The number one question when it comes to personal finance as well as investing your money is, how can I get more bang for my buck?
In other words, how can I increase my return on investment?
Today I wanted to take a closer look at a few ways in which you may well be able to increase the return you are getting for the money you are investing.
1. Keep Your Fees In Check.
You might think it is strange that I put something like this at number one on the list, but keeping fees in check is extremely important to your long-term success.
Things such as inactivity fees, high trading fees, or sales loads on mutual funds can absolutely eat up your money.
2. Invest in Dividend Payers.
I am a huge believer in the power of dividends. Do you realize that dividends provide half of your overall gains in investment over the long run?
Some blue-chip stocks are now paying dividend yields of 3%-5%, which is far more than you can come close to getting in a money market account in today’s environment.
3. Diversify Your Investments.
While some like to get cute and find a certain sector or industry that is hot and dump all their money there; this is a very risky business that you don’t want to get into.
Get into many different sectors, and even try investing in things such as gold or oil as a portion of your portfolio.
4. Reduce Turnover.
It can be difficult to remember when you want to pull the trigger constantly, but it costs money to trade stocks or mutual funds.
Simply buying and selling after a few days each time is going to really eat away at your account balance and force you to make moves that really aren’t prudent for the individual investor.
5. Do Your Homework.
This one may seem silly, but investing is not easy. This is not a game.
When it comes to investing your money, treat it just like you do your day job. Keep up with the stocks in your portfolio and know what is going on.
Knowledge is power when it comes to investing and personal finance.
These five steps should help get you on your way to earning a better return on your investment.
Hold yourself accountable for the decisions you make when it comes to personal finance and investing! Your financial future depends on your plan, so make sure it is a solid one.