Market Minimalist – 5 Ways to Be a Minimalist Investor (and Why You Should Want to) | If you’ve been wanting to start an investment portfolio for a while, but every time you start researching, you get overwhelmed and give up, we’re here to help. Though investment can be a complex endeavor, it doesn’t have to be beyond your reach. Just as you can take a minimalist approach to your wardrobe and home design, so too can you adopt a clean and simple investment strategy. The following five tips will show you how:
1. Engage the right professional help
If you want to step into the world of investment without the time-consuming complexities, getting professional assistance is the best way to do this. Regardless of what path you take, you’ll need to engage a good tax agent if you want to avoid confusion at tax time.
Where you go from here depends on what kind of investment portfolio you’re looking to develop. If you want to get into the stock market, it’s important to avoid the scam artists online who claim to have a winning strategy if only you spend $1,000 on their course. Instead, go for a licensed broker or financial advisor.
If you’re looking at residential or commercial real estate, a property investment advisor will be an invaluable resource. Do your due diligence up-front, and you can kick back and enjoy a minimalist investment experience as they guide you through all the otherwise complex decisions.
2. Consider long-term passive investment
If you’re wanting to bring the minimalist mindset into your investing, then high-risk, high-volume options like day-trading aren’t for you. Instead, consider an index fund, like Vanguard or Fidelity, that can provide you with a balanced portfolio all in one place. Having multiple accounts with different brokers will only complicate things. Not only does this contradict the minimalist ethos, but it’s also not the best way to succeed long-term.
3. Limit how many times you check your investment account
If you download an investing app on your phone, you’re at risk of slipping into the habit of constantly checking your account. These innocent checks when you have a spare minute can rapidly spiral into a time-sucking obsession. Not only is this rough on your mental health, but it’s also bad news for minimalist investors.
Taking a minimalist approach means having a long-term outlook. Having a long-term outlook means daily fluctuations aren’t your concern. Even weekly and monthly fluctuations shouldn’t bother you too much because some ups and downs are inevitable. What you’re looking for is a general upward trend observed over many years.
4. Contribute to your retirement fund
This is one of the easiest ways to be a minimalist investor and it comes with more than one benefit. Your 401(k) is a set and forget investment that’s managed by the fund. When you make voluntary contributions, they’re taken from your paycheck before taxes are deducted. This reduces your gross income, meaning you’ll pay less in tax while that money is earning interest for you in your 401(k).
Rather than having to log into your bank account each month to decide how much you want to invest, set up an automatic deposit on a schedule that suits you. This cuts out the decision-making and forces you to get your finances under control to ensure that you always have the funds you need for your investment account. It’s a good idea to create a budget, if you haven’t already, and ensure you have an accessible emergency fund to cover any unexpected expenses that may crop up.
Follow the tips above, and transform the complexities of investing into a straightforward minimalist strategy.