263: Let’s Talk About Prudent Investing (7 Steps to Wealth, Step 6: Invest)

Not only is today’s episode centered on one of the juiciest of the 7 Steps to Wealth… it’s also one of my favorites because the topic is downright FUN.

Welcome to Step 6: Invest.

This is where the money game gets exciting, and it really starts to feel like the rules are working in your favor. 

Each of the previous steps has been pretty responsibility heavy, requiring mental, emotional, and physical labor from you. Step 6 is really about–in an educated way–releasing the reins a little bit and letting your money do the work FOR you. 

Fun fact: Investing is the only way to earn true passive income, but so many people don’t take advantage of the wealth building vehicle that is the stock market because they don’t understand the rules of the playground–and I want to see that change. 👇

In this episode, we’re going to demystify the world of investing and talk about: 

• The difference between linear and compound returns, 
• Why investing is the solution to the longevity problem, 
• How to determine your investing lifetime,
• How to tap into the financial growth that’s available in the stock market.
• What it means to be a prudent investor, and 
• The keys to building a secure portfolio that will help you achieve your financial goals.

Investing allows you to take advantage of the magic of compound returns so you can earn interest instead of paying it, which is the only way to outpace inflation and ensure your money outlives you.

And the simple truth is this: If you want to build meaningful wealth and achieve financial freedom, you must invest. There is no way around it!

So what are you waiting for, Money Lover? It’s time to turn your money into MORE: Let’s invest!

Here’s what you’ll learn in this week’s episode of Love, your Money:

• 3:51 A note on releasing the reins: How this step of the 7 Steps framework is different than the others
• 6:55 The difference between linear and compound returns, and investing in a way that helps you achieve financial freedom
• 10:28The longevity problem: Living longer is great… but it’s also a financial problem
• 13:30 The only true “passive income” – and determining your investing lifetime
• 14:56 Geopolitical events that the stock market has survived, and how much your money would have grown if you were invested through those times
• 18:30 How the gender wage gap and caregiving responsibilities influence retirement savings, and why it’s especially important for women to invest
• 19:50 What I mean when I talk about prudent investing, and why “beating the market” isn’t a strategy that I recommend–or the data supports
• 23:03 The three components of a prudent investing strategy 
• 30:51 The types of financial advisors you can work with, how they’re paid, and why the distinctions matter for your wealth building
• 37:11 The real, data-based performance of mutual fund managers whose investment strategy is based on picking stocks and timing trades
• 42:10 Action steps you can take TODAY to start–or take the next step–on your investing journey

Show Notes
To get access to the full show notes, including all the resources mentioned, visit: https://hendershottwealth.com/podcast/prudent-investing

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Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.