Graduate From College Recently? Build A $100,000.00 Portfolio In Three Years.
Sunny Shah said, "When I got my first full-time job, it was time for me to take ownership and drive that for myself," he says.
He credits his success to two strategies he learned from Ramit Sethi's personal finance book, "I Will Teach You To Be Rich,". The first is to budget in savings before household spending, bills, and discretionary money (he automated deposits into his savings account on paydays).
"I got my bi-weekly paycheck, which was the same amount every two weeks. That made it very simple to sit back and know exactly what was coming in every month," Shah says.
The goal of this strategy is to put money out of sight and out of mind, and for Shah, it worked. The second part of the strategy involves automating investments, too (Shah would automatically deposit money tax free to his 401(k) and other retirement and brokerage accounts). Early investor just out of college should be conservative and invest in ETF and other funds that mirror the market indices (DJIA, S&P, Russell). By investing over time the dollar-cost averaging strategy will come into play and keep your portfolio growing by investing the same amount of money over time consistently (offset market volatility).
"This strategy took the guesswork out of the equation. I wasn't sitting there trying to time the market," Shah said. "The strategy forced me to do the same thing over and over again."