Summer holidays are on their way, and investing is probably the last thing you’re thinking about. After all, you’ve got presents to buy, plane tickets to buy, roast meats to… buy. There’s a bit of a theme here, because it’s an expensive time of year.
So you might have a hard time finding room for your Sharesies investments amongst all the other expenses. That’s why we’re here with a quick pep talk to encourage you to stay on course.
Taking a break?
Let’s say you’re investing $100 a month in your Sharesies account. But when December rolls around, things start to get tight, so you take a break. Not a big deal, right? After all, you’re still investing during the other 11 months of the year.
Thanks to compounding returns, though, that $100 ends up being worth a bit more than $100 over time. Actually, a lot more.
If you saved $1,200 a year ($100 a month), and earned an average 5% return for 30 years. You’d end up with just under $45,000, and a total return of $17,000. Pretty good! Not a bad deal for $100 a month.
But, let’s take a look at what happens if you flag investing just for the month of December…
Your $45,000 would drop to $40,000. That’s not nothing! If you found $5,000 in your bank account today, you’d probably be pretty thrilled. But by stopping your investing to focus on Christmas shopping, you’re costing your future self 5 grand. Sorry, future you.
A few tips!
But we’re not here just to wag our fingers at you for not saving properly. Here are some ways you can keep contributing to Sharesies during the pricey holiday season:
1. Go automatic
Set up an automatic payment to put your money into Sharesies on your payday. This will help you to stick to your payments, because after awhile you won’t even notice them. It will be just like your KiwiSaver, which go out of your pay before your pay gets to your bank account.
2. Put it on your gift list
Did your dear old auntie give you cash as a present? Stick it in your Sharesies account! You might even end up coming out ahead. We’ll also be launching Sharesies Gifts in time for Christmas. This could be a great way to give your Portfolio a boost.
3. Lower your amount
If you really need more cash, you can lower your amount for the month. But don’t get rid of it entirely! After all, you don’t want to break your great investing habits. Just reduce by a little bit, in order to free up funds for family outings and whatnot, while not selling your future self too short.
If you dropped your usual $100 a month to $50 over December your total amount here is $42,000ish. Not a bad compromise. You get $42,000 to spend in the future, and you get an extra $50 to get you through the pricey holidays this year.
It’s not $45,000, but we get it—you’ve got to live a little bit, and sometimes you’ve got to pay a little bit to do so.
And who knows? Maybe you’ll make up for the shortfall later in the year. After all, you’ve got Sharesies, so it’s pretty (very) easy to do.
4. Don’t touch it
You’ve been putting your hard earned money into Sharesies and building up your Portfolio. Even if you can’t keep adding to Sharesies over December, think hard before withdrawing the money you’ve already got invested.
Keep up the good work! And have a safe and happy holiday! 🎉