plan to live out of their portfolio need to invest more conservatively as they approach that point. Include bonds and cash that will support your withdrawals even if stocks suffer losses. Keep in mind – over long periods, stock market returns are overwhelmingly positive. While a stock market crash during your retirement party is unfortunate, a prudently invested portfolio can weather that storm.

The stock market is not where you go to get rich quickly. It takes time for returns to build and surpass the money that you earned the hard way. With time and disciplined savings, your investments can support you.

About The Author

Ryder Taff

Ryder Taff currently lives in Jackson not too far from the home he grew up in! After graduating from the University of Bristol (England) he came home and started working at New Perspectives, Inc, an investment advisory that he is now a shareholder in. With his passion for education, he focuses on getting everyone from young professionals to families to retirees into excellent financial habits. You can reach him at

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