As strange as it might sound, the thought of investing in some nice sensible bonds or a cozy little term deposit is pretty attractive these days. There used to be a time when I wouldn’t consider any investment avenue other than property, but I had good reason for it, it had worked extremely well for me in the past.
I was exceptionally fortunate with my first property purchase and saw rapid growth, naturally I wanted to replicate that and continued along the same path expecting the same result. After a couple more purchases things really started to slow down, so much so they actually went backwards.
Fast forward a few more years and I’ve come around to other forms of investing and can fully appreciate the benefits of diversification. These days, I even pay attention to the way my superannuation is invested, which was something I never used to be interested in.
I think I’m geting old
As much as I’ve tried to hurry things along over time, I’ve realised more and more that wealth creation is a distance event – a marathon rather than a sprint. I still don’t like the pace, but often the progress is incremental, which means that fine tuning the investments you have can make a big difference over time.
Sure big things like reviewing your home loan interest rate will make a difference, everyone does that (or at least I hope you do). But I’ve found that doing the little things often makes the biggest differences, even when it doesn’t feel like it at the time.
Things like choosing the right investment option for your pension, or tying up loose money in term deposits or fixed rate bonds are a good way to earn interest and continue to accumulate financial wealth. It sounds completely boring, which is why a lot of people just don’t do it, but making the effort to take even the smallest actions is a truly heroic thing to do.
Boring can be fun
It might sound like hype, but don’t discount the benefit of being able to find motivation in the mundane. Leaving things undone is easy, getting them done when they look and feel so inconsequential is actually a huge achievement that will pay off significantly over time.
Adopting the right mid set can make a huge difference. I’ve often found that researching something I wanted to buy, so thoroughly that I exhaust every avenue, ended up being better than any thrill of buying to fulfil my need for instant gratification. Taking the same approach with investing has led to similar results.
Going big on an investment might give you a buzz, but it generally isn’t sustainable. Finding ways to tweak the areas you do have control of can produce the same feeling if you approach it the right way. Testing an offset account against a term deposit from reliable banks can be just as engrossing. Alternatively, you might like to try strategically splitting your savings between different investment options and tracking them closely to see which is working best over a period of time before lumping it all together again.
There is no need to micro-manage your investments forever, but understanding how investments work and what your money is doing for you is incredibly useful (and a lot of fun). Ultimately the result is more than just interest earned, it is knowledge gained.
How well do you know your investment options?