Reach your highest potential- Don’t touch what you invest!
You have $500 in your investment account that is looking pretty good to you right now. Maybe all your friends are going on a vacation and you need a couple hundred dollars to join in. You could put in a few more hours at work, but it just seems so much easier to take out $200 from your investment account, right? Wrong!
Well, yes, it is easier, but that doesn’t mean you should do it. When has taking the easier route ever worked out to be best in the end? I don’t think it ever has, and this time is no exception.
Right now, you aren’t thinking about retirement. If your age starts with the number 1, that is the last thing on your mind.
Still, it will affect your future in several ways:
Time will tell.
In time, the $200 you remove right now could grow into a substantial amount. Let’s say you are 15 years old. In 20 years, by the time your 35, if you put that money into a money market fund making 4% interest, you will have over $6,150. If you leave it in until you retire at age 65, you will have almost $32,000. And that’s without adding anything.
This is even just a measly 4%. If you put it into stocks with an average 10%, in 20 years you will have almost $13,000 and in 50 years you will have over $250,000. This is all from just $200.
You can go on and on figuring this out, the point is, small things you do now could have a huge effect on the future.
Immediate savings
You may be saving up for college and taking out this money now will tack on more money to future college loans. You might not even be purposefully be saving up for college, but an extra $200 or more (consider interest) will be what can save you when you have no money for books.
Learn now
Consider what sort of impact this will have on your future decisions. If you don’t think it’s a big deal now, you might not think it’s a big deal 25 years from now to borrow from your 401K, the money you have set aside for retirement.
Teach and discipline yourself now and you could save yourself a lot of money in the future.
In order to resist the temptation to borrow:
Pretend it’s not your money.
Every time you put money aside for an investment, tell yourself it’s gone. When you pay for a movie ticket, will you ever get that money back? No. When you buy a stock, pretend that money is gone forever and you can’t touch it.
Forget about it.
Of course, you’re going to want to keep track of your investments and see how much money you earn. That’s only the smart thing to do. Just try to forget that money was ever yours. Act as though you are managing the money of someone else. They would not like you spending their money!
Will Power
If all else fails, just use good old’ fashioned will power. The more you resist the temptation, the easier it will get.
The only time that it will be okay to take out money is if it’s a complete emergency and the only way to keep from removing it is by borrowing. Also, it has to be absolutely necessary. A new $100 jacket is not an emergency, but if you’re down to your last dollar and you have to pay a speeding ticket, borrow what you may and slow down.
Remember, you invest to make money. If you keep spending it, you’ll be broke forever.
