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  • Timothy Iseler

Foundational Money Habits 4: Long-Term Investing

This post is the last of a series on four foundational habits that anyone can use to improve financial health. You can read the previous one here.


There are a million ways to do anything, but my advice is always to start with small, manageable, and repeatable actions to build good habits. Having a good relationship with money has little to do with a high income and how much nice stuff you own and everything to do with living within your means and saving what you can.


Making big, sweeping changes all at once can set you up for disappointment when you inevitably hit a bump in the road. Instead, start small with actions you know you can manage and let those small victories build into something you can be proud of. Here are four easy to understand foundational habits that anyone can start using today:

  • Spend a little bit less than you want to.

  • Save a little bit more than you have been.

  • Pay off debt a little bit faster than you need to.

  • Invest what you can when you can for the rest of your life.

I consider those four topics – cash flow, saving, debt management, and long-term investing – to be foundational to good financial health. I start each client relationship with a review of those fundamentals to establish a baseline (where are you right now?) and identify easy to understand practices that can help build the habits that will take you where you're going. There are certainly other important topics in personal finance, but getting those four right will set you up for a lifetime of positive financial health.


So let's dive into the last topic and identify a few easy to understand ways to build good habits!


Invest what you can when you can for the rest of your life.


While managing spending, saving, and debt are all about what is happening right now, investing is focused on what could happen in the future.


In a nutshell, investing means committing today's money to buy something that is likely to appreciate or generate income (or both) in the future. That could mean buying stocks or bonds; mutual funds or Exchange Traded Funds (ETFs) that hold stocks or bonds; real estate; precious metals; or even some collectibles and art.


The bad news is that the future is always uncertain so there is no guarantee that your investment will turn out the way you want. The good news is that you only need a few simple, easy to understand best practices to be a successful investor.


Here are four ways you can keep it easy while investing for your future:


  • Think long-term – how likely is it that the stock market will close higher today than yesterday? Or the day after that? The truth is that in the short-term – this week, next quarter, even next year – absolutely no one knows what will happen to the prices of the stock market, real estate, or those gold bars you've been using as bookends. (Anyone who tells you otherwise is full of baloney.) But if you can focus instead on the next 5, 15, or 50 years, things get a lot easier! The stock market averages a positive annual return about 73% of the time, or roughly three out of every four years. That's decent, but still fairly risky. If you look at any rolling 5-year period of the last century-ish, returns were positive about 86% of the time. That's a bit better! And if you zoom out to rolling 20-year periods, there is not one single instance of a negative return.* In other words, the historical data suggests that you can become a better investor simply by remaining invested for a long time.^

  • Only invest money that you will not need in the next 3 years – as mentioned above, the stock market is up on average about 3 out of every 4 years. That means it also tends to be down about 1 out of every 4 years. What if you've invested the money you planned to use for a house downpayment and this happens to be one of those bad years? Yipes! Investing is simply too risky for any money that you might need in less than 3 years.º Always make sure you are confident that you will not need that money in the next few years before committing it to investments.

  • Select investments you could imagine owning forever – guess how many of the top ten companies in the S&P 500 from March 2003 are still in the top ten today? I'll give you a hint: it's zero. Even the most successful companies will lose prominence (and investors' money) over time. But some investments don't come with any inherent expiration date. Index funds allow you to invest in hundreds or even thousands of different companies in a convenient package, and the holdings change over time to keep up with the relevant index without any effort on your part. Similarly, you can buy funds that track international stock markets, U.S. Treasuries, domestic & global bond markets, and real estate markets in the form of Real Estate Investment Trusts (REITs). Rather than worrying about today's trends, aim to buy investments that you could potentially own for decades or for the rest of your life.

  • The best time to invest money is when you have it – as the old adage goes, "the best time to plant a tree was 20 years ago; the second best time is now." Lots of people wait on the sidelines until it feels like a safe time to invest ... and end up missing out on years or even decades of lost opportunity. Rather than trying to pick the right time to get in or out of the markets, aim to invest what you can when you can through good times and bad. Adding a consistent amount each month or with each paycheck takes the guess work out of when or how much so that your money can start working for you as soon as possible.

That wraps up our tour through four foundational pillars of financial health, featuring tips on spending, saving, debt management, and investing. There are lots of other important topics, but getting those four right will put you on the path for a lifetime of better financial health – and hopefully with a lot less stress!



Timothy Iseler, CFP®

Founder & Lead Advisor

Iseler Financial, LLC | Durham NC | (919) 666-7604


* That doesn't mean that it couldn't happen, just that it has never happened (and I believe that trend will continue).


^ Warren Buffett is considered one of the most successful investors alive. There are literally dozens (hundreds?) of books written about his approach to investing, presumably so that readers can attempt to replicate his success. What gets overlooked most of the time, though, is that 95% of Buffett's wealth was created after age 60s and 99% after he reached age 50. The staggering majority of his wealth is the result of simply staying invested for a really long time.


º Historical data suggests that investing in bonds is less risky than stocks in the short-term, but still not as safe as cash. Real estate also tends to be more stable than stock


Iseler Financial helps creative professionals remove stress while taking control of their financial futures. As both advisor and accountability partner, we help identify current strengths and weaknesses, clarify and refine your long-term goals, and prioritize understandable, manageable, and repeatable actions to bring long-term financial well-being. Reach out today to take the first step.


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