How do you get better investment returns?
When most people think about this question, they immediately think about what they’re investing in: which stocks, which markets, which bonds or GICs.
And to some extent, getting this right matters. Setting up a diversified, low-cost portfolio is essential.
But once you’ve got the basics covered, there isn’t a lot you can do to get above-average returns, and in fact, most people who chase high returns (with crypto or meme stocks or buying on margin, etc.) almost always take on way too much risk and end up underperforming in the long run.
Instead, you should focus on the variables where you have more control: how much you have invested and for how long.
And here the basic idea is simple: you want as much money as possible invested in the market for as long as possible.
How do you do that?
1. Start saving and investing early.
2. If you didn’t start early, start now.
3. Automatically save a portion of each paycheck.
4. Increase how much you save every time you receive a raise or get a higher paying job.
5. When you’re young, try to keep expenses low (live at home, drive the same car til it dies, etc.) and save as much as you possibly can.
6. When you make overtime or receive a bonus or a tax refund, invest some of it rather than spending it all.
7. Don’t be in a rush to pay down your mortgage when you could invest instead.
8. If you already have equity in your home, consider using a Home Equity Line of Credit to invest a portion in the market.