17.Starting to Invest with Michael Lacy from the Winning to Wealth Podcast
Michael Lacy is the host of the Winning to Wealth Podcast. After paying off $61,000 in debt in only 16 months, Michael and his wife created Winning to Wealth to help couples like themselves save more money, pay off their debt, and get started investing. On this episode of CFO at Home, Michael and Vince discuss his investing regrets, seven steps to follow before starting to invest, what to do when the stock market falls, and more.
Michael Lacy is the host of the Winning to Wealth Podcast. After paying off $61,000 in debt in only 16 months, Michael and his wife created Winning to Wealth to help couples like themselves save more money, pay off their debt, and get started investing. On this episode of CFO at Home, Michael and Vince discuss his investing regrets, seven steps to follow before starting to invest, what to do when the stock market falls, and more.
- Key Takeaways:
- Before You Start Investing Follow These 7 Steps
- Define you goals and priorities
- Clarity of vision creates clarity of priority
- Get caught up on bills
- Helps to minimize the chances that you’ll need to cash out investments at the wrong time
- Pay off consumer debt
- Guaranteed return on your money
- Frees up cash flow so you can invest more
- Get adequate insurance
- Save an Emergency Fund
- Also keeps you from cashing out investments at the wrong time
- Learn the Basics of Investing
- You don’t have to be a expert to start investing, but learn enough to have a basic understanding of what you’re investing in
- Implement your Strategy
- Define you goals and priorities
- Before You Start Investing Follow These 7 Steps
- Michael’s chip analogy for Index Funds
- Brokerage Firm is like a grocery store
- Individual types of chips/snacks (potato chips, cheese puffs, etc) are individual stocks
- Chip variety packs are mutual funds
- What I Do When The Stock Market Falls
- Understand that the instinct to buy into the market when prices are increasing and sell when they are falling, flies in the face of the belief of many long-time successful investment philosophy
- Important not to let emotion overrule your logic
- Be fearful when other people are greedy, be greedy when other people are fearful
- Shut out news, delete Apps if you have to
- Focus on what you can control
- Remember that although your account balance is decreasing, you’re no actually losing money; you own the exact same number
- Sit down and look at overall situation
- Cash Reserves, Asset Allocation
- Evaluate risk based on risk tolerance, investment time horizon
- Perils of market timing
- Use downturns as opportunities to gut check your Asset Allocation, and cash reserve level
- Sit down and look at overall situation
- Understand that the instinct to buy into the market when prices are increasing and sell when they are falling, flies in the face of the belief of many long-time successful investment philosophy
- Resources: